UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement

Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.)

Filed by the Registrant [X]

Filed by a Party other than the Registrant [  ]

Check the appropriate box:

[X]  

[   ]  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))OptimumBank Holdings, Inc.

[   ]  Definitive Proxy Statement

[   ]  Definitive Additional Materials

[   ]  Soliciting Material Pursuant to § 240.14a-12

OPTIMUMBANK HOLDINGS, INC.

(Name of Registrant as Specified in Its Charter)

(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (Check the appropriate box):

[X]  No fee required.

[   ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1)  Title of each class of securities to which transaction applies:

2)  Aggregate number of securities to which transaction applies:

4)  Proposed maximum aggregate value of transaction:

5)  Total fee paid:

[   ]  Fee paid previously with preliminary materials.

[   ]  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

1)  Amount previously paid:

2)  Form, Schedule or Registration Statement No.:

3)  Filing Party:

4)  Date Filed:

PROXY STATEMENT

20132021 ANNUAL MEETING OF SHAREHOLDERS

April 30, 2013

PROXY VOTING OPTIONS

YOUR VOTE IS IMPORTANT!

Whether or not you expect to attend in person, we urge you to vote your shares by phone, via the Internet, or by signing, dating, and returning the enclosed proxy card at your earliest convenience. This will ensure the presence of a quorum at the meeting. Promptly voting your shares will save us the expense and extra work of additional solicitation. Submitting your proxy now will not prevent you from voting your stock at the meeting if you want to do so, as your vote by proxy is revocable at your option.

Voting by theInternet orTelephone is fast and convenient, and your vote is immediately confirmed and tabulated. Most important, by using the Internet or telephone, you help us reduce postage and proxy tabulation costs.

Or, if you prefer, you can return the enclosed Proxy Card in the envelope provided.

PLEASE DO NOT RETURN THE ENCLOSED PROXY CARD IF YOU ARE VOTING OVER THE INTERNET OR BY TELEPHONE.INTERNET.

April [], 2013__, 2021

Dear Shareholder:

You are cordially invited to attend the 2021 annual meeting of shareholders of OptimumBank Holdings, Inc., which will be held at the executive offices of OptimumBank, 24772929 East Commercial Boulevard, Fort Lauderdale, Florida 33308, on Tuesday, April 30, 2013,May 25, 2021, at 10:00 a.m.

Details of the business to be conducted at the annual meeting are given in the attached Notice of Annual Meeting and Proxy Statement.

Also enclosed is a copy of our Annual Report on Form 10-K for 2012,2020, which contains important information about our company.

Whether or not you attend the annual meeting, it is important that your shares be represented and voted at the meeting. Therefore, I urge you to promptly vote and submit your proxy by phone, via the Internet, or by signing, dating, and returning the enclosed proxy card in the enclosed envelope. If you decide to attend the annual meeting, you will be able to vote in person, even if you have previously submitted your proxy.

If you need directions to the annual meeting, please call our offices at (954) 776-2332, Ext.101.900-2805.

On behalf of the Board of Directors, I would like to express our appreciation for your continued support for our company.

OPTIMUMBANK HOLDINGS, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

April 30, 2013To be held on May 25, 2021

To the Shareholders:

The annual meeting of the shareholders of OptimumBank Holdings, Inc. will be held at the executive offices of OptimumBank, 24772929 East Commercial Boulevard, Fort Lauderdale, Florida 33308, on April 30, 2013,Tuesday, May 25, 2021, at 10:00 a.m. for the following purposes:

1.  To elect four directors.

2.   To approve the issuance and sale of up to a total of 7,333,333 shares of the Company’s common stock at a price of $0.30 per share to Moishe Gubin under the terms of an Amended and Restated Stock Purchase Agreement between the Company and Mr. Gubin.

3.   To approve the Reverse Stock Split pursuant to which every four (4) outstanding shares of the Company’s common stock would be combined into (1) outstanding share of the Company’s common stock on a record date to be established by the Company’s Board of Directors following the annual meeting.

4.   To ratify the selection of Hacker, Johnson & Smith PA as the Company’s independent auditor for fiscal year 2013.

5.  

	1.	To elect seven (7) directors;
	2.	To approve the issuance of up to 700,000 shares of common stock in exchange for Trust Preferred Securities issued by OptimumBank Capital Trust I;
	3.	To approve the participation of certain directors in the exchange offer for the Trust Preferred Securities described in Proposal 2;
	4.	To ratify the selection of Hacker, Johnson & Smith, P.A. as the Company’s independent auditor for fiscal year 2020; and
	5.	To transact such other business as may properly come before the Annual Meeting.

Only shareholders of record at the close of business on April 3, 2013,5, 2021, are entitled to notice of, and to vote at, this meeting.

IMPORTANT

Whether or not you expect to attend in person, we urge you to vote your shares at your earliest convenience. This will ensure the presence of a quorum at the meeting. Promptly voting your shares by telephone, via the Internet, or by signing, dating, and returning the enclosed proxy card will save our company the expenses and extra work of additional solicitation. An addressed envelope for which no postage is required if mailed in the United States is enclosed if you wish to vote by mail. Submitting your proxy now will not prevent you from voting your shares at the meeting if you desire to do so, as your proxy is revocable at your option.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Heldheld on April 30, 2013.May 25, 2021. Our Proxy Statement and Annual Report on Form 10-K Annual Report for 20122020 are available athttp://www.optimumbank.com/stockholder-information/

OPTIMUMBANK HOLDINGS, INC.

2477 EAST COMMERCIAL BOULEVARD

FORT LAUDERDALE, FLORIDA2929 East Commercial Boulevard

Fort Lauderdale, Florida 33308

PROXY STATEMENT

20132021 ANNUAL MEETING OF SHAREHOLDERS

APRIL 30, 2013TO BE HELD ON MAY 25, 2021

This Proxy Statement will be first mailed to shareholders on or about April [], 2013.20, 2021. It is furnished in connection with the solicitation of proxies by the Board of Directors of OptimumBank Holdings, Inc. (the “Company”) to be voted at the annual meeting of the shareholders of the Company, which will be held at 10:00 a.m. on Tuesday, April 30, 2013,May 25, 2021, at the executive offices of OptimumBank (the “Bank”), 24772929 East Commercial Boulevard, Fort Lauderdale, Florida 33308, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. Shareholders who execute proxies retain the right to revoke them at any time before the shares are voted by proxy at the meeting. A shareholder may revoke a proxy by delivering a signed statement to the Secretary of the Company at or prior to the annual meeting or by executing and delivering another proxy dated as of a later date. The Company will pay the cost of solicitation of proxies.

Shareholders of record at the close of business on April 3, 20135, 2021 will be entitled to vote at the meeting on the basis of one vote for each share held. On the record date, there were 31,511,2013,214,497 outstanding shares of common stock outstanding, held of record by 87256 shareholders. There were approximately 1,141 shareholders who hold the shares through in “street name.”

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

When and where will the annual meeting take place?

The annual meeting will be held on April 30, 2013May 25, 2021 at 10:00 a.m. (Eastern Daylight Time)(local time), at the executive offices of the Bank, 24772929 East Commercial Boulevard, Fort Lauderdale, Florida 33308.

Why did I receive this proxy statement?

You received this proxy statement because you held shares of the Company’s common stock on April 3, 20135, 2021 (the “Record Date”) and are entitled to vote at the annual meeting. The Board of Directors is soliciting your proxy to vote at the meeting.

What am I voting on?

You are being asked to vote on four items:

1.  The election of four Directors (see page 6);

2.  To approve the issuance and sale of up to a total of 7,333,333 shares of the Company’s common stock at a price of $0.30 per share to Moishe Gubin under the terms of a Stock Purchase Agreement between the Company and Mr. Gubin (see page 10);

3.  To approve the Reverse Stock Split pursuant to which every four (4) outstanding shares of the Company’s common stock would be combined into (1) outstanding share of the Company’s common stock on a record date to be established by the Company’s Board of Directors following the annual meeting (see page 14); and

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4.  The ratification of the appointment of Hacker, Johnson & Smith, PA as the Company’s independent registered public accounting firm for the 2013 fiscal year (see page 21).

How do I vote?

Shareholders of Record

If you are a shareholder of record, there are fourthree ways to vote:

• By toll free telephone at 1-866-894-0537.

•● By internet at www.continentalstock.comhttp://www.cstproxyvote.com;

•

● If you request printed copies of the proxy materials, you may vote by proxy by completing and returning your proxy card in the postage-paid envelope provided by the Company; or

•

● By voting in person at the meeting.

Street Name Holders

Shares which are held in a brokerage account in the name of the broker are said to be held in “street name.”

If your shares are held in street name, you should follow the voting instructions provided by your broker. If you requested printed copies of the proxy materials, you may complete and return a voting instruction card to your broker, or, in many cases, your broker may also allow you to vote via the telephone or Internet. Check your notice from your broker for more information. If you hold your shares in street name and wish to vote at the meeting, you must obtain a legal proxy from your broker and bring that proxy to the meeting.

Regardless of how your shares are registered, if you request printed copies of the proxy materials, complete and properly sign the accompanying proxy card and return it to the address indicated, it will be voted as you direct.

What is the deadline for voting via Internet or telephone?

Internet and telephone voting is available through 11:59 p.m. (Eastern Daylight Time) on Monday, April 29, 2013May 24, 2021 (the day before the annual meeting).

What are the voting recommendations of the Board of Directors?

The Board of Directors recommends that you vote in the following manner:

1.       FOR each of the persons nominated by the Board of Directors to serve as Directors;

2.       FOR the approval of the issuance and sale of up to a total of 7,333,333700,000 shares of the Company’s common stock at a price of $0.30 per share to Moishe Gubin under the terms of a Stock Purchase Agreement between the Company and Mr. Gubin.in exchange for Trust Preferred Securities issued by OptimumBank Capital Trust I;

3.       FOR the approval of the Reverse Stock Split pursuant to which every four (4) outstanding sharesparticipation of certain directors in the Company’s common stock would be combined into (1) outstanding share ofexchange offer for the

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Company’s common stock on a record date to be established by the Company’s Board of Directors following the annual meeting.

4.       FOR the ratification of the appointment of Hacker, Johnson & Smith, PAP.A. as the Company’s independent registered public accounting firm for the 20132021 fiscal year.

Unless you give contrary instructions in your proxy, the persons named as proxies will vote your shares in accordance with the recommendations of the Board of Directors.

Will any other matters be voted on?

We do not know of any other matters that will be brought before the shareholders for a vote at the annual meeting. If any other matter is properly brought before the meeting, your proxy would authorize Moishe Gubin and Sam BorekJoel Klein of the Company to vote on such matters in their discretion.

Who is entitled to vote at the meeting?

Only shareholders of record at the close of business on the Record Date are entitled to receive notice of and to vote at the annual meeting. If you were a shareholder of record on that date, you will be entitled to vote all of the shares that you held on that date at the annual meeting, or any postponement or adjournment of the meeting.

How many votes do I have?

You will have one vote for each share of the Company’s common stock that you owned on the Record Date.

How many votes can be cast by all shareholders?

The Company had 31,511,2013,214,497 outstanding shares of common stock on the Record Date. Each of these shares is entitled to one vote. There is no cumulative voting.

How many votes must be present to hold the meeting?

The holders of a majority of the Company’s common stock outstanding on the Record Date must be present at the meeting in person or by proxy in order to fulfill the quorum requirement necessary to hold the meeting. This means at least 15,755,6011,607,249 shares must be present in person or by proxy.

If you vote, your shares will be part of the quorum. Abstentions and broker non-votes will also be counted in determining the quorum. A broker non-vote occurs when a bank or broker holding shares in street name submits a proxy that states that the broker does not vote for some or all of the proposals because the broker has not received instructions from the beneficial owners on how to vote on the proposals and does not have discretionary authority to vote in the absence of instructions.

We urge you to vote by proxy even if you plan to attend the meeting so that we will know as soon as possible that a quorum has been achieved.

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What vote is required to approve each proposal?

For the election of Directors (Proposal No. 1), the affirmative vote of a plurality of the votes present in person or by proxy and entitled to vote at the meeting is required. A proxy that has properly withheld authority with respect to the election of one or more Directors will not be voted with respect to the Director or Directors indicated, although it will be counted for the purposes of determining whether there is a quorum.

For the approval of the issuance and sale of up to a total of 7,333,333700,000 shares of the Company’s common stock at a price of $0.30 per share to Moishe Gubin under the terms of a Stock Purchase Agreement between the Company and Mr. Gubinin exchange for Trust Preferred Securities issued by OptimumBank Capital Trust I (Proposal No. 2), the affirmative vote of athe majority of the shares represented in person or by proxy and entitled to vote at the meetingvotes cast for this proposal will be required for approval. An abstention with respect to this proposalAs such, abstentions and broker non-votes will not be voted with respect toaffect the amendment, although itoutcome of the vote, but will be counted for determining the purposesexistence of determining whether there is a quorum.

For the approval of the Reverse Stock Split pursuant to which every four (4) outstanding sharesparticipation of certain directors in the Company’s common stock would be combined into (1) outstanding share ofexchange offer for the Company’s common stockTrust Preferred Securities (Proposal No. 3), the affirmative vote of athe majority of the shares represented in person or by proxy and entitled to vote at the meetingvotes cast for this proposal will be required for approval. An abstention with respect to this proposalAs such, abstentions and broker non-votes will not be voted with respect toaffect the amendment, although itoutcome of the vote, but will be counted for determining the purposesexistence of determining whether there is a quorum.

For the ratification of the appointment of Hacker, Johnson & Smith, PAP.A. (Proposal No. 4), the affirmative vote of a majority of the shares represented in person or by proxy and entitled to vote at the meeting will be required for approval. An abstention with respect to this proposal will be counted for the purposes of determining the number of shares entitled to vote that are present in person or by proxy. Accordingly, an abstention will have the effect of a negative vote.

Can I change my vote?

Yes. If you are a shareholder of record, you may change your vote at any time before your proxy is voted at the annual meeting. You can do this in one of three ways. First, you can send a written notice stating that you would like to revoke your proxy. Second, you can submit new proxy instructions either on a new proxy card, by telephone or via the Internet. Third, you can attend the meeting, and vote in person. Your attendance alone will not revoke your proxy. If you have instructed a broker to vote your shares, you must follow directions received from your broker to change those instructions.

Who can attend the annual meeting?

Any person who was a shareholder of the Company on April 3, 20135, 2021 may attend the meeting. If you own shares in street name, you should ask your broker or bank for a legal proxy to bring with you to the meeting. If you do not receive the legal proxy in time, bring your most recent brokerage statement so that we can verify your ownership of the Company’s stock and admit you to the meeting. However, you will not be able to vote your shares at the meeting without a legal proxy.

What happens if I sign and return the proxy card but do not indicate how to vote on an issue?

If you return a proxy card without indicating your vote, your shares will be voted as follows:

• FOR each of the nominees for Director named in this proxy statement;

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• FOR the approval of the issuance and sale of up to a total of 7,333,333 shares of the Company’s common stock at a price of $0.30 per share to Moishe Gubin under the terms of a Stock Purchase Agreement between the Company and Mr. Gubin.

• FOR the approval of the Reverse Stock Split pursuant to which every four (4) outstanding shares of the Company’s common stock would be combined into (1) outstanding share of the Company’s common stock on a record date to be established by the Company’s Board of Directors following the annual meeting.

• FOR ratification of the appointment of Hacker, Johnson & Smith, PA as the independent registered public accounting firm for the Company for the 2013

	●	FOR each of the nominees for Director named in this proxy statement;
	●	FOR the approval of the issuance of up to 700,000 shares of common stock in exchange for Trust Preferred Securities issued by OptimumBank Capital Trust I;
	●	FOR the approval of the participation of certain directors in the exchange offer for the Trust Preferred Securities described in Proposal 2; and
	●	FOR ratification of the appointment of Hacker, Johnson & Smith, P.A. as the independent registered public accounting firm for the Company for the 2021 fiscal year.

Who can help answer my questions?

If you are a shareholder, and would like additional copies, without charge, of this proxy statement or if you have questions about the annual meeting, including the procedures for voting your shares, you should contact:

Lisa Seltzer, Corporate Secretary

Mary Franco, Operations Assistant - (954) 776-2332900-2805

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PROPOSAL NO. 1

ELECTION OF DIRECTORS

NOMINEES

Our Board of Directors currently consists of fourhas 7 members, and four directors are elected annually to be elected atone-year terms. Six of our current directors have been nominated for election by the annual meetingBoard to hold office until the next2022 annual meeting and the election of shareholders and until their successors are elected and qualified. successors. Jeffry Wagner is currently serving as a director but will not stand for re-election at the 2021 annual meeting.

All of the nominees are current directors. The Board of Directors has nominated all fourcurrently serve on our Board. Each of the current directors for election atnominees, other than Michael Blisko, has previously been elected by the 2013 annual meeting, based on the recommendation of the Company’s independent directors.shareholders.

The accompanying proxy will be voted in favor of the following persons to serve as directors unless the shareholder indicates to the contrary on the proxy. The election of the Company’s directorsDirectors requires a plurality of the votes cast in person or by proxy at the meeting. Management expects that each of the nominees will be available for election, but if any of them is unable to serve at the time the election occurs, the proxy will be voted for the election of another nominee to be designated by the Board of Directors.

Moishe Gubin, age 36,44, has served as Chairman of the Company since December 2011 and as a directorDirector of the Company and OptimumBank since March 2010. Since 2009, he has served asMr. Gubin is Chief Executive Officer of Strawberry Fields REIT, LLC, an owner of a portfolio of healthcare properties. From 2004 to 2014, Mr. Gubin was the chief executive officerChief Financial Officer and manager of United Rx,Infinity Healthcare Management, LLC, a long term care pharmacy,company engaged in managing skilled nursing facilities and since November 2003, his primary occupation has been the ownership and financial management of nursing homes and related rehabilitation facilities located in Indiana and Illinois. Since 2005, he has served as the chief financial officer and principal of New York Boys Management, LLC, located in South Bend, Indiana, which provides consulting services for twelve nursing homes and rehabilitation facilities. Since 2005, Mr. Gubin has also served as the chief financial officer of TriCare Rehab, which provides rehabilitation services forother health care facilities, located in Hillside, Illinois. From November 2003 to November 2006, Mr. Gubin served as the controller of Crestmark of Roselawn, a nursing home located in Demotte, Indiana. From January 2002 to October 2003, Mr. Gubin served as the Indiana State Director of Budgeting of Care Centers, Inc., where he was responsible for the financial management of twelve nursing homes. From September 2000 to January 2002, he served as controller of Fairview Nursing Care Center and Adult Day Care Center, a 200-bed nursing home located in New York. From September 1999 to June 2000, he served as assistant controller of Park Terrace Care Center, a 200 bed nursing home also located in New York. He served as Director of Operations for Yeshiva of Great Neck, New York, from October 1996 to September 1999.facilities. Mr. Gubin graduated from Touro Liberal Arts and Science College, in New York, New York, with a BS in Accounting and Information Systems and a Minor in Jewish Studies. Mr. Gubin is the founder of the Midwest Torah Center Inc., a non-profit spiritual outreach center (www.midwesttorah.org). He also attended Yeshiva Bais Israel where he received a BA in Talmudic Literature. Mr. Gubin has been a licensed Certified Public Accountant in the State of New York since 2010.

Seth Gillman,age 44, has been a director of the Company and OptimumBank since July 2011. Since 2005, Mr. Gillman has served as founder, administrator and managing member of Passages Hospice, LLC, a hospice care provider located in Elgin, Illinois. From 2001 to 2005, Mr. Gillman served as general counsel, director of business development, and corporate secretary to ASTA Healthcare Company, Inc., a management company for nursing home facilities located in Elgin, Illinois. From 1996 to 2001, Mr. Gillman served as legal counsel, then general counsel, of Doctors Hospital of Hyde Park, located in Chicago, Illinois, and from 1994 to 1996, as a staff attorney and legislative aid to the Chicago City Council. Mr. Gillman received his Juris Doctor from Benjamin N. Cardozo School of Law, in New York New York, and his L.L.M. in Health Law from DePaul University School of Law, in Chicago, Illinois. Mr. Gillman is licensed as an attorney and nursing home administrator in the State of Illinois.

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Joel Klein,age 66,73, became a directorDirector of the Company and OptimumBank in February 2012. Since February 2020, Mr. Klein has also been retired since 2011. From 2006 until 2010, he servedserving as the Company’s interim Chief Financial Officer, until the Company designates his replacement. Mr. Klein worked in accounting and finance for Chicago-basedmore than 41 years, including six years as a CPA in public accounting. From 1989 to 1990, he was the Chief Financial Officer of Choice Drug Systems, Inc., a medical supply company primarily to skilled nursing facilities. From 1991 to 1994, he was a Vice-President of Equilease Corporation, an equipment leasing company. He then served as a Vice President of The Stamford Capital Group, Inc., an independent corporate advisory company, from 1994 to 2005, providing high quality advisory services to medium market clients, particularly mergers and acquisitions, divestitures, management buy outs and other strategic financial advisory services. From 2006 to 2010, he was the Chief Financial Officer of Taxi Affiliation Services, LLC, a taxi company that provides support services to transportation companieslocated in five states and over twenty separate municipalities. Between 1994 and 2005, he was a vice president at The Staimford Group, Inc., a Connecticut based provider of investment and merchant banking services. Prior to his service with The Staimford Group,Chicago, Illinois. Mr. Klein served in various financial management capacities, including Chief Financial Officer, Controller, and Senior Accountant with various firms, including Equilease Corporation, Choice Drug Systems, Inc., The Leasing Equipment Group, Ltd., I.C. Herman & Co., Goldstein, Golub, Kessler & Co. CPA’s, and Brout, Isaacs & Co. CPA’s.has been a private investor since 2010. Mr. Klein received a Bachelor of Science degree in Accounting from Brooklyn College in 1969. He has been licensed as a CPA in the State of New York since 1972.

Sam BorekMartin Z. Schmidt, age 62,73, became a Director of the Company and OptimumBank in August 2015. Mr. Schmidt has been in the financial and estate planning, securities and insurance industries since 1975. Since 2013, he has been an independent financial consultant with National Holdings Corp/Gilman Ciocia. In 2007, he served in a marketing capacity and liaison to the national senior accounting firms for Twenty-First Securities, Inc., introducing market based solutions for tax and corporate based problems within their institutional client base. From 1993 to 2000, he served as a Vice President and Branch Manager for multiple branches of Advest, Inc., a major regional securities and investment management firm. Mr. Schmidt served with the 423^rd Military Police, U.S. Army Reserve, for five years, completed 3 years of coursework towards an MBA in Management Science and Statistics at the Lubin Graduate School of Business Administration in 1973, and graduated Brooklyn College with a B.A. in Economics in 1969.

Avi M. Zwelling, age 48, became a Director of the Company and OptimumBank in December 2017. Mr. Zwelling is the managing partner of Zwelling Law, PLLC, which has offices in Boca Raton, Florida and Chicago, Illinois. The firm handles commercial litigation, insurance defense, banking, and real estate matters. Mr. Zwelling graduated from Columbia University in New York, New York, with a B.A. in Comparative Religion, and earned a law degree from the Benjamin N. Cardozo School of Law, also in New York, New York. Mr. Zwelling has been providing legal services to the Company since 2012.

Thomas Procelli, age 67, has served as a directorDirector of the Company since March 2004July 25, 2017 and OptimumBank since October 2012. Mr. Procelli is Director of Operations for Better Living Solutions, a Tallahassee counseling and wellness outpatient center specializing in eating disorder treatment and offers financial institution and business support services through his firm TAP Independent Consulting. Mr. Procelli served as an Executive Vice President since the founding of OptimumBank in October 2000 through September 2015 in the positions of Chief Technology Officer and Chief Operating Officer. Mr. Procelli has been in banking for over 40 years having a diverse background in operations, information systems, compliance and audit. Outside of banking, he has worked in public accounting at the firm of Coopers and Lybrand and in mortgage origination software product development at Fiserv. He received his MBA in Finance in 1979 and his BBA degree in Accounting in 1976 from Hofstra University located in Hempstead, New York.

Chan Heng Fai Ambrose, age 76, has served as a Director since June 2018. Mr. Chan is an expert in banking and finance, with years of experience in these industries. He has also restructured 35 companies in various industries and countries in the past 40 years. Mr. Chan serves as the CEO of Singapore eDevelopment Limited (“Singapore eDevelopment”), a limited company listed on the Catalist of the Singapore Exchange Securities Trading Limited. Singapore eDevelopment is a diversified holding company. He was appointed as a director of OptimumBankSingapore eDevelopment in March 2014. He is also Non-Executive Director of ASX-listed bio-technology company Holista Colltech Limited, a position he has held since August 2001.July of 2013. From September of 1992 until July of 2015, Mr. Chan also served as Managing Chairman of HKSE-listed Heng Fai Enterprises Limited, a holding company now known as ZH International Holdings Limited. He also served as director of Global Medical REIT Inc. (NYSE: GMRE) from December of 2013 until July of 2015 and as director of American Housing REIT Inc. from October of 2013 to July of 2015.

Michael Blisko, age 44, has been nominated to serve as a director. Mr. Blisko is the Chief Executive Officer for Infinity Healthcare Management, LLC, a company engaged in managing skilled nursing facilities and other health care facilities. Mr. Blisko is currently a manager of Strawberry Fields REIT, LLC, an owner of a portfolio of healthcare properties. Mr. Blisko is a principal for a myriad of ancillary companies including United Rx, a long term pharmacy, Heritage Home Health and Hospice, Xcel Med, Bella Monte Recovery, and Core Centers Recovery. Currently, Mr. Blisko serves on the Board of Directors for the Indiana Healthcare Association and is on the committee for Post-Acute Care for the American Healthcare Association. Previously, Mr. Blisko was the Chairman of the Board ofRegulatory Committee with the Company between December 2009Illinois Council for Long Term Care from 2014 to 2016, and December 2011, and currently serves as Vice-Chairman. Mr. Borek has served since 1977 as the managing partner of the law firm of Borek & Goldhirsh in Wilmette, Illinois. From 1998 to 2006, Mr. Borek served as a director, and from 2004 to 2006, as Chairman ofwas also on the Board of NCB Holdings, Inc.,Directors for the Illinois Council of Long Term Care. Mr. Blisko is a bank holding company locatedLicensed Nursing Home Administrator with a Master’s Degree in Chicago, Illinois. Mr. Borek received a Bachelor of Arts degreeHealthcare Administration from theHofstra University of Illinois Urbana in 1972 and a Juris DoctorBA in Talmudic Law from the DePaul University School of Law in 1975 and has practiced law in Illinois for the past 34 years. Mr. Borek is very involved in community activities, including prior service as President of the Niles Township School Board for High School District 219, member of the Executive Board of the Niles Township Legislative Coalition, and Director of the Midwest Friends of Israel Sport Center for the Disabled and Maccabi USA Sports for Israel.Bais Yisroel, Jerusalem. -

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR“FOR” ALL DIRECTOR NOMINEES.

CORPORATE GOVERNANCE

Director Independence

The Board of Directors analyzed the independence of each director and determined that the following directors meetChan Heng Fai Ambrose, Moishe Gubin, Thomas Procelli, Martin Schmidt, Avi Zwelling and Jeffry Wagner each met the standards of independence ofunder the applicable listing standards of The NASDAQ Stock Market (“NASDAQ”): Seth Gillman, Moishe Gubin and Joel Klein.. The Board has also determined that Michael Blisko, a nominee for director, would be independent.

One of the directors, Sam Borek, is not considered independent. Mr. Borek served as a consultant to the Company until July 2011.

The Board of Directors Meetings and Committees

OptimumBank Holdings’

The Company’s Board of Directors met 1812 times during 2012.2020. The independent directors met once in executive session without management two times during 2012.2020. Each of the current members of the Board of Directors attended at least 75% of the meetings of the Board and committees on which he served.served held while he has been a Director. The Company’s Board of Directors has established several standing committees, including the following:

Compensation Committee

The Compensation Committee currently consists of three directors: Moishe Gubin (Chairman), Seth GillmanThomas Procelli, and Joel Klein, each of whom isAvi Zwelling. Messrs. Gubin, Zwelling, and Procelli are independent under the NASDAQ listing standards. The Compensation Committee reviews and recommends to the Board of Directors the compensation arrangements for executive management and non-employee directors. The Compensation Committee met fourthree times during 20122020 and operates under a written charter. A copy of the current Compensation

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Committee Charter can be viewed on the Company’s website atwww.optimumbank.com/information-center/corporate-governance/corporate-governance.

In 2012,2020, no executive officer had a role in determining or recommending the amount or form of outside director compensation. The Compensation Committee does not delegate its authority to any other persons. The Compensation Committee does not use consultants to determine or recommend the amount or form of compensation arrangements.

Nominating Committee

The Company has no formal nominatingNominating Committee currently consists of Mr. Gubin (Chairman), Mr. Procelli, and Mr. Zwelling. The committee or nominating committee charter. Instead, the three independent members of the Board, Messrs. Gillman, Gubin and Klein perform the functions of a nominating committee. Pursuant to the Corporate Governance Guidelines adopted by the Board of Directors, the independent directors are responsible for recommending for the full Board’s selection the slate of director nominees for election.

These guidelines also provide for the independent directors to evaluateevaluates new candidates and current directors and recommendrecommends candidates to the Board to fill vacancies occurring between annual shareholder meetings. A copy of the charter for the Nominating Committee can be viewed on the Company’s website at www.optimumbank.com/information-center/corporate-governance.

All of the director nominees of the Company set forth in the Proposal entitled “Election of Directors” were recommended by a majority of the independent directors of the Company. The independent directors in their capacity as the nominating committeeNominating Committee held one meeting during 2012. 2020.

The Board of Directors believes it is appropriate for the Company’ s independent directors, and not a separateNominating Committee will initially consider nominating committee, to recommend nominees and evaluate candidates due to its belief that all directors should participate in the nomination process. A copy of the Company’s current Corporate Governance Guidelines can be viewed on the Company’s website atwww.optimumbank.com/information-center/corporate-governance.

The Board initially looks to nominating its existing directors for re-election to the Board as appropriate or to other Directordirector nominees proposed, as appropriate, by the directors, and in doing so considers each director’s independence, if required, share ownership, skills, performance and attendance at a minimum of 75% of the Board and respective committee meetings. In evaluating any candidates for potential director nomination, the Board of Directors, and specifically the independent directors,Nominating Committee will consider candidates that are independent, if required, who possess personal and professional integrity, have good business judgment, relevant experience and skills, including banking, financial, real estate and/or legal expertise, who would be effective as a Directordirector in conjunction with the full Board, who would commit to attend Board and committee meetings, and whose interests are aligned with the long-term interests of the Company’s shareholders.

The Board, including its independent directors,Nominating Committee will consider director candidates recommended by shareholders, provided the recommendation is in writing and delivered to the Corporate Secretary of the Company at the principal executive offices of the Company not later than the close of business on the 120th day prior to the first anniversary of the date on which the Company first mailed its proxy materials to shareholders for the preceding year’s annual meeting of shareholders. For the 20142022 annual meeting, recommendations must be received by December 5, 2013.21, 2021. The nomination and notification must contain the nominee’s name, address, principal occupation, total number of shares owned, consent to serve as a director, and all information relating to the nominee and the nominating shareholder as would be required to be disclosed in solicitation of proxies for the election of such nominee as a director pursuant to the SEC’s proxy rules.

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Audit Committee

The Audit Committee of the Board of Directors is responsible for the oversight of the Company’s financial and accounting reporting processes and the audits of the Company’s financial statements. The Audit Committee is currently composed of three non-employee directors consisting of Joel KleinJeffry Wagner (Chairman), Seth Gillman,Thomas Procelli and Moishe Gubin.Martin Schmidt. The Audit Committee operates under a written charter adopted and approved by the Board of Directors. A copy of the current Audit Committee Charter can be viewed on the Company’s website atwww.optimumbank.com/information-center/corporate-governance.

The Board has determined that each memberall of the members of the Audit Committee iswere financially literate and independent in accordance with the more stringent NASDAQ listing standards applicable to audit committee members. The Board also has determined that Joel KleinJeffry Wagner is an “audit committee financial expert” as defined by SEC rules. The Audit Committee met seven5 times during 2012.2020. A Report from the Audit Committee is included on page 21.20.

Attendance by Directors at Annual Shareholders’ Meetings

The Company expects its directors to attend the annual meeting. All of the current directors attended the 20122020 annual meeting.meeting (held in August 2020).

Shareholder Communications with the Board of Directors

The Board of Directors has adopted a formal process by which shareholders may communicate with the Board. Shareholders who wish to communicate with the Board may do so by sending written communications addressed to: Board of Directors, OptimumBank Holdings, Inc., at 24772929 East Commercial Boulevard, Fort Lauderdale, Florida 33308, attention: Lisa Seltzer, Corporate Secretary.Attention: Mary Franco. All communications will be compiled by the Corporate Secretary and submitted to the members of the Board. Concerns about accounting or auditing matters or possible violations of the Company’s Senior Financial Officer Code of Ethics should be reported under the procedures outlined in the Company’s Whistleblower Policy. Our Whistleblower Policy is available on the Company’s website atwww.optimumbank.com/www.optimumbank.com/information-center/corporate-governance.

Hedging Policy

The Company has not adopted a policy concerning hedging of the Company’s shares, although it plans to do so following the annual meeting. Accordingly, executive officers and directors of the Company are currently permitted to engage in hedging shares of the Company’s common stock, including, but not limited to, engaging in short sales or trading in puts, calls, covered calls or other derivative products.

Board Leadership Structure and Role in Risk Oversight

The Company’s policy is to separate the roles of chairmanChairman and chief executive officerChief Executive Officer of the Company have been separate since December 2011. Mr.Company. At the present time, Moishe Gubin currently serves as chairman. Prior to February 2013, Richard Browdy served as the Company’s chief executive officer. Mr. Browdy resigned in February, 2013. Chairman of the Board.

The Board believes that risk management is an important component of the Company’s corporate strategy. While we assess specific risks at the Company’s committee levels, the Board, as a whole, oversees the Company’s risk management process, and discusses and reviews with management major policies with respect to risk assessment and risk management. The Board is regularly informed through committee reports about the Company’s risks. The Audit Committee reviews and assesses the Company’s processes to manage financial and financial reporting risk. It also reviews the Company’s policies for risk assessment and assesses steps management has taken to control significant risks. The Compensation Committee oversees risks relating to compensation practices and policies.

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PROPOSAL NO. 2

APPROVAL OF THE ISSUANCE AND SALEOF UP TO 700,000 SHARES OF COMMON STOCK TO MOISHE GUBININ EXCHANGE FOR TRUST PREFERRED SECURITIES ISSUED BY OPTIMUMBANK CAPITAL TRUST I

The following discussion of the Gubin transaction is qualified by reference to the Amended and Restated Stock Purchase Agreement filed as Exhibit A to this proxy statement.

Summary of the Gubin Transaction

On March 22, 2013, the Company and Moishe Gubin entered into an amended and restated stock purchase agreement which provides for the issuance and sale of 7,333,333 shares of Company common stock, $0.01 par value, to Mr. Gubin at a price of $0.30 per share (the “Stock Purchase Agreement”). Mr. Gubin currently serves as a Chairman of the Company and the Bank.

The closing of the transactions contemplated by the Stock Purchase Agreement (the “Gubin Transaction”) is subject to certain conditions, including approval of the transaction by the shareholders of the Company, the Federal Reserve and the State of Florida Office of Financial Regulation.

If these conditions are fulfilled, the Company would receive proceeds from the transaction of $2,200,000. The agreement terminates if the conditions are not fulfilled and the closing does not occur by September 30, 2013.

The Company will also grant Mr. Gubin certain registration rights in connection with the purchase of the shares pursuant to the termsis seeking shareholder approval of a registration rights agreementproposal to be entered into at the closing. Substantially all the proceeds from the Gubin Transaction will be utilized by the Companyissue up to increase the capital of the Bank.

As of March 15, 2013, the Company had 31,511,201 outstanding shares of common stock, including 2,612,143 shares that were owned by Mr. Gubin. Upon the issuance of 7,333,333 additional shares of Company’s common stock to Gubin, and assuming no other issuance of shares of Company common stock, Gubin would own approximately 9,945,476700,000 shares of the Company’s common stock or 25.6% of the total outstanding shares.

Why We Are Seeking Shareholder Approval

in exchange for trust preferred securities (the “Trust Preferred Securities”) issued by OptimumBank Capital Trust I (the “Trust”). The issuance of shares in the Gubin Transaction is being submitted to the shareholders at the annual meeting to comply with the shareholder approval requirements of NASDAQ Rule 5635.

Under NASDAQ Rule 5635(b), companies that have securities listed on NASDAQ must obtain shareholder approval prior to the issuance of common stock when the issuance or potential issuance would result in a “change of control” as defined by NASDAQ (the “Change of Control Rule”). NASDAQ generally characterizes a transaction whereby an investor or group of investors acquires, or obtains the right to acquire, 20% or more of the voting power of an issuer on a post-transaction basis as a “change of control” for purposes of Rule 5635(b).

Under NASDAQ Rule 5635(c), as interpreted by NASDAQ, companies which have securities listed on NASDAQ must also obtain shareholder approval prior to the issuance of common stock in a private offering to the Company’s executive officers, directors and their affiliates at a price less than the market value per share (the “Insider Purchase Rule”).

Under NASDAQ Rule 5635(d), companies that have securities listed on NASDAQ must obtain shareholder approval prior to the issuance of common stock in a private offering at a price less than the greater of the book and market value per share of such common stock, if the issuance amounts to

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twenty percent (20%) or more of the common stock or twenty percent (20%) or morerequires the approval of the voting power of a company outstanding before the issuance (the “20% Rule”).

The Company’s Board of Directors has submitted this Proposal No. 2 to the Company’s shareholders under Nasdaq Marketplace Rule 5635(d).

Background

The Trust was formed by the Company in 2004 for approval because the Changepurposes of Control Rule,raising capital for OptimumBank. At that time, the Insider Purchase RuleTrust raised $5,155,000 through the sale of 5,000 Trust Preferred Securities to a third party investor and the 20% Rule would applyissuance of 155 common trust securities to issuancethe Company.

The Trust utilized the proceeds of $5,155,000 to purchase a Junior Subordinated Debenture from the Company (the “Debenture”). The Trust Preferred Securities represent undivided beneficial interests in the Debenture. The Debenture has a term of 30 years and is payable in full on October 7, 2034. The Debenture currently bears interest at a floating rate equal to three-month LIBOR rate plus 2.67%

On May 8, 2018, Preferred Shares, LLC acquired all 5,000 of the Trust Preferred Securities from a third party at a cost of approximately $1,411,000. Preferred Shares, LLC is an affiliate of Moishe Gubin, a director of the Company. Mr. Gubin owns, directly or indirectly, all of the membership interests in Preferred Shares, LLC. Preferred Shares, LLC has subsequently sold and/or transferred 3,087 of the Trust Preferred Securities to unaffiliated third parties.

During 2018, the Company issued 301,778 shares of the Company’s common stock in exchange for 694 Trust Preferred Securities. For accounting purposes, the Gubin Transaction.

The Change of Control Rule applies becauseTrust Preferred Securities acquired by the number of sharesCompany were deemed to be purchased by Mr. Gubin exceeds 20% of the outstanding shares of the Company.

The Insider Purchase Rule applies because Mr. Gubin is a director of the Company and the current closing price of the Company’s common stock is greater than the offering price of $0.30 per share in the Gubin Transaction. In this connection, the closing price on March 15, 2013, was $0.50, which is greater than the $0.30 price to be paid by Mr. Gubin.

The 20% Rule applies because the shares to be sold to Mr. Gubin exceed twenty percent (20%) of the common stock of the shares of the Company outstanding before the issuance and the current closing price of the Company’s common stock is greater than the offering price of $0.30 per share in the Gubin Transaction.

The approval sought under this Proposal No. 2 will be effective to satisfy the shareholder approval required by the Change of Control Rule, the Insider Purchase Rule and the 20% Rule. Under the NASDAQ Rule 5635, the minimum vote which will constitute shareholder approval of this Proposal No. 2 is a majority of the total votes cast on the proposal in person or by proxy at the special meeting.

Background and Reasons for the Transaction with Mr. Gubin

The principal reason for the issuance of shares under the Stock Purchase Agreement is to increase the capital of OptimumBank in order to assist it in meeting its regulatory capital requirements.

Starting in 2008 and continuing through 2012, the Bank has experienced a substantial increase in the level of its non-performing loans, with associated credit losses, as a result of the nationwide economic recession and the related collapse in real estate values in south Florida. The Company sustained net losses of $11.5 million in 2009, $8.5 million in 2010, $3.7 million in 2011 and $4.7 million in 2012. These net losses have significantly reduced shareholders’ equity and the regulatory capital ratios for the Company and the Bank.

cancelled. As a result, of the losses incurred by the Bank and related operating issues, on April 14, 2010 the Bank consented to the issuance of an order (the “Consent Order”) by the Federal Deposit Insurance Corporation (the “FDIC”) and the State of Florida Office of Financial Regulation. On June 22, 2010 the Company entered into a written agreement with the Board of Governors of the Federal Reserve System (the “Federal Reserve”).

The Consent Order requires, among other things, that the Bank to achieve and maintain a tier 1 leverage capital ratio of at least 8.0% of the Bank’s total average assets and a total risk-based capital ratio of at least 12.0% of its total risk-weighted assets by July 14, 2012. At December 31, 2012 the Bank’s tier 1 leverage and total risk-based capital ratios were 8.12% and 11.48%, respectively. At December 31, 2012, the Bank would have needed approximately $600,000cancelled $694,000 in additional regulatory capital to meet the total risk-based capital ratio required by the Consent Order.

In order to address its declining capital levels and increased capital requirements, in July 2011, the Company commenced an offering of shares of Company’s common stock in a private placement (the “Private Placement”). The Private Placement was approved by the Company’s shareholders at a special meeting held on September 28, 2011.

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The Company received approximately $12,256,000 in the Private Placement through the sale of approximately 30,639,250 shares at a price of $0.40 per share.

Mr. Gubin purchased 2,612,143 shares in the Private Placement and from other shareholders, but was unable to purchase more than 10% of the Company’s shares without obtaining regulatory approval. In response to this limitation, the Company and Mr. Gubin entered into the original Stock Purchase Agreement dated as of October 25, 2011, pursuant to which Mr. Gubin agreed to purchase 6,750,000 shares of common shares at a price of $0.40, or a total of $2,700,000. The Company and Mr. Gubin have subsequently amended this agreement on three occasions in order to provide Mr. Gubin with additional time to obtain required regulatory approvals. Although Mr. Gubin has filed the required applications with Federal Reserve and the State of Florida Office of Financial Regulation, together with several amendments, these agencies have not yet approved the applications. At the time present, neither the Company nor Mr. Gubin are able to predict when or if the applications will be approved.

On March 22, 2013, the Company and Gubin entered into an Amended and Restated Stock Purchase Agreement in order reduce the purchase price from $0.40 per share to $0.30 per share, to increase the number of shares to be purchased from 6,750,000 to 7,333,333, and to extend the outside closing date to September 30, 2013.

Reason for the Gubin Transaction

The Company is seeking to complete the Gubin Transaction in order to assist the Bank in meeting the capital requirements of the Consent Order and to increase its lending and investment portfolio.

If the $2.2 million proceeds of the Gubin Transaction had been contributed to the Bank as of December 31, 3012, the Bank’s Tier 1 leverage and total risk-based capital ratios (on a pro forma basis) would have improved to 9.60% and 13.30%, respectively.

The actual improvement in the Bank’s capital ratios after the Gubin Transaction is completed will depend on the closing date of the Gubin Transaction; the level of the Bank’s assets and liabilities at that time, theprincipal amount of the Bank’s losses between December 31, 2012Trust Preferred Securities, together with accrued interest of $211,000, and increased its stockholders’ equity by the date of the closing, and the amount of any additional capital received from other sources.same amount.

The additional $2.2 million in capital from Mr. Gubin is expected to provide

During 2019, the Company and the Bank with additional working capital to implement the Bank’s business plan, including addressing non-performing loans and funding expanded lending and investment activities.

Reason for the Amended Gubin Transaction

The Board has agreed to amend the terms of the Gubin Transaction in order to reduce the price per share from $0.40 per share to $0.30 per share, and to increase the number of shares to be purchased from 6,750,000 shares to 7,333,333 shares. The Company has agreed to these changes because of the continuing losses incurred by the Company in 2012 and the decrease of the Company’s book value per share from $0.30 at December 31, 2011 to $0.22 at December 31, 2012. The Company agreed to increase the number of shares to be purchased in order to partially offset the decrease in the net proceeds of the sale to Mr. Gubin.

Transaction Documents

Stock Purchase Agreement.    The consummation of the Gubin Transaction is subject to the fulfillment of a number of conditions, including:

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• Gubin obtaining the requisite regulatory approval of the Federal Reserve and the State of Florida Office of Financial Regulation; and

• The Company obtaining shareholder approval of the Gubin Transaction.

The Stock Purchase Agreement may be terminated by the Company or Gubin if the closing does not occur by September 30, 2013, but not by any party whose failure to perform any obligations under the agreement required to be performed on or prior to such date has been the cause of, or results in, the failure of the transaction to close on or before such date. The Stock Purchase Agreement contains customary representation and warranties.

Registration Rights Agreement.  Under the terms of the Stock Purchase Agreement, the Company has agreed to provide Gubin with certain limited registration rights. The Company has agreed to file a registration statement on Form S-3 as soon as practicable after the closing with respect to the shares sold to Mr. Gubin, and to use reasonable best efforts to make such registration statement become effective. The Company is required to maintain this registration statement continuously in effect until all such shares have been sold or become eligible for sale without restrictions under Rule 144 promulgated under the Securities Act of 1933, as amended. The registration rights are subject to the right of the Company to delay registration to avoid disclosure of material nonpublic information. The holder of registrable securities must comply with certain standard provisions facilitating the filing and effectiveness of the registration statement as well.

Purchase Price of the Gubin Transaction

  In approving the terms of the Stock Purchase Agreement, the Board considered the fairness, from a financial point of view, the decrease in the price from $0.40 per share to $0.30 per share. The Board determined that the decrease in price was fair in light of the following factors:

  The Board did not engage any third parties to assist the Board in its determination of the offering price due to the Company’s limited resources.

Vote Required and Recommendation of Board of Directors

Assuming the existence of a quorum, this proposal will be approved if the number of shares voted in favor of this Proposal No. 2 exceeds the number of shares voted against the proposal. As such, abstentions and broker non-votes will not affect the outcome of the vote, but will be counted for determining the existence of a quorum.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF POTENTIAL ISSUANCE AND SALE TO MR. GUBIN OF 7,333,333 SHARES OF THE COMPANY’S COMMON STOCK AT A PRICE OF $0.30 PER SHARE

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PROPOSAL NO. 3

APPROVAL OF REVERSE STOCK SPLIT

Overview

The Company’s board of directors has unanimously approved a proposal to amend its articles of incorporation to implement a reverse stock split (the “Reverse Stock Split”), pursuant to which every four outstandingissued 924,395 shares of the Company’s common stock wouldin exchange for 1,881 Trust Preferred Securities. For accounting purposes, the Trust Preferred Securities acquired by the Company were deemed to be combined into one outstanding sharecancelled. As a result, the Company cancelled $1,881,000 in principal amount of the Company’s common stock on a record date to be establishedTrust Preferred Securities, together with accrued interest of $763,000, and increased its stockholders’ equity by the Company’s Board of Directors followingsame amount.

Prior to September 2020, the annual meeting.

The amendment will not changeCompany had been in default under the number of authorized shares of common stock or preferred stock, orJunior Subordinated Debenture due to the relative voting powerfailure to pay interest since 2015. In September 2020, the Company paid approximately $1.1 million to the holders of the Company’s shareholders. Becauseoutstanding Trust Preferred Securities, which represented all accrued interest through September 2020 under the number of authorized shares willJunior Subordinated Debenture attributable to the Trust Preferred Securities that had not be reduced,been cancelled. The Company has subsequently paid all accrued interest owed through March 31, 2021.

During December 2020, the number of authorized but unissuedCompany issued 171,500 shares of the Company’s common stock will materially increase and will be availablein exchange for reissuance512 Trust Preferred Securities. For accounting purposes, the Trust Preferred Securities acquired by the Company. Company were deemed to be cancelled. As a result, the Company cancelled $512,000 in principal amount of the Trust Preferred Securities, together with accrued interest of $2,000, and increased its stockholders’ equity by the same amount.

The Reverse Stock Split would affectprincipal owed by the Company in connection with the Junior Subordinated Debenture was $2,068,000 at March 31, 2021. There are currently 2,068 Trust Preferred Securities that are outstanding, all of which are owned by Preferred Shares, LLC.

As discussed more fully below, the Board has determined that the Company should make an offer to the holders of the Company’s common stock uniformly.

The Board unanimously approved and recommended seeking shareholder approvalTrust Preferred Securities to exchange the outstanding portion of the Reverse Stock Split on March 22, 2013.

If the shareholders approve the Reverse Stock Split, the Board will effect the Reverse Stock Split promptly after the annual meeting on a record date to be announced at least 15 days in advance.

Following the Reverse Stock Split, the number of the Company’s outstandingTrust Preferred Securities for newly-issued shares of common stock will be reduced from 31,511,201 sharesin order to 7,877,800 shares. The Reverse Stock Split will also affectreduce the Company’s outstanding stock options and shares of common stock issuedobligations under the Company’s Equity Incentive Plan. Under this plan,Trust Preferred Securities.

Proposed Exchange Offer

The Company is seeking shareholder approval to authorize the number of shares of common stock deliverable upon exercise or grant must be appropriately adjusted and appropriate adjustments must be madeCompany to make an exchange offer to the purchase price per share to reflect the Reverse Stock Split. The Reverse Stock Split will also affect the termsholders of the Gubin Transaction, with the number of sharesTrust Preferred Securities to be purchased to be reduced from 7,333,333 shares to 1,833,333, and the purchase price to be increased from $0.30 per share to $1.20 per share.

The Reverse Stock Split is not being proposed in response to any effort of which the Company is aware to accumulate theexchange their Trust Preferred Securities for shares of the Company’s common stock or obtain control of the Company, nor is it a plan by management to recommend a series of similar actions to the Board or our shareholders.stock.

There are certain risks associated with the Reverse Stock Split, and we cannot accurately predict or assure the Reverse Stock Split will produce or maintain the desired results (for more information

The exchange offer would be made on the risks see the section below entitled “Certain Risks Associated with the Reverse Stock Split”). However, the Board believes that the benefits to the Company and its shareholders outweigh the risks and recommends that you vote to approve the Reverse Stock Split.following terms:

Reasons for the Reverse Stock Split

The primary purpose for effecting the Reverse Stock Split would be to increase the per share price of the Company’s common stock. The Board of Directors believes that effecting the Reverse Stock Split would, among other things, help the Company to:

• Meet certain continued listing requirements of NASDAQ; and

• Appeal to a broader range of investors to generate greater investor interest in the Company.

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Meet Continued NASDAQ Listing Requirements.

Our common stockexchange offer is listed on the NASDAQ under the symbol “OPHC.” In August 2012, the NASDAQ provided notice to the Company that the decline in the share price of the Company’s common stock had caused itexpected to be outstructured as a tender offer for Trust Preferred Securities with an aggregate value of compliance with one of$2,100,000. Upon the NASDAQ’s continued listing standards. The NASDAQ listing rules require the closing bid price of a listed company’s common stock to be at least $1.00 per share. The Company’s trading price has been below $1.00 per share since May 9, 2012. On March 15, 2013, the closing trading price was $0.50.

Under the NASDAQ’s rules, in order to regain compliance with the listing standard, the Company’s closing bid price must be at least $1.00 within six months following receipt of the non-compliance notice. Notwithstanding the foregoing, if the Company determines to remedy the non-compliance by taking action that will require shareholder approval, such as the Reverse Stock Split, the NASDAQ will continue to list the Company’s common stock pending shareholder approval by no later than its next annual meeting, and the implementation of such action promptly thereafter. The Company will regain compliance with its listing standard if the share price promptly exceeds $1.00 per share for a period of ten business days.

The Board expects that the Reverse Stock Split will increase the price of the Company’s common stock above $1.00 per share at the effectivecommencement date of the reverse split. The stock price followingtender offer, the effective dateCompany will transmit an Offer to Purchase and a Transmittal Letter to all holders of the stock split will depend on a variety of factors, including the Company’s operating results.

Appeal to a Broader Range of Investors to Generate Greater Investor Interest in the Company.

An increase in the Company’s stock price may make its common stock more attractive to investors. Brokerage firms may be reluctant to recommend lower-priced securities to their clients. Many institutional investors have policies prohibiting them from holding lower-priced stocks in their portfolios, which reduces the number of potential purchasers of our common stock. Investment funds may also be reluctant to invest in lower-priced stocks. Investors may also be dissuaded from purchasing lower-priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks. Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower-priced stocks. The Board believes that the Reverse Stock Split would assist the Company in addressing these issues.

Certain Risks Associated with the Reverse Stock Split

Even if the Reverse Stock Split is effected, some or all of the expected benefits discussed above may not be realized or maintained. The market price of the Company’s common stock will continue to be based, in part, on the Company’s performance and other factors unrelated to the number of shares outstanding.

The Reverse Stock Split will reduce the number of outstanding shares of the Company’s common stock without reducing the number of shares of available but unissued common stock, which will also have the effect of increasing the number of authorized but unissued shares. The issuance of additional shares of the Company’s common stock may have a dilutive effect on the ownership of existing shareholders.

Principal Effects of the Reverse Stock Split

If the shareholders approve the Reverse Stock Split, the issued and outstanding shares of common stock would combined at a rate of one (1) share of common stock for every four (4) shares of common stock currently outstanding. The Reverse Stock Split would be effected simultaneously for all of the common stock, and the exchange ratio would be the same for all shares of common stock. The Reverse

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Stock Split would affect all shareholders uniformly and would not affect any shareholder’s percentage ownership interests in the Company.

The Reverse Stock Split would not affect the relative voting or other rights that accompany the shares of our common stock. common stock issuedTrust Preferred Securities pursuant to the Reverse Stock Split would remain fully paid and non-assessable. The Reverse Stock Split would not affect the Company’s securities law reporting and disclosure obligations, and the Company would continueRegulation 14E promulgated pursuant to be subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board has no current plansexchange offer will be held open for at least 20 business days, subject to takeextension. Any extension will be announced by press release the day after the scheduled expiration.

At the expiration of the exchange offer, the Company private. Accordingly,will determine the Reverse Stock Split is not relatedapplicable per share price of the common stock to a strategy to do so.

In additionbe issued (the lower of $3.00 or the closing market price of the common stock on the expiration date). The Company will then accept the tenders of Trust Preferred Securities with an aggregate value of up to the changelesser of $2,100,000 or the closing market price on the termination date of the exchange offer multiplied by 700,000, provided that in no event will the number ofCompany issue more than 700,000 shares of common stock outstanding,stock. In the Reverse Stock Split would haveevent the following effects:

Increase the Per Share Priceaggregate value of the Company’s Common Stock. By effectively condensing four pre-split shares into one shareTrust Preferred Securities that are tendered exceeds these limits, then the Company will accept a pro rata amount of common stock,Trust Preferred Securities from the tendering holders and return the excess Trust Preferred Securities. As a result, the per share price of the shares of common stock issued will be the same for each tendering holder.

Each tendering holder must represent to the Company that it would not be the beneficial owner of more than 9.9% of the common stock upon consummation of the exchange offer. No holder may tender any Trust Preferred Securities if acceptance of such tenders in full by the Company would result in such holder being the beneficial owner of more than 9.9% of the common stock.

All shares of common stock issuable pursuant to the exchange offer will constitute restricted securities for purposes of the Securities Act of 1933, as amended (the “Securities Act”). The Company will not provide any registration rights with regard to such shares of common stock. Any shares of common stock issued in the exchange offer will be issued in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act as a post-split sharetransaction by an issuer not involving a public offering.

Nasdaq Marketplace Rule 5635(d)

The Company’s common stock is generally greatercurrently listed on The Nasdaq Capital Market and, as such, we are subject to Nasdaq Marketplace Rules.

Nasdaq Marketplace Rule 5635(d) (“Rule 5635(d)”) requires the Company to obtain shareholder approval prior to the issuance of its common stock in connection with certain non-public offerings. Rule 5635(d) applies when:

● the offering involves the sale, issuance or potential issuance by the Company of common stock equal to 20% or more of the common stock outstanding before the issuance; and

● the offering price is less than the per share price of a pre-split share. The amount of the initial increase in per share price and the duration of such increase, however, is uncertain.current market price.

Increase in the Number of Shares of Common Stock Available for Future Issuance. By reducing

Rule 5635(d) will apply because the number of shares outstanding without reducingthat could be issued in the numberexchange offer will exceed the 20% threshold and the offering price may be less than the current market price. As a result, the Company is required to obtain shareholder approval of sharesthe offering.

Potential Effect of available but unissuedExchange Offer

If the exchange offer is approved by the shareholders, the Company would commence the exchange offer within 120 days after the annual meeting of shareholders. The exchange offer would be made to the then current holders of the Trust Preferred Securities.

The price for the common stock to be offered in the Reverse Stock Split will increaseexchange offer would be equal to the numberlesser of authorized but unissued shares.(i) $3.00 per share, or (ii) the closing market price on the termination date. The Board believesclosing market price of the increase is necessarycommon stock on March 31, 2021, was $3.87 per share. Assuming that the market price does not change during the term of the exchange offer, then the price for the common stock would be $3.00 per share.

The potential effects of the exchange offer would be as follows:

Interest of Certain Directors and Director Nominee in orderthe Exchange Offer

Currently, all 2,068 of the outstanding Trust Preferred Securities are owned by Preferred Shares, LLC, an affiliate of Mr. Gubin, a Director of the Company.

Preferred Shares, LLC has indicated that it expects to provide the Company with the abilitysell 847.1 Trust Preferred Securities to raise additional funds to meetan affiliate of Mr. Chan, one of the Company’s capital requirements.

The following table contains approximate information relatingdirectors, in exchange for $1,200,102, to sell 622.7 Trust Preferred Securities to an affiliate of Mr. Blisko, one of the Company’s common stock, based on share information asnominees for director, in exchange for $788,690 and to sell the remaining 598.9 Trust Preferred Securities to three non-affiliated third parties in exchange for $758.651. Each of March 15, 2013:the proposed purchasers is an accredited investor with whom Mr. Gubin had a substantive pre-existing business or personal relationship.

Although the Reverse Stock Split would not have any dilutive effect on the Company’s shareholders, the Reverse Stock Split without a reductionIf each of these persons elect to participate in the number of shares authorized for issuance would reduceexchange offer and assuming the proportion of shares owned by the Company’s shareholders relative to the number of shares authorized for issuance, giving the Company’s Board an effective increaseprice in the authorized shares available for issuance,exchange offer is $3.00 per share and all accrued interest is paid in its discretion. The Board from time to time may deem it to be incash, then the best interestsaffiliate of the Company and its shareholders to issueMr. Chan would receive 282,377 shares of the Company’s common stock, to raise capitalthe affiliate of Mr. Blisko would receive 207,550 shares and the three non-affiliated third parties would receive 199,645 shares.

Reasons for other purposes. If the Company’sExchange Offer

The Board authorizesbelieves that the issuanceexchange of additional shares subsequent to the Reverse Stock Split described above, the dilution to the ownership interest of the Company’s existing shareholders may be greater than would occur had the Reverse Stock Split not been effected.

Many stock issuances not involving equity compensation do not require shareholder approval, and the Company’s Board generally seeks approval of the Company’s shareholders in connection with a proposed issuance only if required at that time.

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Require Adjustment to Currently OutstandingTrust Preferred Securities Exercisable or Convertible into Shares of the Company’s Common Stock. The Reverse Stock Split would effect a reduction in the number of shares offor common stock issuable upon the exercise or conversion of the Company’s outstanding stock options in proportion to the Reverse Stock Split ratio. Additionally, the exercise price of outstanding options would increase, likewise in proportion to the reverse stock split ratio.

Require Adjustments to Number of Shares of Common Stock Available for Future Issuance under the Company’s Equity Incentive Plan.    In connection with any reverse split, the Company’s Board would also make a corresponding reduction in the number of shares available with respect to options granted under the Company’s Equity Incentive Plan so as to avoid the effect of increasing the value of options previously granted.

Authorized Shares of Common Stock. The Reverse Stock Split will not change the number of authorized shares of common stock but will increase the number of authorized shares available for future issuance from 18,488,799 shares to 42,122,200 shares. These additional shares would be available for corporate needs such as equity financing, retirement of outstanding indebtedness, stock splits and stock dividends, employee benefit plans, or other corporate purposes as may be deemed by the Board to be in the best interestsinterest of the Company and its shareholders. The Board believes that the increase in available shares for future issuance is appropriate to fund the future operationslong-term stability of the Company and to address its capital requirements. As a result, the Company’s current number of authorized shares of common stock may enable the Company to better meet its future business needs.

Procedure for Effecting Reverse Stock Split and Exchange of Stock Certificates

If the Reverse Stock Split is approved by the Company’s shareholders, the Company’s Board will promptly establish the record date for the Reverse Stock Split.

The Company would then file a certificate of amendment to the Company’s Articles of Incorporation with the Secretary of the State of Florida at such time as the Company’s Board of Directors had determined as the appropriate effective time for the Reverse Stock Split to effect the reverse split. The articles of amendment would add a new provision providing that holders of the Company’s common stock immediately prior to the filing of the amendment will receive one share of common stock for each four shares helddepends on the record date selected by the Board. A copy of the proposed amendment is attached to this proxy statement as Exhibit B and is considered a part of this proxy statement.

For example, if a shareholder presently holds 100 shares of the Company’s common stock, he or she would hold 25 shares of common stock following the Reverse Stock Split.

Beginning on the effective date of the split, each certificate representing pre-split shares would be deemed for all corporate purposes to evidence ownership of post-split shares.

As soon as practicable after the effective date of the Reverse Stock Split, shareholders would be notified that the reverse stock split had been effected.

Effect on Beneficial Holders (i.e., Shareholders Who Hold in “Street Name”)

Upon the Reverse Stock Split, we intend to treat common stock held by shareholders in “street name,” through a bank, broker or other nominee, in the same manner as shareholders whose shares are registered in their own names. Banks, brokers or other nominees will be instructed to effect the Reverse Stock Split for their customers holding common stock in “street name.”

However, these banks, brokers or other nominees may have different procedures than registered shareholders for processing the Reverse Stock Split. If you hold shares of common stock with a bank,

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broker or other nominee and have any questions in this regard, you are encouraged to contact your bank, broker or other nominee.

Effect on Registered “Book-Entry” Holders (i.e., Shareholders That are Registered on the Transfer Agent’s Books and Records but do not Hold Certificates)

Some of the Company’s registered holders of common stock may hold some or all of their shares electronically in book-entry form with the Company’s transfer agent, Continental Stock Transfer. These shareholders do not have stock certificates evidencing their ownership of common stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts. If a shareholder holds registered shares in book-entry form with the Company’s transfer agent, no action needs to be taken to receive post reverse stock split shares. If a shareholder is entitled to post-Reverse Stock Split shares, a transaction statement will automatically be sent to the shareholder’s address of record indicating the number of shares of common stock held following the Reverse Stock Split.

Effect on Certificated Shares

Upon the Reverse Stock Split, the Company’s transfer agent will act as the Company’s exchange agent and assist holders of common stock in implementing the exchange of their certificates.

Commencing on the effective date of the Reverse Stock Split, shareholders holding shares in certificated form will be sent a transmittal letter by the Company’s transfer agent. The letter of transmittal will contain instructions on how a shareholder should surrender his or her certificates representing common stock (“Old Certificates”) to the transfer agent in exchange for certificates representing the appropriate number of whole post-Reverse Stock Split common stock, as applicable (“New Certificates”). No New Certificates will be issued to a shareholder until that shareholder has surrendered all Old Certificates, together with a properly completed and executed letter of transmittal, to the transfer agent. No shareholder will be required to pay a transfer or other fee to exchange Old Certificates. The letter of transmittal will contain instructions on how you may obtain New Certificates if your Old Certificates have been lost. If you have lost your certificates, you will have to pay any surety premium and the service fee required by the Company’s transfer agent.

Until surrendered, we will deem outstanding Old Certificates held by shareholders to be canceled and only to represent the number of whole shares to which these shareholders are entitled.

Any Old Certificates submitted for exchange, whether because of a sale, transfer or other disposition of shares, will automatically be exchanged for New Certificates.

Shareholders should not destroy any stock certificates and should not submit any certificates until requested to do so by the transfer agent. Shortly after the Reverse Stock Split the transfer agent will provide registered shareholders with instructions and a letter of transmittal for converting Old Certificates into New Certificates. Shareholders are encouraged to promptly surrender Old Certificates to the transfer agent (acting as exchange agent in connection with the reverse stock split) in order to avoid having shares become subject to escheat laws.

Fractional Shares

No fractional shares of Common Stock shall be issued in connection with the Reverse Stock Split. Rather, fractional shares created as a result of the Reverse Stock Split shall be rounded up to the next largest whole number, such that, in lieu of fractional shares, each shareholder who otherwise would be entitled to receive fractional shares of Common Stock as a result of the Reverse Stock Split shall instead be entitled to receive the next largest whole number of shares of Common Stock.

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Accounting Matters

The par value of the Company’s common stock would remain unchanged at $0.01 per share, if the Reverse Stock Split is effected.

The Company’s shareholders’ equity in its consolidated balance sheet would not change in total. However, the Company’s stated capital (i.e., $0.01 par value times the number of shares issued and outstanding), would be proportionately reduced based on the reduction in shares of common stock outstanding. Additional paid in capital would be increased by an equal amount, which would result in no overall change to the balance of shareholders’ equity.

Additionally, net income or loss per share for all periods would increase proportionately as a result of the Reverse Stock Split since there would be a lower number of shares outstanding. We do not anticipate that any other material accounting consequences would arise as a result of the Reverse Stock Split.

Potential Anti-Takeover Effect

Even though the potential Reverse Stock Split would result in an increased proportion of unissued authorized shares to issued shares, which could, under certain circumstances, have an anti-takeover effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction for the combination of us with another company), the Reverse Stock Split is not being proposed in response to any effort of which we are aware to accumulate shares of the Company’s common stock or obtain control of us, nor is it part of a plan by management to recommend a series of similar amendments to the Company’s Board and the Company’s shareholders.

No Appraisal Rights

The Company’s shareholders are not entitled to appraisal rights with respect to the Reverse Stock Split, and the Company will not independently provide shareholders with any such right.

Federal Income Tax Consequences of the Reverse Stock Split

The following discussion is a summary of certain U.S. federal income tax consequences of the Reverse Stock Split to the Company and to shareholders that hold shares of common stock as capital assets for U.S. federal income tax purposes. This discussion is based upon provisions of the U.S. Internal Revenue Code of 1986, as amended (the “Code��), the Treasury regulations promulgated under the Code, and U.S. administrative rulings and court decisions, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect, and differing interpretations. Changes in these authorities may cause the U.S. federal income tax consequences of the Reverse Stock Split to vary substantially from the consequences summarized below.

This summary does not address all aspects of U.S. federal income taxation that may be relevant to shareholders in light of their particular circumstances or to shareholders who may be subject to special tax treatment under the Code, including, without limitation, dealers in securities, commodities or foreign currency, persons who are treated as non-U.S. persons for U.S. federal income tax purposes, certain former citizens or long-term residents of the United States, insurance companies, tax-exempt organizations, banks, financial institutions, small business investment companies, regulated investment companies, real estate investment trusts, retirement plans, persons that are partnerships or other pass-through entities for U.S. federal income tax purposes, persons whose functional currency is not the U.S. dollar, traders that mark-to-market their securities, persons subject to the alternative minimum tax, persons who hold their shares of common stock as part of a hedge, straddle, conversion or other risk reduction transaction, or who acquired their shares of common stock pursuant to the exercise of

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compensatory stock options, the vesting of previously restricted shares of stock or otherwise as compensation. If a partnership or other entity classified as a partnership for U.S. federal income tax purposes holds shares of common stock, the tax treatment of a partner thereof will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding shares of the Company’s common stock, you should consult your tax advisor regarding the tax consequences of the Reverse Stock Split.

The Company has not sought and will not seek an opinion of counsel or a ruling from the Internal Revenue Service (“IRS”) regarding the federal income tax consequences of the Reverse Stock Split. The state and local tax consequences of the reverse split may vary as to each shareholder, depending on the jurisdiction in which such shareholder resides. This discussion should not be considered as tax or investment advice, and the tax consequences of the Reverse Stock Split may not be the same for all shareholders. Shareholders should consult their own tax advisors to know their individual federal, state, local and foreign tax consequences.

Tax Consequences to the Company.  The Company believes that the Reverse Stock Split will constitute a reorganization under Section 368(a)(1)(E) of the Internal Revenue Code. Accordingly, the Company should not recognize taxable income, gain or loss in connection with the Reverse Stock Split. In addition, we do not expect the Reverse Stock Split to affect the Company’s ability to utilizeeliminate the Trust Preferred Securities through a combination of share exchanges and payments.

As noted above, the exchange offer will also result in an increase in the Company’s net operating loss carryforwards.

Tax Consequences to Shareholders.  Shareholders should not recognize any gain or loss for U.S. federal income tax purposes as a resultstockholders’ equity based on the value of the Reverse Stock Split. Each shareholder’s aggregate tax basisTrust Preferred Securities acquired by the Company in the exchange.

In considering this matter, the Board has also concluded that it would be necessary to offer the common stock receivedat a discount to its market price in order to induce the holders of the Trust Preferred Securities to participate in the Reverse Stock Split, should equal the shareholder’s aggregate tax basis inexchange. Assuming that the common stock exchangedwill be offered at $3.00 per share, the current discount would be approximately 22.5% from the closing market price of $3.87 per share as of March 31, 2021. The Board also noted that the price of $3.00 per share was 24.5% greater that the book value per commons share of $2.45 per share on December 31, 2020.

The Board was aware that Moishe Gubin, a director of the Company, had a conflict of interest with respect to this matter in light of his ownership of the current holder of the Trust Preferred Securities, and that Mr. Chan had a conflict of interest in light of his prospective purchase of the Trust Preferred Securities and participation in the Reverse Stock Split. In addition,exchange offer. To address these issues, each shareholder’s holding period for the common stock it receives in the Reverse Stock Split should include the shareholder’s holding period for the common stock exchanged in the Reverse Stock Split.of them abstained from voting on this matter.

Interests of Directors and Executive Officers

The Company’s directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this Reverse Stock Split except to the extent of their ownership of shares of the Company’s common stock. The approval of the Reverse Stock Split will not affect the proposed sale of shares to Moishe Gubin because the Company has a sufficient number of authorized shares to complete this transaction regardless of whether the Reverse Stock Split is approved.

Vote Required; Recommendation of Company Board of DirectorsRequired

Assuming the existence of a quorum, the affirmative vote of the majority of the votes cast for this proposal will be approved if the number of shares voted in favor ofis required to approve this Proposal No. 3 exceeds the number of shares voted against the proposal. As such, abstentions and broker non-votes will not affect the outcome of the vote, but will be counted for determining the existence of a quorum.matter.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” PROPOSAL NO.APPROVAL OF THE ISSUANCE OF UP TO 700,000 SHARES OF COMMON STOCK IN EXCHANGE FOR TRUST PREFERRED SECURITIES ISSUED BY OPTIMUMBANK CAPITAL TRUST I IN ACCORDANCE WITH NASDAQ MARKETPLACE RULE 5635(D).

proposal no. 3 TO APPROVE THE 4 FOR 1 REVERSE STOCK SPLIT.

20APPROVAL OF THE PARTICIPATION OF CERTAIN DIRECTORS OF THE COMPANY IN THE EXCHANGE OFFER FOR THE TRUST PREFERRED SECURITIES DESCRIBED IN PROPOSAL 2

The Company is seeking approval of a proposal to authorize affiliates of Mr. Gubin and Mr. Chan, directors of the Company, and an affiliate of Mr. Blisko, a director nominee, to participate in the exchange offer for the Trust Preferred Securities described in Proposal 2.

The participation of an affiliate of a director of the Company in the Trust Preferred Securities exchange requires the approval of the Company’s shareholders under Nasdaq Marketplace Rule 5635(c).

Nasdaq Marketplace Rule 5635(c) (“Rule 5635(c)”) requires shareholder approval of any issuance of the Company’s common stock to the Company’s officers, directors and employees at a price that is less than fair market value. Under Rule 5635(c), the issuance of common stock at a price less than the market value of the common stock is considered a form of “equity compensation.”

As discussed in Proposal 2 above, the Company is seeking shareholder approval of a proposal to issue to up to 700,000 shares of the Company’s common stock in exchange for Trust Preferred Securities issued by OptimumBank Capital Trust I.

At the present time, the owner of the Trust Preferred Securities is Preferred Shares, LLC, an affiliate of Mr. Gubin, who is a director of the Company.

Preferred Shares, LLC has indicated that it expects to sell 847.1 Trust Preferred Securities to an affiliate of Mr. Chan, one of the Company’s directors, in exchange for $1,200,102, to sell 622.7 Trust Preferred Securities to an affiliate of Mr. Blisko, one of the nominees for director, in exchange for $788,690 and to sell the remaining 598.9 Trust Preferred Securities to three non-affiliated third parties in exchange for $758.651. Each of the proposed purchasers is an accredited investor with whom Mr. Gubin had a substantive pre-existing business or personal relationship.

If each of these persons elect to participate in the exchange offer and assuming the price in the exchange offer is $3.00 per share and all accrued interest is paid in cash, then the affiliate of Mr. Chan would receive 282,377 shares of the Company’s common stock, the affiliate of Mr. Blisko would receive 207,550 shares and the three non-affiliated third parties would receive 199,645 shares.

As a result, any exchange of the Trust Preferred Securities held by Preferred Shares, LLC would be subject to the requirements of Rule 5635(c).

The Company is requesting its shareholders to approve the participation of Preferred Shares, LLC and the affiliates of Mr. Chan and Mr. Blisko in the exchange.

As discussed in Proposal 2, the Board believes that the exchange of additional Trust Preferred Securities for common stock would be in the best interest of the Company and its shareholders. The participation of Preferred Shares, LLC, and the affiliates of Mr. Chan and Mr. Blisko in the exchange would significantly enhance the Company’s ability to achieve the goals of the exchange offer.

As discussed in Proposal 2, the exchange offer may be made at a price that is less than the current market price. In considering this matter, the Board has concluded that it would be necessary to offer the common stock at a discount to its market price in order to induce the holders of the Trust Preferred Securities to participate in the exchange. Assuming that the common stock will be offered at $3.00 per share, the current discount would be approximately 22.5% from the closing market price of $3.87 per share as of March 31, 2021. Under Rule 5635(c), this discount is treated as a form of equity compensation that requires shareholder approval.

The other potential effects of the exchange offer are discussed in Proposal 2.

Interest of Directors in the Exchange Offer

Currently, all 2,068 of the outstanding Trust Preferred Securities are owned by Preferred Shares, LLC, an affiliate of Mr. Gubin, a Director of the Company.

Preferred Shares, LLC has indicated that it expects to sell 847.1 Trust Preferred Securities to an affiliate of Mr. Chan, one of the Company’s directors, in exchange for $1,200,102, to sell 622.7 Trust Preferred Securities to an affiliate of Mr. Blisko, one of the nominees for director, in exchange for $788,690 and to sell the remaining 598.9 Trust Preferred Securities to three non-affiliated third parties in exchange for $758.651. Each of the proposed purchasers is an accredited investor with whom Mr. Gubin had a substantive pre-existing business or personal relationship.

If each of these persons elect to participate in the exchange offer and assuming the price in the exchange offer is $3.00 per share and all accrued interest is paid in cash, then the affiliate of Mr. Chan would receive 282,377 shares of the Company’s common stock, the affiliate of Mr. Blisko would receive 207,550 shares and the three non-affiliated third parties would receive 199,645 shares.

Each of the proposed transferees is an accredited investor with whom Mr. Gubin had a substantive pre-existing business or personal relationship.

As described in Proposal 2, the Board was aware that Mr. Gubin and Mr. Chan, directors of the Company, had a conflict of interest with respect to this matter. To address these issues, both of them abstained from voting on this matter.

Vote Required for Approval

Assuming the existence of a quorum, the affirmative vote of the majority of the votes cast for this proposal is required to approve this matter. Approval of this Proposal 3 is subject to the approval of Proposal 2.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE PARTICIPATION OF CERTAIN DIRECTORS OF THE COMPANY IN THE EXCHANGE OFFER FOR THE TRUST PREFERRED SECURITIES DESCRIBED IN IN PROPOSAL 2.

PROPOSAL NO. 4

RATIFICATION OF INDEPENDENT AUDITOR

The Audit Committee has selected Hacker, Johnson & Smith, PAP.A. (“Hacker Johnson”Johnson”) as the Company’s independent auditor for fiscal year 2013,2021, and the Board asks shareholders to ratify that selection. Although current law, rules, and regulations, as well as the charter of the Audit Committee, require the Audit Committee to engage, retain, and oversee the Company’s independent auditor, the Board considers the selection of the independent auditor to be an important matter of shareholder concern and is submitting the selection of Hacker Johnson for ratification by shareholders as a matter of good corporate practice.governance.

The

Assuming the existence of a quorum, the affirmative vote of holders of athe majority of the shares of common stock castrepresented in person or by proxy and entitled to vote at the meeting is required to approve the ratification of the selection of Hacker Johnson as the Company’s independent auditor for the current fiscal year.this matter.

The Board of Directors recommends a vote

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF HACKER, JOHNSON & SMITH, P.A. AS THE COMPANY’S INDEPENDENT AUDITOR FOR the proposal.FISCAL YEAR 2021.

AUDIT COMMITTEE REPORT

The Audit Committee has reviewed and discussed the audited financial statements of the Company for the fiscal year ended December 31, 20122020 with the Company’s management and has discussed with the independent auditors, Hacker, Johnson & Smith, PA,P.A., communications pursuant to applicable auditing standards. In addition, Hacker, Johnson & Smith, PAP.A. has provided the Audit Committee with the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent auditor’s communications with the audit committeeAudit Committee concerning independence, and the Audit Committee has discussed with Hacker, Johnson & Smith, PA,P.A., the independent auditor’s independence.

Based on these reviews and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20122020 and selected Hacker, Johnson & Smith, PAP.A. as the Company’s independent auditor for 2013.

AUDIT COMMITTEE

Joel Klein, Chair

Seth Gillman

Moishe Gubin