News Column

HANCOCK FABRICS INC FILES (8-K) Disclosing Other Events, Financial Statements and Exhibits

August 4, 2014



Item 8.01 Other Events.

On August 4, 2014, Hancock Fabrics, Inc. (the "Company") issued a press release announcing that the Board of Directors of the Company (the "Board of Directors") has determined not to seek stockholder approval for the reverse stock split transaction (the "Transaction") contemplated by the Company's Schedule 14A filed with the Securities Exchange Commission on July 8, 2014. While the Board of Directors believes that the Transaction was in the best interest of the Company and its stockholders at the time of its proposal, upon review and careful consideration, further discussions with management and its advisors and other relevant factors, the Board of Directors has determined that the costs of cashing out stockholders with less than 1,000 shares has increased such that the costs of the Transaction now outweigh the benefits to the Company and its stockholders. This cost increase can primarily be attributed to the significant number of holders that have acquired shares through multiple accounts with less than 1,000 shares or have split their holdings, in an attempt to receive multiple fractional share payments The Company had previously mentioned this issue in an 8K filed on July 15, 2014, noting the Company's reservation of right to abandon the transaction if the costs were to outweigh the benefits. In addition, many holders acquired accounts with less than 1,000 shares in an attempt to receive a single fractional share payout. Therefore, the Board of Directors has decided that it is in the best interest of the Company and its stockholders to withdraw Proposal 1 from stockholder consideration for the upcoming Annual Meeting of the Company's stockholders.

The Board of Directors reserves the right to revisit the possibility of a reverse stock split or alternative transaction at any point in the future on such terms as may be decided at that time to be in the best interest of the Company and its stockholders.

Item 9.01 Financial Statements and Exhibits.



Exhibit Number Description

99.1 Press release issued by Hancock Fabrics, Inc. dated August 4, 2014, announcing the filing of the Supplement to the Proxy Statement for the 2014 Annual Meeting of Stockholders, filed with the Securities Exchange Commission on August 4, 2014.



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Source: Edgar Glimpses


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