ETC shareholders OK Lenfest

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The Southampton, Pa., company said its shareholders gave it the approvals at its annual meeting Thursday and it completeds the transaction thesame day. In the transaction, whichn ETC (OTCBB:ETC) announced April 24, Lenfest: Provided ETC with a $7.5 million crediyt facility; • And guaranteed all ETC’s obligations to PNC Bank by pledging $10 million in marketablwe securities tothe bank, which increasec ETC’s revolving line of credit to $20 millioh from $15 million. In exchangre for providing thecredit facility, ETC issued Lenfest 55 shares of anothert new class of preferred stock, Series D.
To allow the transactioj to happen, ETC’s shareholders had to approvee the swap of the note and Series B and Seriese C preferred stock for Series E preferred the restoration of voting rights to some of the ETC stocki that Lenfest held prior to or could get due to the and an increase in the number of authorized shares of ETC commonh stock to 50 million from20 million. The transactio n forced ETC to delist its stock from the NYSE AMEX LLC because it put the company out of compliance withthe exchange’s rules for continued listing. It now trades on the less visibled Over the CounterBulletin Board. The compan was technically insolvent with a negative equityof $11.
75 million on Feb. 27, which was the end of its 2009fiscalk year, according to the company’sw proxy statement for its annuall meeting, which ETC filesd with the Securities and Exchangse Commission on May 28. “Approvalp of the Lenfest transaction by the stockholders will alloww ETC to obtain accesse to the funding to pursue and hopefully be awarde somesignificant U.S. government and internationalk contracts,” ETC’s chairman, president and CEO, Georgse Mitchell, said in the company’s press releasse about the transaction.
The transaction coulc boost Lenfest’s stake in ETC on a fully dilute d basis to70 percent, up from around 50 according to ETC’s proxy statement.