RNS Number:5949U
Weatherly International PLC
23 January 2004
Weatherly international PLC
Report and financial statements
YEAR ENDED 31 DECEMBER 2002
(Extract)
Chairman's statement
Since my last Chairman's Statement, on 26 June 2002, shareholders will already
be aware that the trading position of your Company deteriorated further to the
point where it was necessary to cease trading operations and to put the
Company's trading subsidiary, Weatherly Securities Corporation ("WSC"), into
subsequent 'compensatory liquidation' which was petitioned for by the US
regulator, NASD. At one point, it looked also as if the liquidation of the
Company was the only viable option In view of the liquidation of WSC, it was not
considered relevant to include its results in the group results for the period
under review.
Results for the Year ended 31 December 2002
The period to 31 December 2002 was one of exceptional difficulty when the
combined effect of arbitration complaints, most of which arose in the previous
trading period, and the continuing downturn in client activity in securities
markets led to a decision to cease trading operations in August 2002. By this
date, WSC had incurred further significant losses but the Company has not
produced consolidated financial statements for the period due to the liquidation
of this subsidiary as set out above.
For the year ended 31 December 2002, the Company therefore reported nil turnover
(2001: #12,573,345) and a loss of #1,581,437 (2001: #3,319,899) which included
exceptional items of #1,490,148 relating to the writing off in full both of its
investment in, and an inter-company debtor owed by, WSC.
Post balance sheet events
The effect of the compensatory liquidation of WSC was to limit the liability of
the Company as complainants against WSC were thereby prevented from further
action against the Company. This made it possible to seek ways forward for the
Company and thus at least save a modicum of value for shareholders, as well as
enabling a greater recovery for creditors than would have been possible in a
liquidation.
The Company was approached by a group of investors who indicated that, provided
the Company could be protected from any further claims, they were prepared to
inject or raise #250,000 of new equity capital and enable the Company to seek a
recovery in its fortunes by way of a reverse take-over.
Consequently, the Company announced on 2 June 2003 that it would maintain its
trading facility on AiM, which your directors had previously resolved to cancel.
However, the Company's lack of resources prevented it from completing and
publishing its accounts for the year ended 31 December 2002 within the required
timetable and the Company's trading facility on AiM was therefore suspended on 1
July 2003.
In order to provide the Company with further protection against claims arising
either in the US or the UK, it was considered advisable to put the Company
through a company voluntary arrangement ('CVA'). The costs of the CVA and of
the audit for the year to 31 December 2002, as well as certain other costs, have
been underwritten by certain members of the investor group referred to above.
Shareholders were sent details of the proposed CVA and proposals for refinancing
the Company on 23 December 2003. The background to and details of these
proposals were described in detail in these two documents. The refinancing
proposals for the Company included a capital reconstruction, further details of
which will be found in the Directors Report on page 5 below. At a meeting of
creditors and an extraordinary general meeting of shareholders held earlier
today, these proposals were approved and, at a subsequent board meeting of the
Company the issue of 8,333,334 new ordinary shares in the Company to raise
#250,000 (before expenses) by way of a placing at 3p per share subject to their
admission to trading on AiM was also approved.
Following the publication of the accounts to 31 December 2002, it is expected
that the trading facility on AiM will be restored and the Company will begin to
seek opportunities to restore value to its shares.
By 31 December 2002, in view of the liquidation of WSC then in hand, the Company
was in effect insolvent and able only to continue by virtue of the forbearance
of its creditors.
Board Changes
Immediately following the approval of these accounts for the year ended 31
December 2002 and the interim accounts for the six months ended 30 June 2003
which are also being published today, I and my board colleagues, William
Odenthal and Fred Buglione, will resign with immediate effect. At the EGM to
approve the refinancing proposals, the appointment of two new directors, Peter
Redmond, who will become Chairman, and Richard Armstrong, was approved. As set
out in the circular describing the refinancing proposals, both Mr Redmond and Mr
Armstrong have many years' experience in assisting companies to raise capital
and in acquiring new businesses.
In retiring from the Board, I wish the Company every success in re-establishing
itself after the difficult period it has experienced.
Jack Najarian
Chairman
23 January 2004
Directors' report
For the year ended 31 December 2002
(Extract)
Important events since the balance sheet date
At an Extraordinary General Meeting held on 23rd January 2004, creditors and
shareholders approved a proposal for a Company Voluntary Arrangement under the
terms of which it is estimated that all unsecured creditors will be paid
approximately 66p in the # in the event of successful implementation of the
arrangement.
At the same meeting, shareholders also approved a capital reorganisation of the
Company's share capital under the terms of which:
* the Existing Ordinary Shares of 0.1p each were sub-divided into 1 ordinary
share of 0.001p and 1 deferred share of 0.099p
* the issued ordinary shares then of 0.001p were consolidated into New
Consolidated Ordinary Shares of 0.5p each (on the basis that 500 ordinary
shares were consolidated into 1 New Consolidated Ordinary Share)
* the 259,250,000 Existing Ordinary Shares of 0.1p each that were then
authorised but unissued were consolidated into 51,850,000 New Consolidated
Ordinary Shares of 0.5p each
On the same date, the Company announced a conditional placing of 8,333,334 New
Consolidated Ordinary Shares at a price of 3p per share, raising #250,000 for
the Company before costs, such placing being conditional upon the admission of
the new shares to trading on AiM.
As part of the proposals approved by shareholders on 23rd January 2004, the
Directors have agreed to make a grant of an option over 166,667 New Consolidated
Ordinary Shares to Mr Jack Najarian in lieu of director's compensation since the
end of the last financial year and an option over a total of 250,000 New
Consolidated Ordinary Shares to Seymour Pierce Limited and Seymour Pierce Ellis
Limited in consideration for them agreeing to waive professional fees amounting
to approximately #34,000. The conditions attaching to the options are that they
are exercisable at any time up to 23 January 2007 at a price of 3p per share.
The options will lapse in the event they are not exercised on or before 23
January 2007.
Auditors
Ian Pratt & Co were appointed as auditors during the year and have expressed
their willingness to continue in office. A resolution to reappoint them will be
proposed at the annual general meeting.
On behalf of the Board
J G Najarian
Chairman
23 January 2004
PROFT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2002
Year ended Year ended
31 Dec 2002 31 Dec 2001
Note # #
Turnover - discontinued operations - 12,573,435
Direct costs - (8,570,670)
_________ _________
Gross profit - 4,002,765
Administrative expenses:
- excluding exceptional items (92,392) (5,294,862)
- exceptional items 5 (1,490,148) (2,071,873)
_________ _________
Total administrative expenses (1,582,540) (7,366,735)
_________ _________
Operating loss - discontinued operations 6 (1,582,540) (3,363,970)
Interest receivable 1,103 28,666
_________ _________
loss on ordinary activities before taxation (1,581,437) (3,335,304)
Taxation 7 - 15,405
_________ _________
Retained loss for the year (1,581,437) (3,319,899)
_________ _________
Basic and diluted loss per share (p) 9 (0.75) (1.84)
_________ _________
Adjusted basic and diluted loss per share (p) 9 (0.04) (0.69)
_________ _________
Note:
(a) All amounts relate to discontinued activities.
(b) Figures for the year ended 31 December 2002 are for the Company whereas
comparable figures are presented on a consolidated basis.
COMPANY BALANCE SHEET AT 31 DECEMBER 2002
2002 2001
Note # # # #
Fixed assets
Investments 10 - 1,139,930
Current assets
Debtors 11 31,951 52,051
Cash at bank and in hand 31,432 431,421
________ ________
63,383 483,472
Creditors: amounts falling due within
one year
13 (82,852) (121,434)
________ ________
Net current (liabilities)/assets (19,469) 362,038
________ ________
Total assets less current liabilities (19,469) 1,501,968
________ ________
Capital and reserves
Called up share capital 14 240,750 185,769
Share premium account 15 4,572,706 4,700,297
Profit and loss account 15 (4,832,925) (3,384,098)
________ ________
Shareholders' funds - equity (19,469) 1,501,968
________ ________
J G Najarian
Chairman
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FGGZMKFLGDZM