Final Results
Legacy Distribution Group Inc
05 June 2006
Legacy Distribution Group Inc.
MAIDEN PRELIMINARY RESULTS SHOW SOLID MARGIN GROWTH
Legacy Distribution Group Inc. ('Legacy' or 'the Company') (AIM: LDG), the
Arizona based distributor of tobacco, cigarettes, candy and grocery products,
announces preliminary results for the 12 months ended 31 December 2005. The
results, which are in line with expectations, show good progress and the initial
benefits from the Company's focus on introducing higher margin grocery products
and on penetrating the convenience store segment of the retail market. These
results show the Company's first full year of trading for the 12 months ended 31
December 2005 compared to the 5 months from 31 July to 31 December 2004.
Highlights of the results include:
Financial Highlights (these highlights are compared on a pro forma annualised
basis):
• Sales rose 13.3% to $64.6 million (2004: $57.0 million)
• Gross profit grew 20.6% to $3.546 million (2004: $2.941 million)
• Net assets increased 15.3% to $7.317 million (2004: $6.344 million),
primarily resulting from increased receivables due to sales growth and
investment in fixed assets, but offset by lower inventory levels
• Gross margin percentage improved to 5.5% (2004: 5.2%)
• One off exceptional costs associated with the AIM admission ($0.502
million), prudently setting up a bad debt provision ($0.250 million)
and increased overheads ($0.130 million) to allow for expansion,
resulted in an expected operating loss of $586,190 (2004: Profit
$464,612).
Operational Highlights:
• Higher margin grocery products introduced in June 2005
• Investment in a new high velocity warehouse and new delivery fleet
to support growth strategy
• Inventory management improved with 35.9 turns in 2005 (2004: 26.1
turns)
• Prudent management of cash flow
• Significant contract won to provide cigarettes exclusively to all of
Albertsons' (one of the largest retail food and drug chains in the
world) Arizona stores.
Post period events:
• Successful admission of the Company's shares to the AIM market of
the London Stock Exchange in March 2006
• Albertsons contract extended in May 2006 to include all tobacco
products
• Contract won in April 2006 with QDN Corporation, a US national
wholesale distribution service provider which supplies retailers
across the United States, to serve as the sole supplier to 200 new
retail locations
Commenting on the results, Michael Mills, Chairman said: 'This has been a
period of significant change for Legacy and we believe the Company is now well
placed to grow. The increase in sales, combined with improvement in gross margin
percentage has justified our decision to add grocery lines to our product
offering and we believe the Company is now positioned to reap future benefit
from this strategy. Although the process of admission to AIM did inevitably
divert some management time away from the day-to-day running of the business, it
has provided us with a currency which we can use to make acquisitions and I look
forward to the future with confidence.'
For further information:
Frank Patton, Legacy Distribution Group Inc.: +1 602 344 6750
Richard Sunderland/Rachel Drysdale, Tavistock Communications: 020 7920 3150
Oliver Cairns/Romil Patel, Corporate Synergy: 020 7448 4400
Chairman's Statement
I am pleased to present my first report to shareholders since the Company made
the transition from a 50 year old privately owned family enterprise to a company
whose shares are traded on the AIM market of the London Stock Exchange. In
August 2004, the business of Best Candy & Tobacco Company Inc. was acquired by a
new management and consulting team led by Frank Patton. This team formulated a
new long-term expansion strategy and then started to prepare for raising finance
and a public listing. As part of this process, considerable changes were made
to the business including the acquisition of a new distribution facility and
generally preparing to become a public company under the new name Legacy
Distribution Group Inc. ('Legacy').
During 2005, the employees and management team of Legacy worked extremely hard
to build a foundation for profitable growth in the Arizona marketplace. I am
very pleased with their efforts to stay focused on servicing customers during a
period when the intensive activity surrounding the AIM admission increased their
workload. The process of admission to AIM took a little longer than anticipated,
which resulted in a slightly negative impact on trading in the latter part of
2005. This disruption continued into the first part of 2006, until the admission
to AIM was successfully concluded on 16 March 2006. Since that date, the Company
has successfully signed a number of new clients.
Financial Results
Sales for the 12 months to 31 December 2005 improved 13.3% to $64.6 million
(2004: $57.0 million), producing a gross profit increase of 20.6% to $3.546
(2004: $2.941). This represents 5.5% of sales, up from 5.2% over the same
period last year. This substantial improvement is directly attributable to the
decision to focus on higher margin grocery products and rationalising low margin
tobacco only customers. Until early 2005, the Company concentrated only on low
margin tobacco products and was seen as a speciality distribution company.
Under Legacy's new management team, the strategy is to add higher margin grocery
products for distribution to its existing retail customers and acquire new
convenience store customers, thereby generating higher returns from the same
resources.
One-off exceptional costs, including $502,000 associated with the admission to
AIM and $250,000 to prudently set up a bad debt provision, combined with a
$130,000 increase in overhead to allow for expansion resulted in an operating
loss of $586,190, (2004: Profit $464,612). This loss was in line with
management expectations.
Net assets increased to $7.32 million (2004: $6.344 million), reflecting the
sales growth seen in 2005. Of particular note is that, although receivables
grew in 2005, inventories were reduced by $371,339 (18%), with inventory turns
at 35.9 times versus 26.1 times in 2004. Inventory turns are a key performance
metric for the Company and must be a continual focus, so that the high sales
growth strategy does not require a large cash investment. The increase in net
assets was financed primarily through the use of the Company's revolving line of
credit but also by decreasing inventories and renegotiating the Company's
payments terms with some of the non-tobacco vendors.
Operational Review
Despite manufacturers imposing significant price increases to keep pace with
inflation in the United States, Legacy has been able to improve its margins.
Additionally, the number of adult smokers in the United States again remained
flat at 25% for 2005 but, given the population growth in Arizona, the Company
continues to see increases in its core tobacco business. The resulting margin
gains have been partially offset by increases in gasoline prices, which rose by
over 30% in 2005. The Company has not yet instituted a fuel surcharge to
customers in order to maintain a competitive advantage over Core-Mark and
McLane's, its two main competitors. Inflationary increases on operational
expenses and labour will inevitably have to be passed along to customers, but
the Company's strategy is to be a 'follower' versus a 'leader' in the area of
increasing customer pricing.
The extended time taken to complete the AIM admission resulted in the planned
cash injection being deferred by almost six months, leaving the Company unable
to sustain the rate of growth that was started in Q3 2005. The uncertainty of
this situation resulted in lower than planned trading levels and profits in the
second half of the year. The Company has now regained this momentum, but the
focus on cash flow will continue in order to foster profitable sales growth.
A milestone transaction was concluded in December, when, following a competitive
pitch, a distribution agreement was signed with Albertsons Incorporated, one of
the largest retail food and drug chains in the world, for the distribution of
cigarette products to all of its stores in Arizona, New Mexico and El Paso,
Texas. Historically, this contract has been worth around $20 million per annum
and we intend to use this opportunity to demonstrate our ability to Albertsons
with a view to selling through higher margin products in the future. This
contract has already been extended when in May 2006, we won a further mandate
from Albertsons to supply it with all of its other tobacco related products in
the same stores.
Outlook
We are benefiting from the addition of grocery products to the Company's product
mix and the focus on growing our share of the convenience store market alongside
our traditional customer base. Legacy's business has a 50 year reputation in
the market place, built on reliability, in-store sales support and 48 hour
delivery windows which is now enabling us to win market share away from our
competitors. The recent investments in the new high velocity warehouse and new
delivery equipment will support the Company's growth targets by improving
operational efficiencies and enabling new products to be added to the product
portfolio. These will take time to find their place in the market, but initial
progress is promising.
Highly volatile fuel prices experienced towards the end of last year have
continued. They remain unpredictable and we are taking the necessary steps to
contain costs throughout the business. As we replace our delivery fleet through
its natural rotation, we are ensuring that vans with higher fuel economy are
added, whilst we investigate new technologies that will boost the fuel economy
of the existing fleet. The Company will continue to manage costs closely and
pass on increases as and when competitive conditions allow.
Summary
This is a highly satisfactory result, given that the new team and structure have
only been in operation for a short time. We will continue the emphasis on
growing sales in all areas whilst improving the sales mix in favour of higher
margin grocery products over lower margin tobacco items. We expect to acquire
more convenience store customers, which will also strengthen gross margins.
The margin improvement generated in 2005, while significant, was stifled by the
limitations imposed by the delay in the AIM listing. Now that this is complete,
the Company is better placed to deliver on not only its financial targets but
also to exploit any opportunities arising that will allow us to consolidate our
position in the market. Our strategic goal is to stay focused on the
convenience store segment for the foreseeable future, as it will provide Legacy
with greater possibilities for improved profitability.
Michael Mills, Chairman
5 June 2006
CHIEF EXECUTIVE'S REVIEW
Over the 12 month period the Company has undergone a period of transformation.
We are now a publicly quoted company and are in a position from which we can
grow. We are operating from modern facilities using new systems, which allow us
to both improve the quality of service we provide to our customers and improve
our own margins. There have been challenges throughout the year, ranging from
inflationary pressures in the US, increasing manufacturer pricing, heightened
borrowing costs due to unforeseen interest rate increases and rising fuel costs.
These are however, industry wide issues and are not specific to us and our
focus has been on ensuring that each element of our growth strategy is in the
best competitive position.
SALES
Legacy's focus in 2005 was to add grocery products as a core product category
and to use these products to grow market share in the convenience store sales
segment. Sales grew 13.3% during the 12 month period driven by Legacy's focus
on reliability, in-store sales representative support and delivery flexibility.
Our long-standing reputation for providing tobacco related products combined
with the addition of grocery products, has resulted in Legacy receiving
overwhelming interest and conversion of convenience store customers.
We strengthened our convenience store sales team with the addition of three
experienced sales representatives recruited from competitors due to Legacy's
focus on operational excellence and delivery flexibility. These additions are a
key element in our sales strategy, which is to provide in-store sales support,
designed to differentiate Legacy from its main competitors, create a barrier to
entry for new distributors and provide a significant disincentive for customer
losses. Additionally, the Company is currently rolling out new handheld sales
computers that will materially improve the efficiency and accuracy of the
product ordering process.
Sales growth during Q4 2005 was less than Q3 2005 due to cash limitations ahead
of the AIM admission, thereby impacting the growth of the convenience store
segment. During this period, the Company began to review and manage the
profitability of current customers with the intention of freeing up capital tied
up in tobacco only or unprofitable small drop customers that could be used to
help accelerate the growth of the convenience store segment.
OPERATIONS
Over the period, the Company's chief focus was the successful conclusion of the
admission to AIM and the investment that required. These investments were
critical to the long term success of the Company and despite a one-off impact on
profitability the benefits are already being seen in 2006.
ASSETS
In order to ensure that excess capital would not be needed to support the high
growth sales strategy, the Company focused on inventory management and developed
and implemented a more sophisticated purchasing model. Legacy now utilises
rolling sales demand to better forecast purchasing requirements while
considering manufacturer lead times and delivery minimums. This effect has
resulted in dramatically improving the Company's inventory turns. Additionally,
the Company renegotiated payment terms with some of its non-tobacco vendors to
better match the terms afforded to the other competitors in our market.
Receivables grew as a direct result of the sales growth in 2005 and the Company
will now focus on receivables management in order to limit the Company's
interest expense.
Considerable investment was made in property and equipment, due to the need to
replace aged delivery equipment and the costs associated with the Company's new
warehouse. When the Company was purchased in 2004, the age, quality and vehicle
types were not suited for the type of distribution that would be required in
2005 and beyond. Therefore, 25% of the fleet was replaced in 2005 with better
suited diesel based power plants. The move into the new warehouse resulted in
procuring high rise/high velocity racking along with more efficient material
handling equipment. These capital investments will support our current growth
targets for the foreseeable future.
PEOPLE
As well as strengthening the sales team, we have made a number of critical
operational appointments during the year. Gary Nelson's appointment as Senior
VP of Category Management on 1 May 2006 will help the Company tremendously. Gary
has over 20 years of retail grocery category management and purchasing
experience and is well know throughout the distribution industry. These
appointments are key as the Company does and will continue to use operational
excellence as a way of differentiating itself from its competition. The Company
is characterised by the enthusiasm and loyalty of long serving employees and it
gave me great pleasure during the year to recognise one employee with 25 years
of service, two 20 years and one with 10 years.
The success of the business is built on the hard work and commitment of each
person and I extend thanks to each of them for the achievements of the period.
PROSPECTS
The Company faces continued cost pressures during the upcoming period.
Specifically, fuel prices and inflationary cost increases for operational
expenditures such as employee benefits and labour wages. Historically, Legacy
has allowed the other competitors to drive the market in terms of how these
additional costs are passed along to customers. However, the Company's strategy
is one of customer acquisition and the unilateral price increases taken by the
Company's competitors will help drive our market share growth in 2006, without
large expenditures for marketing or incentive pricing.
As stated by the Chairman, the Company has successfully won a contract with
Albertsons to provide cigarette products to all of its stores in Arizona and New
Mexico and six stores in El Paso, Texas. This contract win is a large milestone
for the Company and has the potential to significantly increase annual revenues.
It also led to the Company securing a secondary agreement to provide these
same stores with other tobacco products such as cigars and bulk tobacco.
Another major contract win was to become the Southwest Member for Quality
Distribution Network ('QDN'). QDN is a $65 million dollar contracting
organisation that services large multi-state companies such as Host Marriott
Services, airport locations that provide snacks, cigarettes and sundries to air
travellers. QDN has awarded all of its Arizona business to the Company; this
contract has historically been worth around $4 million annually.
Since its admission to AIM, the Company has refocused on growing its market
share in this sales channel. As of this date, the Company has increased its
market share by one percentage point, which may not appear substantial but does
represent an incremental $2.5 million in annual revenue. The average gross
margin generated by a typical convenience store exceeds 10%.
We expect the barriers to entry in this industry to remain high as the tobacco
manufacturers are not granting new direct buying franchises and customers are
unwilling to try a distributor that has not been in the industry for a long
period of time.
I am therefore confident that we can continue to grow sales over the next 12
months and increase our market share in the convenience store segment by a
substantial amount. Our strengths are our reputation for operational
excellence, delivery flexibility and reliability, and the in-store sales
personnel to help our customers grow their business profitably. While the cost
pressure in the industry will be challenging, these attributes will enable the
Company to grow for the foreseeable future.
Frank Patton
Chief Executive Officer
5 June 2006
Legacy Distribution Group Inc
(Formerly Best Holdings Acquisition Company, LLC And Subsidiary)
Consolidated Statements of Income and Retained Earnings
For the Year Ended December 31, 2005 and
the Period August 1, 2004 through December 31, 2004
Period from
Year Ended August 1, 2004 to
December 31, 2005 December 31, 2004
$ $
Sales 64,574,192 24,111,419
Cost of sales 61,028,261 22,903,021
Gross profit 3,545,931 1,208,398
Operating expenses 4,132,121 1,056,234
Income from operations (586,190) 152,164
Interest expense 324,536 77,774
Income before income taxes (910,726) 74,390
Income tax benefit (provision) 200,000 (53,000)
Net income (loss) (710,726) 21,390
Retained earnings (deficit):
Beginning of period 21,390
-
End of period (689,336) 21,390
Legacy Distribution Group Inc
(Formerly Best Holdings Acquisition Company, LLC And Subsidiary)
Consolidated Balance Sheets
December 31, December 31,
2005 2004
$ $
Assets
Current Assets
Cash - 45,104
Accounts receivable, net of allowance for
doubtful accounts of $100,000 and $215,000
at December 30, 2005 and December 31, 2004) 1,670,664 1,201,219
Inventory 1,701,185 2,072,524
Notes receivable, related parties 459,164 439,004
Deferred income taxes
- 44,000
Recoverable income taxes 269,500
-
Other current assets 403,307 174,219
Total Current Assets 4,503,820 3,976,070
Property and equipment, net 1,264,849 865,216
Goodwill 1,502,378 1,502,378
Deposits 46,083 -
Total Other Assets 1,548,461 1,502,378
Total Assets 7,317,130 6,343,664
Liabilities and Members' Equity
Current Liabilities
Checks drawn in excess of cash 47,608 -
Accounts payable and accrued expenses 787,117 410,891
Cigarette and tobacco taxes payable - 678,536
Income taxes payable 71,875 71,875
Line of credit 3,000,000 1,393,588
Current portion of notes and leases payable 467,027 242,236
Holdback note payable 430,000 405,000
Total Current Liabilities 4,803,627 3,202,126
Notes payable, net of current portion 1,498,229 1,736,018
Leases payable, net of current portion 294,980 -
Deferred income taxes 260,000 234,500
Members' Equity
Members' capital 1,149,630 1,149,630
Retained earnings (deficit) (689,336) 21,390
Total Members' Equity 460,294 1,171,020
Total Liabilities and Members' Equity 7,317,130 6,343,664
Legacy Distribution Group Inc
(Formerly Best Holdings Acquisition Company, LLC And Subsidiary)
Consolidated Statement of Cash Flows
For the Year Ended December 31, 2005 and
and the Period August 1, 2004 through December 31, 2004
Period from
Year Ended August 1, 2004 to
December 31, 2005 December 31, 2004
$ $
NET INCOME (LOSS)
(710,726) 21,390
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization
269,309 46,893
Loss on disposal of fixed assets
19,889
Provision for bad debts
186,732 110,000
Provision for deferred income taxes
69,500 (24,000)
Changes in operating assets and liabilities
Accounts receivable
(656,177) (493,216)
Inventory
371,339 561,611
Other assets
(544,672) (202,167)
Accounts payable and accrued expenses
423,835 229,048
Cigarette and tobacco taxes payable
(678,536) (92,801)
Income taxes payable
- 71,875
Other liabilities
- 16,482
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
(1,249,507) 245,115
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Best Candy and Tobacco Company,
net of shareholder loans repaid - (4,873,630)
Purchases of property and equipment (227,701) (24,773)
Note due to seller 25,000
Note due from investor (20,160) (439,004)
NET CASH USED IN INVESTING ACTIVITIES (222,861) (5,337,407)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan proceeds - 2,059,000
Line of credit proceeds 10,941,844 1,591,000
Line of credit repayments (9,335,432) (197,412)
Proceeds from related party note 100,000 -
Loan repayments (279,148) (80,746)
Capital contribution - 1,149,630
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,427,264 4,521,472
NET DECREASE IN CASH AND EQUIVALENTS (45,104) (570,820)
CASH AND EQUIVALENTS-Beginning of Period 45,104 615,924
CASH AND EQUIVALENTS-End of Period - 45,104
NOTE 1. NATURE OF OPERATIONS
Organisation
Best Holdings Acquisition Company, LLC ('Company') is an Arizona limited
liability company formed on August 1, 2004 for the purpose of acquiring Best
Candy and Tobacco Company ('Best').
On February 2, 2006, the Company was merged into Legacy Distribution Group, Inc.
('Legacy'), a Delaware corporation. Legacy was incorporated on January 25, 2006
to be a holding company for Best. Following the merger, the separate existence
of the Company ceased.
On March 16, 2006, Legacy's common stock was listed on the London Alternative
Investment Market (AIM).
The Company's operates on a 52 week fiscal period ending on Friday. The
Company's fiscal years ended on December 30, 2005 and December 31, 2004,
respectively.
Best is a wholesale distributor of tobacco and other grocery products in Arizona
and Nevada. Tobacco products represent approximately eighty percent (80%) of
the Company's sales.
On August 1, 2004, the Company acquired 100% of the outstanding shares of Best
for aggregate consideration of $5,405,000 from former stockholders as follows:
Cash $ 5,000,000
Holdback note 405,000
$ 5,405,000
The Company paid the former stockholders an additional $25,000 to extend the due
date of the note from February 1, 2006 to March 1, 2006. The total note amount
of $430,000 was paid in full on March 13, 2006.
The purchase of the Company has been accounted for using the purchase method of
accounting and accordingly, the acquired assets and liabilities have been
recorded at fair value. The preliminary purchase price allocation is as
follows:
Cash $ 615,924
Accounts receivable, net 818,003
Inventories 2,634,135
Other current assets 98,142
Property and equipment 887,616
Goodwill 1,502,378
Deferred income taxes (214,500)
Assumed liabilities (936,698)
$ 5,405,000
The accompanying financial statements of the Company include the operations of
Best from August 1, 2004, the date of acquisition. The following pro forma
statements of income are based on the historical financial statements of Best
and are presented to show the operations of the Company as if the purchase
transaction had occurred on January 1, 2004. The pro forma financial
information is presented for illustrative purposes only, and is not indicative
of the operating results that would have occurred if the transaction occurred on
January 1, 2004, nor is it necessarily indicative of future operating results.
January 1, 2004 August 1, 2004 to Year Ended
to July 31, 2004 December 31, 2004 December 31,
(Best) (Company) 2004 (Pro Forma)
$ $ $
Sales 32,896,439 24,111,419 57,007,858
Cost of sales 31,163,588 22,903,021 54,066,609
Gross profit 1,732,851 1,208,398 2,941,249
Operating expenses 1,420,403 1,056,234 2,476,637
Income from operations 312,448 152,164 464,612
Other income (expense) 2,105 (77,774) (75,669)
Income before income taxes 314,553 74,390 388,943
Provision for income taxes 124,000 53,000 177,000
Net income 190,553 21,390 211,943
The Company prepares its financial statements in accordance with accounting
principles generally accepted in the United States of America.
NOTE 2. REVOLVING LINE OF CREDIT
At December 30, 2005, the Company had an agreement with a bank to borrow up to
$3,000,000 on a revolving line of credit. The agreement provided for interest
at the bank's prime rate plus 0.5% (7.75% at December 30, 2005) with interest
payments due monthly. The agreement includes certain financial covenants. The
line of credit is secured by all assets of the Company and by personal
guarantees from certain shareholders.
On February 4, 2006, the line was amended. The maximum available under the line
was reduced from $3,000,000 to $2,500,000, and the interest rate was increased
to the bank's prime rate + 2.00%. The line is subject to renewal on March 31,
2007.
NOTE 3. NOTES PAYABLE
Notes payable consist of the following:
December 31
2005 2004
$ $
Acquisition note due September 30, 2007; principal payments of
$29,857 plus interest at prime + 2.5% (10.0% at December 30,
2005) due monthly 1,214,286 $ 1,428,571
Mortgage note due September 30, 2007; principal payments of
$2,329 plus interest at prime + 2.0% (9.5% at December 30, 2005)
due monthly 521,733 549,683
Related party note due February 10, 2007; interest at 10%
100,000 -
Vehicle loans due August 10, 2010; monthly payments of $1,208
including interest at 4.9% 60,251 -
1,896,270 1,978,254
Less: current portion 398,041 242,236
Notes payable, net of current portion 1,498,229 1,736,018
The notes payable are secured by all the Company's assets and by personal
guarantees from certain shareholders and require maintenance of certain
financial covenants. The vehicle loans are secured by the automobiles acquired
under the agreements.
NOTE 4. RISKS AND CONCENTRATIONS
The Company maintains its cash in the bank deposit accounts, which, at times,
may exceed federally insured limits. The Company has not experienced any losses
in such accounts.
During the year ended December 31, 2005, one customer represented greater than
10% of the Company's sales. This customer is a related party through common
ownership with the Company as discussed in Note 11. During the period from
August 1, 2004 to December 31, 2004, sales to one customer comprised
approximately 10% of the Company's sales.
During the year ended December 31, 2005 and from August 1, 2004 to December 31,
2004, purchases from two vendors comprised approximately 60% and 56% of the
Company's purchases, respectively.
NOTE 5. RELATED PARTY TRANSACTIONS
Gila Candy & Tobacco Co. (Gila) has common ownership with the Company. The
Company sells cigarettes and other products to Gila under terms that management
considers to be arm's-length. Amounts due from Gila totaled $403,963 at December
31, 2005. This amount was paid on March 15, 2006. There were no amounts due
from Gila at December 31, 2004.
On November 21, 2005, the Company received a working capital advance of $100,000
from a related party. The advance is due on February 10, 2007 and bears interest
at 10%.
NOTE 6. SUBSEQUENT EVENTS
On February 2, 2006, the Company was merged into Legacy Distribution Group, Inc.
('Legacy'), a Delaware corporation. Legacy was incorporated on January 25, 2006
to be a holding company for Best. Following the merger, the separate existence
of the Company ceased.
Legacy has authorised capital of 550,000,000 shares. Upon the merger on January
25, 2006, 132,222,390 shares of Legacy's common stock were outstanding. On March
9, 2006, Legacy implemented a reverse stock split whereby every 3.385 shares
outstanding prior to the split were converted into 1 share of common stock.
Immediately after this reverse split, there were 39,061,269 shares of common
stock outstanding.
On March 14, 2006, Legacy issued warrants to purchase 26,739,605 shares of
common stock. One third of the warrants are exercisable in whole or in part at
the price of 10 pence ($0.176) per share during the one year period ending March
14, 2007. One third of the warrants are exercisable in whole or in part at the
price of 20 pence ($0.352) per share during the two year period ending March 14,
2008. The remaining one third of the warrants are exercisable in whole or in
part at the price of 30 pence ($0.528) per share during the three year period
ending March 14, 2009.
On March 16, 2006, Legacy's common stock was admitted to AIM.
NOTE 7. DIVIDENDS
The Directors do not recommend the payment of a dividend
NOTE 8.
The reports and accounts will be dispatched to shareholders in due course
This information is provided by RNS
The company news service from the London Stock Exchange