Information  X 
Enter a valid email address

Vycon Inc (VYCO)

  Print   

Wednesday 18 February, 2009

Vycon Inc

Cancellation of admission to

RNS Number : 5165N
Vycon Inc
18 February 2009
 



VYCON, INC.

('Vycon' or 'the Company')


PROPOSED CANCELLATION OF ADMISSION TO TRADING ON AIM



The Company today announces that it is seeking Stockholder approval for the cancellation of admission to trading on AIM of the Common Shares.


BACKGROUND 


On 10 November 2008 Vycon announced that it proposed to raise new funds of up to US$6.4 million before expenses by way of a subscription for new Convertible Loan Notes. On 3 December 2008 the Company extended the Offer to 23 December 2008 and o24 December 2008 the Company announced that the Offer had closed and Convertible Loan Notes with a nominal value of US$3.2 million and approximately 4.1 million Warrants had been issued pursuant to the Offer.  


In the circular which summarised the Offer Stockholders were informed that in the event that the Offer was not fully subscribed it would be necessary for the Company to secure additional funding. 


As the Offer was only partially subscribed it has been necessary for the Company to attempt to secure additional sources of funding. The Directors believe it is in the best long-term interest of the Company and of the Stockholders, as a whole, to obtain adequate investment capital for the Company to continue execution of its business plan and remain a going concern.


Accordingly, a number of meetings have recently taken place with potential investors. However, whilst these meetings have been productive the potential investors have not indicated any interest in making an investment in the Company whilst its Common Shares are traded on AIM. The Company has expended considerable resources in exploring the best strategy for raising further capital and the Directors now believe there is very little prospect of Vycon attracting further investment as a publicly traded company.


CURRENT TRADING


Last year saw substantial progress at Vycon. Significant positive steps in the execution of its business plan included:


developing channel partner relationships with significant players in each of its target markets;

repositioning its variable direct current ('VDC') power quality products to better address market requirements;

completing technical reconfiguration of its VDC product line and obtaining UL and CE agency certification for those products (agencies which have developed sets of safety standards for various classes of equipment); and

completing technical reconfiguration of its REGEN product to better address customer requirements and improve the value proposition to the Company and to its customers.


With the reconfiguration of the VDC product line and with the added credibility of the Company's channel partners in the power quality market, orders for these products were being received as soon as the product had received agency certification. Similarly in the REGEN market the Company has seen greater interest in its products as they have proven themselves in the field. This progress was evidenced by the sales increase in the first half of 2008 as compared with all of 2007.  


This trend in sales has continued through the second half of 2008 and into 2009. The Company currently has a backlog of orders for its products in both markets and has seen an accelerating interest in its products, particularly for the VDC product line in the power quality market. 


However, while these efforts have yielded substantial fruit they have not brought the Company to the point of positive cash flows from its operating activity and without additional funding the Company will likely not reach this point


REASONS FOR THE CANCELLATION


The Directors have been considering for some time the merits or otherwise of the Company continuing to trade on AIM. The following factors were taken into account during their review:


  • the current economic turmoil has led to significant turbulence and falls in the values of the global stock markets, from which Vycon is not immune. The stock market tends to operate on a short term investment horizon which has little basis in the underlying fundamentals of a business such as ours. The susceptibility of the share price to market conditions is not to the benefit of the business;

  • Vycon, like most other smaller listed companies, has been unable to raise capital from institutional investors as they remain uninterested in committing funds to smaller listed companies with the present problems of the markets. The Directors do not expect this situation to change in the foreseeable future;

  • the low liquidity of Vycon's Common Shares leads to a volatility in the share price which may not reflect the true worth of the business;

  • the costs, management time and regulatory burdens associated with maintaining trading on AIM; and

  • the recent indications from potential investors that they would only be interested in investing in Vycon as a private company. 


The Board now believes that the best course of action is that which will provide the best means to safeguard the Company's future and, therefore, in view of the factors referred to above, the Board believes cancellation of the admission of the Company's Common Shares to trading on AIM should be sought


SPECIAL MEETING OF STOCKHOLDERS


A Special Meeting of Stockholders is being convened to be held at 23695 Via Del Rio, Yorba Linda, CA 92887, USA, on 18 March 2009 at 11.00 am, at which a resolution to approve the cancellation of the admission to trading on AIM of the Common Shares will be proposed as a special resolution.


If this resolution is passed by not less than 75 per cent. of votes cast by Stockholders at the SMS then it is anticipated that the cancellation of the admission to trading on AIM of the Common Shares will become effective from 7.00 am on 27 March 2009.


CANCELLATION


In accordance with Rule 41 of the AIM Rules, the Cancellation is conditional upon the consent of not less than 75 per cent. of votes cast by Stockholders at the SMS. Vycon's bylaws require that the holders of at least 40 per cent. of the total number of shares entitled to vote be present in person or by proxy in order for the business of the SMS to be transacted.


Subject to the requisite Stockholder approval, the Cancellation is expected to be effective from 7.00 am on 27 March 2009.


FOLLOWING THE CANCELLATION 


The Directors are aware that following the Cancellation Stockholders may still wish to acquire or dispose of Common Shares and, accordingly, the Company intends to use reasonable endeavours to put in place and maintain some form of  facility to enable Stockholders or persons wishing to acquire Common Shares to buy or sell at an agreed price.


The Company intends to continue to communicate with its Stockholders using its website at www.vyconenergy.com and directly by letter or email where appropriate.


RECOMMENDATION


The Directors unanimously consider the Cancellation to be in the best interests of the Company and its Stockholders as a whole and the Directors recommend that Stockholders vote in favour of the resolution to be proposed at the SMS as they and certain Stockholders connected with them intend to do in respect of their beneficial holdings of Common Shares amounting to, in aggregate, 12,578,696 Common Shares, representing approximately 41.5 per cent. of the current issued share capital of the Company.


CIRCULAR


A circular is being posted to Stockholders today with a Notice of Special meeting of Stockholders to approve the Cancellation.


For further information please contact:


Vycon, Inc:

Vatche Artinian                    Tel: 001 714 386 3810

Craig Glynn                        Tel: 001 714 386 3800


Smith & Williamson Corporate Finance Limited:

Nick Reeve                        Tel: +44 (0)117 933 3344

David Abbott

Barrie Newton


Cardew Group:

Rupert Pittman                    Tel: +44 (0)20 7930 0777

Shan Shan Willenbrock



EXPECTED TIMETABLE OF PRINCIPAL EVENTS


Date of this announcement 

18 February 2009

Latest time and date for receipt by Capita Registrars of Forms of Proxy for the Special Meeting of Stockholders

6.00 pm (GMT) on 16 March 2009

Special Meeting of Stockholders

11.00 am (Pacific Daylight Time) on 18 March 2009

Cancellation of admission to trading on AIM of the Common Shares

7.00 am (GMT) on 27 March 2009

References to time in this announcement are to local time, as appropriate.


DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise:

'AIM' 

the market known as AIM operated by the London Stock Exchange;

'AIM Rules' 

the 'AIM Rules for Companies' as published by the London Stock Exchange from time to time;

'Board' or 'Directors'

the directors of Vycon;

'Business Day'

any day other than a Saturday or a Sunday or public holiday when banks generally are open in London for general banking business;

'Cancellation'

the proposed cancellation of admission to trading on AIM of the Common Shares;

'certificated' or 'in certificated form'

the description of a share or other security which is not in uncertificated form (that is, not in CREST);

'Common Shares'

the common shares of par value of US$0.0001 each of the Company;

'Company' or 'Vycon'

Vycon, Inc.;

'Convertible Loan Notes'

the unsecured subordinated convertible loan notes of the Company created by a loan note instrument dated 7 November 2008;

'CREST' 


the computerised settlement system (as defined in the CREST Regulations) operated by Euroclear which facilitates the transfer of title to shares in uncertificated form;

'DGCL'

Delaware General Corporation Law;

'Euroclear' 

Euroclear UK & Ireland Limited;

'London Stock Exchange'

London Stock Exchange PLC;

'Notice of SMS'

the notice of the Special Meeting of Stockholders set out at the end of this document;

'Offer'

the offer for Convertible Loan Notes on the terms and subject to the conditions set out in the circular to Stockholders dated 10 November 2008 and the accompanying Application Form;

'Optionholders'

holders of Options pursuant to the Share Option Schemes; 

'Options'

the options granted by Vycon pursuant to the Share Option Schemes entitling the holder to subscribe for Common Shares;

'Share Option Schemes'

the 2006 Incentive Award Plan adopted by Vycon on 4 October 2006 and the Vycon Non-Qualified Stock Option Plan;

'Special Meeting of Stockholdersor 'SMS'

the special meeting of stockholders of the Company (including any adjournment thereof), being convened in relation to the Cancellation;

'Stockholders'

holders of Common Shares;

'UK' or 'United Kingdom'

the United Kingdom of Great Britain and Northern Ireland;

'United States'

the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction;

'US$'

United States dollars, the lawful currency of the United States;

'Warrants'

the warrants to subscribe for Common Shares issued to subscibers for Convertible Loan Notes pursuant to the Offer.




This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
MSCCKFKPDBKDPBD

a d v e r t i s e m e n t