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The information included in these “Frequently Asked Questions (FAQs)” is prepared for the convenience of our stockholders and may contain information considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon the Company’s present intent, beliefs and expectations. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “feel,” “expect,” “intend,” “likely,” “may,” “plan,” “potential,” “should,” “see,” “hope,” “view,” and “would” or the negative of these terms or other comparable terminology. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, the Company’s actual results may differ materially from those contained in these forward-looking statements. You are cautioned not to rely on these forward-looking statements. The information contained in the Company’s filings with the Securities and Exchange Commission (“SEC”), including under “Risk Factors” in the Company’s periodic reports and other filings, identifies important factors that could cause the Company’s actual results to differ materially from those stated in the Company’s forward-looking statements. IMHFC’s filings with the SEC are available on the SEC’s website at www.sec.gov and are also accessible on the Company’s website at the following link: http://www.imhfc.com/SECFilings.htm.
A: The following link directs you to the most recent publicly filed correspondence: http://www.imhfc.com/SECFilings.htm. In addition, the Company may also periodically distribute direct correspondence to inform shareholders of recent developments that may not be filed with the SEC.
A: As discussed in the Company’s SEC filings, no public trading market currently exists for the Company’s common stock, so shareholders are not free to sell their shares.
A: Pursuant to the terms of the Company’s Amended and Restated Certificate of Designation of Series B-1 Cumulative Convertible Preferred Stock and Series B-2 Cumulative Convertible Preferred Stock (“Certificate of Designation”) filed with the Secretary of State for the State of Delaware for our Series B Preferred Stock issued in July 2014, the Company may not declare, pay or set aside any dividends on any shares of any class or series of our capital stock unless and until all accrued dividends on the Series B Preferred Stock have been paid in full. Once the Company has met its obligation to pay dividends on the Series B Preferred Stock, any dividends to holders of our common shares are made at the discretion of our board of directors and depend on our earnings, our financial condition and other such factors as our board of directors may deem relevant from time to time, subject to the availability of legally available funds. The Company has not generated earnings in recent periods and has lacked the adequate liquidity to make distributions to common shareholders. Much of the Company’s liquidity during 2015 and 2016 was invested in development of certain assets to drive the market value of such assets upon sale. While it is our desire and intent to re-commence consistent common shareholder dividends, there is no assurance that we will have the liquidity or board approval to do so. Any future approved dividends would be publicly disclosed in our SEC filings.
A: In June 2010, a majority of the membership interests of the IMH Secured Loan Fund, LLC (the “Fund”) were voted in favor of a series of transactions converting the Fund from a Delaware limited liability company into a Delaware corporation named IMH Financial Corporation (the “Conversion Transactions”). This is the entity of which you are now a shareholder. As part of that transaction, each membership unit in the Fund was exchanged into 220.3419 shares of Class B or Class C common stock of the Company.
A: Since there is no trading market, we are unable to provide a current market value of the Company’s shares. On a periodic basis, the Company’s board of directors determines the fair market value of the Company’s common shares in connection with the issuance of equity awards under the Company’s employee equity incentive plan and non-employee director compensation plan. These determinations are based on reports provided to the board of directors from an outside valuation consultant. Such fair market determinations are disclosed in the Company’s SEC filings. You also can find the book value of your shares in our SEC filings. The book value per share amount is derived by dividing the Company’s stockholders’ equity by the number of common shares outstanding. This book value per share amount is not intended to, and should not be construed to, represent the market value of a shareholder’s interest in the Company. The Company encourages shareholders to review our periodic SEC reports and other information which is posted on our company website at http://www.imhfc.com/SECFilings.htm or directly on the SEC site at www.sec.gov and reference CIK #1397403.
A: As set forth in the SEC filings we made in connection with the Conversion Transactions, our intent was to position the Company for an initial public offering (“IPO”). With that in mind, in order to promote the orderly marketing of our shares in any IPO and develop a sustainable trading market for the stock, the Company created several different classes of common stock, certain of which had predetermined holding periods before those shares would convert to freely tradable, unrestricted common stock. Under the Company’s Certificate of Incorporation, these shares will convert to common stock at the option of the holder thereof (or if applicable, automatically) based upon the passage of time after the “Trigger Date” (which is defined in our Certificate of Incorporation to mean the earlier to occur of (i) the Company’s IPO or (ii) the date that is ninety (90) days following the date, if any, on which the Company sends notice to its stockholders that the Board of Directors has determined not to pursue an IPO). The applicable holding period for each class of our stock is as follows:
Shares of Class B common stock will also automatically convert into shares of unrestricted common stock immediately prior to the consummation of any “change in control” transaction, which generally includes (i) a merger in which our holders of record do not immediately after the merger hold a majority of the voting power of the surviving corporation, (ii) any transaction in which 50% or more of our voting power is transferred, or (iii) a sale of all or substantially all of our assets, except to one or more of our affiliates.
A: Shortly after the Conversion Transactions, the Company filed a preliminary registration statement with the SEC in order to pursue an IPO. While this registration statement was subsequently withdrawn, the Company’s management and Board of Directors continue to explore the feasibility and advisability of conducting an IPO. Written communications will be provided to shareholders on the progress of the IPO process should it commence.
A: The Company’s Certificate of Incorporation contains provisions restricting the transfer of the Company’s Class B and Class C common stock with the following exceptions:
There are additional transfer restrictions set forth in our Third Amended and Restated Bylaws. The primary purpose of these restrictions is to avoid an “ownership change,” as defined by the Internal Revenue Code of 1986, as amended, and regulations adopted by the Internal Revenue Service, in order to preserve the potential benefits of the Company’s net operating loss for federal and state income tax purposes (the “NOL”). To request a transfer, a shareholder must complete and submit the Request to Transfer Stock form available on our transfer agent’s website:
https://www-us.computershare.com/Investor/Company#SCUSIMH. Any request for transfers that do not fall within the exceptions listed above must be submitted to the Company and the ultimate approval is within the full and complete discretion of the Board. To request such type of transfer, you may obtain a Board Approval Request to Transfer Stock form on the Company’s website at: www.IMHFC.com. In an effort to diligently protect the NOL, the Company’s board of directors adopted a resolution prohibiting all transfers of stock until June 9, 2017. The board of directors will re-examine that transfer restriction on or around June 9, 2017, and they may elect to extend, modify or remove it as they may determine is in the best interest of the Company and its shareholders at that time.
A: Yes. Our transfer agent, Computershare, provides shareholders with on-line access to share ownership information. A shareholder can apply for a login by accessing the Computershare website at http://www.computershare.com. On the home page, select INDIVIDUAL, LOG IN TO INVESTOR CENTER. From the Investor Center page, select LOGIN and enter your user id and password or if this is your first visit, select CREATE LOGIN and complete the short registration form.
A: As a public reporting entity, the Company files periodic reports with the SEC. For additional financial and other important information pertaining to the Company, individuals can visit www.sec.gov and reference CIK #1397403.