Distribution of Future Healthcare of America

FAB Universal Divestiture

On or about October 1, 2012, shareholders received one share in Future Healthcare of America for each share of FAB Universal Corp owned.

Record Date: September 5, 2012
Effective Date: October 1, 2012

Allocation Ratios:
FAB Universal Corp 63.50%
Future Healthcare of America 36.50%

The shareholder should treat the distribution of stock received for Future Healthcare of America as outline below.

The first step is to figure out how much of what you paid for FAB Universal Corp (FAB) is attributed to FAB and how much to Future Healthcare of America (FHA). One method is to take the closing share prices of each stock and come up with an allocation.

FHA closed at $3.00 on October 1st; the first trading day that FHA was split off.  That day, FAB closed at $5.22. The value of the two stocks together was $8.22. That means that FHA shares account for 36.5% of your cost basis, since $3.00 divided by $8.22 is 36.50%. Similarly, FAB accounts for 63.5% of the cost basis, or $5.22 divided by $8.22.

Next, you need to know your original cost basis in FAB. You should have the cost basis, since it would have been your basis even if the spinoff never happened. Let’s say you bought 100 shares of FAB for $3.50 a share before the spinoff. To figure your cost basis in FAB after the spinoff, multiply $3.50 by the allocation factor of 63.5%, or $2.22 a share. To figure your cost basis in FHA, multiply your original FAB cost basis of $3.50 by the allocation factor of 36.5%, or $1.28.