At the Special General Meeting of Shareholders held this morning in which 27 shareholders representing over 70% of the shares outstanding were present or represented by proxy.
Shareholders were advised that the Company had suffered losses in the past two years ending June 30, 1996 and for the half year to date amounting to almost $900,000 and that the Company had obligations to creditors of some $650,000 over and above its indebtedness to Regina Via Limited which owns one of the buildings in which it a tenant and bank indebtedness of some $900,000 which is secured by a guarantee given by Regina Via with the deposit of Regina Via's title deeds as security. Had it not been for Lines Overseas Management's agreement to underwrite the share issue and to advance $100,000 by way of loan pending agreement with respect to the rights issue, the Company would be unable to meet its obligations and would have had insufficient funds with which to meet its payroll last Friday.
The newly elected Chairman, Mr. Donald Lines, introduced the new members of the Board who were elected at a Board Meeting to fill vacancies as a result of resignations which were tendered at a Board Meeting yesterday, namely Mr. William D. Thomson and Mrs Susan D. Wilson. It was also noted that Mr. Crayton Greene had been appointed President at that same Board Meeting, replacing Ian Paton, who stepped down from that position.
The reconstituted Board now consists of the following individuals:
Donald Lines - Chairman
Crayton L. Greene - President
William D. Thomson
Susan D. Wilson
Ian Paton
Richard S. L. Pearman
E. Llewellyn Petty
The Board also agreed to appoint an Executive Committee consisting of four members of the Board to assume responsibility for the day-to-day management, accounting, finance, daily reporting, personnel management and development of policies for approval by the board.
The Directors also agreed at the Board Meeting yesterday to change the year end of the Company to January 31 so that future reporting of earnings would not be distorted by losses which had been incurred to date.
It was further noted at the Board Meeting there would likely be a further General Meeting of Shareholders at an early date in the future once the rights issue had been completed to approve arrangements under which the executive Committee would be granted an option to subscribe for 50,000 shares at a price of $3.00 per share for a period of five years in lieu of directors fees and any other remuneration.
The Chairman noted that steps are being taken to re-negotiate the terms of the Company's leases with Regina Via Limited, The Camera Store and T. J. Pearman & Son Limited with a view to amending the terms and where possible the rate of rentals payable in recognition of the precarious financial state of the company and the changes in the real estate market giving due recognition to the current level of rentals applicable to retail space in the local market.
Finally, the chairman noted, assuming shareholders all agreed with the proposed amendments to the Bye-Laws and the other proposals which will be dealt with at a later meeting, and the Company's suppliers and landlords are willing to make some concessions with respect to the Company's obligations to them, he had every confidence in the Company's ability to return to profitability.
It was unanimously agreed by all shareholders present and those represented by proxy:
1. That the Company would make an offer to its shareholders of one new share for every share presently owned at a price of $3.00 per share to raise approximately $900,000 in new capital. Rights to subscribe for these shares would be underwritten by Lines Overseas Management Limited at a fee of 8% of the proceeds of the issue generally in accordance with the terms set out in the Letter of Agreement addressed to the Board of the Company by LOM.
2. That the authorized share capital of the Company should be increased from 475,000 shares of a par value of $1.00 each to 1,000,000 shares of par value $1.00 each;
3. That the size of the Board of Directors be increased by 6 members or such lesser number as may be necessary in all the circumstances to meet the Company's obligations under the agreement with LOM.
4. That the Bye-Laws of the Company be and they are hereby altered as follows:
(a) by the amendment of Bye-Law 8(1) so that it shall hereafter read as follows:
"The quorum necessary for the transaction of business at a meeting of the Directors shall be four."
(b) That Bye-Law 41 relating to the transferability of shares be deleted in its entirety to meet requirements for listing on the Stock Exchange;
(c) That Bye-Law 45 be amended as follows:
"Any person becoming entitled to a share in consequence of the death or bankruptcy of any Member may be registered as a Member upon such evidence as the Directors may deem sufficient or may, instead of being registered himself, elect to have some person named by him registered as a transferee of such share, and in such case the person becoming entitled shall execute to his nominee an instrument of transfer in the form or as near thereto as circumstances admit of Form "B" in the Schedule hereto; and on the presentation thereof to the Directors, accompanied by such evidence as they may require to prove the title of the transferor, the transferee shall be registered as a Member."