SOURCE: Seven Arts Pictures plc

Seven Arts Pictures plc

May 10, 2011 14:55 ET

Seven Arts Pictures plc Announces 1-for-5 Reverse Stock Split and Approval of the Fletcher Transaction at Its Annual General Meeting at Its London Offices on May 9, 2011

HOLLYWOOD, CA--(Marketwire - May 10, 2011) - Seven Arts Pictures plc (NASDAQ: SAPX) ("Seven Arts" or the "Company") announced today that its Annual General Meeting was held at the offices of the Company at 136-144 New Kings Road, Second Floor, London, SW1 4LZ on Monday May 9, 2011 at 10 am.

The resolutions approved at the Annual General Meeting are in summary:

  • to receive the Auditors' reports and the financial statements for the 12 months ended June 30, 2009;

  • to receive the Auditors' reports and the financial statements for the 12 months ended June 30, 2010 as filed with the Securities and Exchange Commission;

  • to re-appoint Mr. Simon Clement-Davies who having been appointed since the last Annual General Meeting retire in accordance with Article 88 of the Company's Articles of Association;

  • to re-appoint Mr. Hubert Gibbs who having been appointed since the last Annual General Meeting retire in accordance with Article 88 of the Company's Articles of Association;

  • to re-appoint Mr. Daniel Reardon who having been appointed since the last Annual General Meeting retire in accordance with Article 88 of the Company's Articles of Association;

  • to re-elect Mr. Peter Hoffman as a Director of the Company who is retiring by rotation under Article 88 of the Company's Articles of Association;

  • to re-elect MJS Kate Hoffman as a Director of the Company who is retiring by rotation under Article 88 of the Company's Articles of Association;

  • to re-elect MJS Elaine New as a Director of the Company who is retiring by rotation under Article 88 of the Company's Articles of Association;

  • to appoint Crowe Clark Whitehill LLP as the Company's Auditors until the next Annual General Meeting or as otherwise appointed by the Board of Directors and to authorise the Directors to determine their remuneration;

  • to renew the Board's authority to allot relevant securities;

    (i) up to an aggregate amount of £2,500,000;

    (ii) and as if statutory pre-emption rights did not apply to any such
    allotment,

  • to provide the Company with sufficient capacity to allot further shares over the coming year to, inter alia, raise further finances for the Company if the Directors consider this appropriate and in the best interests of the Company;

  • to consolidate the ordinary share capital of the Company and to subdivide the resulting ordinary share capital of £1.25 into one ordinary share of £0.25 and a deferred share of £1.00;

  • to amend the Articles of Association by confirming the limited liability status of the shareholders; and

  • to approve the possible issue of ordinary shares to an affiliate of Fletcher Asset Management on later exchange of convertible preferred stock in a subsidiary of the Company, for a price of 20% above current market price of the Company's ordinary shares.

Consolidation of Ordinary Share Capital By 1-For-5 Reverse Split

The Company has determined that it is in its best interests for its ordinary shares to continue to be traded on the NASDAQ Capital Market ("NASDAQ"). The Company meets the share maintenance standards for NASDAQ other than the share price. The minimum share price required by the NASDAQ to continue trading in the Company's ordinary shares is $1.00. The share consolidation approved by the shareholders will occur by a 1-for-5 reverse split and is designed to increase the price of the Company's ordinary shares to an amount sufficient to meet NASDAQ's share maintenance standards.

The terms of the consolidation and reverse split are to issue one New Ordinary Share of £1.25 each in the capital of the Company (New Ordinary Shares) for every five existing Ordinary Shares of £0.25 each (Existing Ordinary Shares) held on the record date as at the close of business on May 7, 2011.

Since the resulting par value will be £1.25, management has determined that the par value trading ordinary shares should be divided into one ordinary share of £0.25 par value and one deferred share £1.00 par value by a resolution to that effect.

The consolidation of share capital will be effective on commencement of trading Thursday, May 12, 2011. The Company has received a letter from NASDAQ dated May 3, 2011 notifying the Company that it is not in compliance with the NASDAQ rule requiring a $1.00 minimum offer price for its ordinary shares. The Company intends to seek a hearing as permitted by NASDAQ on the Company's appeal to continue the NASDAQ listing for its ordinary shares. The Company anticipates it will meet this requirement after taking into account the consolidation of ordinary capital or reverse split approved by the Company's shareholders.

Approval of Issue of Ordinary Shares to Affiliates of Fletcher Asset Management

The Company entered into an agreement with an affiliate of Fletcher Asset Management ("Fletcher") on December 31, 2010, under which this affiliate would acquire 17,500 shares of Series A preferred stock of a wholly owned subsidiary of the Company, Seven Arts Entertainment Inc., "SAE," at par value US$100 on closing and under which this affiliate would have the option to acquire up to an additional 282,500 shares of such preferred stock. Each share of such preferred stock is convertible into shares of common stock of SAE if the Company in the future transfers its "public company status" to SAE, or is otherwise exchangeable for ordinary shares of the Company at an agreed price, which will in some cases be the volume weighted average price of the Company's ordinary shares on closing plus 20%. As a result, the Company could issue up to US$30,000,000 of its ordinary shares over time to Fletcher although management does not believe that Fletcher intends to do more than hold the initial issuance of Series A preferred stock of SAE. The executed agreements with Fletcher and the Company's press release describing the transaction may be found on the Company's website: www.7artspictures.com.

The approval of the Fletcher transaction by shareholders is effective today.

About Seven Arts:
Seven Arts Pictures PLC was founded in 2002 as an independent motion picture production and distribution company engaged in the development, acquisition, financing, production, and licensing of theatrical motion pictures for exhibition in domestic (i.e., the United States and Canada) and foreign theatrical markets, and for subsequent worldwide release in other forms of media, including home video and pay and free television.

Cautionary Information Regarding Forward-Looking Statements:
Forward-looking statements contained in this press release are made under the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from the anticipated.

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