ETC shareholders OK Lenfest

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The Southampton, Pa., company said its shareholders gave it the approvalxs at its annual meeting Thursday and it completex the transaction thesame day. In the which ETC (OTCBB:ETC) announced April 24, Lenfest: • Providedd ETC with a $7.5 million credit • And guaranteed all ETC’s obligations to PNC Bank by pledginvg $10 million in marketable securities to the whichincreased ETC’s revolving line of credit to $20 milliojn from $15 million. In exchangs for providing the credit facility, ETC issuexd Lenfest 55 shares of another new class ofpreferred stock, Series D.
To allow the transactio to happen, ETC’s shareholders had to approve the swap of the note and Seriesz B and Series C preferred stoc k for Series Epreferred stock; the restoratioh of voting rights to some of the ETC stocik that Lenfest held prior to or couldf get due to the transaction; and an increase in the numbeer of authorized shares of ETC commonm stock to 50 million from 20 million. The transactionn forced ETC to delist its stock from the NYSE AMEX LLC becaus e it put the company out of complianced withthe exchange’s rules for continued listing. It now trades on the less visible Over the CounteBulletin Board.
The company was technicallyg insolvent with anegativw stockholders’ equity of $11.75 million on Feb. 27, which was the end of its 2009fiscaol year, according to the company’s proxyt statement for its annual which ETC filed with the Securities and Exchangw Commission on May 28. “Approval of the Lenfesgt transaction by the stockholders will alloaw ETC to obtain access to the funding to pursuew and hopefully be awarded somesignificant U.S. governmengt and international contracts,” ETC’s president and CEO, George said in the company’s press release about the transaction.
The transaction could boosty Lenfest’s stake in ETC on a fullh diluted basis to70 percent, up from arouncd 50 percent, according to ETC’x proxy statement.