UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
(Check One): [ ] Form 10-K [ ] Form 20-F [ ] Form 11-K [x] Form 10-Q
[ ] Form N-SAR
[ ] For Period Ended: September 30, 1997
[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended:___________________________
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Read Instruction Before Preparing Form. Please Print or Type.
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
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If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
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PART I - REGISTRANT INFORMATION
Franklin Credit Management Corporation
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Full Name of Registrant
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Former Name if Applicable
Six Harrison Street
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Address of Principal Executive Office (Street and Number)
New York, NY 10013
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City, State and Zip Code
PART II -- RULES 12b-25(b) AND (c)
If the subject report could not be filed without reasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b- 25(b), the following
should be completed. (Check box if appropriate)
[x] (a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or
expense;
[x] (b) The subject annual report, semi-annual report, transition report
on Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion thereof,
will be filed on or before the fifteenth calendar day following
the prescribed due date; or the subject quarterly report of
transition report on Form 10-Q, or portion thereof will be filed
on or before the fifth calendar day following the prescribed due
date; and
[ ] (c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 11-K, 10-Q, N-SAR,
or the transition report or portion thereof, could not be filed within the
prescribed time period.
See Rider I
(ATTACH EXTRA SHEETS IF NEEDED)
SEC 1344 (6/93
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PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
J. Michael Mayerfeld (212) 715-9346
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(Name) (Area Code) (Telephone Number)
(2) Have all other period reports required under Section 13
or 15(d) of the Securities Exchange Act of 1934 or
Section 30 of the Investment Company Act of 1940 during
the preceding 12 months (or for such shorter) period
that the registrant was required to file such reports)
been filed? If answer is no, identify report(s).
[x] Yes [ ] No
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(3) Is it anticipated that any significant change in
results of operations from the corresponding period for
the last fiscal year will be reflected by the earnings
statements to be included in the subject report or
portion thereof?
[x] Yes [ ] No
If so, attach an explanation of the anticipated change,
both narratively and quantitatively, and, if
appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
See Rider II
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Franklin Credit Management Corporation
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(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date 11/17/97 By /s/ Joe Caiazzo
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Joseph Caiazzo, Chief Operating Officer
INSTRUCTION: The form may be signed by an executive officer of the registrant or
by any other duly authorized representative. The name and title of the person
signing the form shall be typed or printed beneath the signature. If the
statement is signed on behalf of the registrant by an authorized representative
(other than an executive officer), evidence of the representative's authority to
sign on behalf of the registrant shall be filed with the form.
ATTENTION
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INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL
VIOLATIONS (SEE 18 U.S.C. 1001).
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<PAGE>
Rider I
Due to the occurrence of certain unusual events during the quarter
ended September 30, 1997 and Registrant's reconsideration of the
characterization of certain of its litigation receivables, the Company did not
complete its consultations with its independent auditors prior to the deadline
for its Form 10-QSB for the fiscal quarter ended September 30, 1997. Registrant
believes that its Form 10-QSB will be filed, within the grace period provided
for under Rule 12b-25.
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Rider II
Registrant expects its results of operations to have increased to net
income of approximately $84,000 for the fiscal quarter ended September 30, 1997,
from an operating loss of $48,141 for the fiscal quarter ended September 30,
1996. This increase resulted from both changes to operating income and certain
unusual events.
Operating income is estimated to have increased to approximately
$525,000 for the fiscal quarter ended September 30, 1997 from a loss of $62,277
for the fiscal quarter ended September 30, 1996. This increase reflected
increases in purchase discount earned, resulting from increased purchases of
notes receivable, increased gain on sale of restructured notes receivable, gain
on sale of OREO, decreased service fees on senior debt and decreased provision
for loan losses, which were only partially offset by increased interest expense,
personnel expense, OREO expense and litigation expense.
The unusual events depressed the increase in operating income. These
events included a $1.5 million charge to income incurred to create a reserve for
a portfolio of loans purchased by the Registrant that it now believes will be
largely uncollectible. Registrant believes that it was defrauded in such
purchase and has filed suit seeking recision or damages. Registrant's litigation
counsel has advised Registrant that it believes that Registrant has a
substantial probability of prevailing in such suit. This charge was partially
offset by increased litigation proceeds reflecting the recharacterization of
certain litigation receivables of Registrant as a result of their collection
history to date and decreased provision for income taxes reflecting the
Company's overestimation of its tax liabilities during the first six months of
1997, a result of its overly-conservative assumption that its available loss
carry forwards would be exhausted in its 1996 tax return, which was filed on
September 15, 1997.
