UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
(Check One): |X| Form 10-K |_| Form 20-F |_| Form 11-K |_| Form 10-Q
|_| Form N-SAR
[ ] For Period Ended: December 31, 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 (on back page) 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
<PAGE>
[ ] (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
Dwight D. Dunton I (212) 925-8745
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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
(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date 4/1/98 By /s/ Joe Caiazzo
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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Rider I
The Company is in the process of completing its 10-KSB for the fiscal
year ended December 31, 1997. The accumulation of information has taken
longer that normal and the Company needs more time to gather the necessary
information and review its results with its Board of Directors and Audit
Committee.
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Rider II
Registrant currently expects its results of operations to have
decreased to a net loss of approximately $76,010 for the fiscal year ended
December 31, 1997, from operating income of $829,153 for the fiscal year ended
December 31, 1996. This decrease resulted from both decreased operating income
and certain unusual events described below.
Operating income is estimated to have decreased to a loss of
approximately $837,845 for the fiscal year ended December 31, 1997 from a gain
of $1,435,709 for the fiscal year ended December 31, 1996. This decrease
reflected decreases in purchase discount earned, resulting from increases in
notes sold and an increase in notes which were foreclosed upon and became OREO,
and increased interest expense, personnel expense, OREO expense and litigation
expense, all of which were only partially offset by increases on gain on sale of
notes receivable, increases in gain on sale and rental income of OREO, decreased
service fees on senior debt and decreased provision for loan losses.
Additionally results were depressed by start-up expenses associated with the
Company's mortgage origination subsidiary.
The unusual 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 to
an income tax benefit reflecting the Company's overestimation of its taxable
earnings, resulting in an overpayment of income tax during a prior period
resulting in this tax benefit.
