Statement re Circular

 

TIDMPYF 
 
RNS Number : 7836X 
PolyFuel Inc. 
21 August 2009 
 

21 August 2009 
 
 
 
 
PolyFuel, Inc. (the "Company") 
 
 
Cessation of operations, proposed cancellation of trading on AIM and proposed 
liquidation and dissolution of the Company 
 
 
On August 13, 2009, PolyFuel announced that the Company has ceased operations 
and intends to seek approval from its stockholders to cancel admission of its 
shares of common stock to trading on AIM and to liquidate and dissolve the 
Company. 
 
 
A circular has today been posted to stockholders with notice of a Special 
Meeting of the Stockholders of the Company ("Meeting") convened for 4 p.m. 
London Time / 8 a.m. Pacific Time on 11 September 2009 at 1245 Terra Bella 
Avenue, Mountain View, California, USA, 94043. 
 
 
Cessation of operations and liquidation and dissolution of the Company 
PolyFuel has previously announced that it was seeking additional sources of 
capital to help fund the completion of the Company's technology and product 
development and to achieve commercial introduction of the Company's products and 
technology. In PolyFuel's experience, equity capital for AIM-listed development 
stage companies is very difficult to raise in the current economic environment. 
Although PolyFuel made significant technical progress toward the goal of 
incorporating fuel cell technology into consumer electronics applications, 
unfortunately, despite much effort, the Company has been unable to secure its 
critical next financing round. 
In addition to trying to secure a financing round, in light of the Company's 
financial situation, the Board also considered a number of strategic 
alternatives and directions for the Company prior to exploring the possibility 
of a liquidation and dissolution. Over the past several months, the Company has 
had discussions with certain potential strategic parties. In the belief of the 
Board, none of these parties expressed an interest in a significant partnership 
with the Company or acquisition in a period of time that was viable for the 
Company or that was on terms which were in the best interest of the Company and 
its stockholders. 
Accordingly, without being able to secure additional financing, and without a 
partnership or strategic transaction on terms that were in the best interests of 
the Company and its stockholders, the Board has ceased operations of the Company 
and has terminated all but a few of its employees. As a result of the cessation 
of operations, the Board has recommended that the Company dissolve and liquidate 
its assets. After payments to creditors and to management and employees for 
severance, and for expenses associated with winding up operations, and a setting 
aside of certain amounts for any potential future liabilities or claims by 
creditors, any remaining amounts would be available for a distribution to 
stockholders. Given the financial position of the Company, there can be no 
assurances that any amounts will be available for distribution to PolyFuel's 
stockholders. 
If the stockholders holding a requisite number of shares of common stock of the 
Company do not approve the liquidation and dissolution of the Company, the Board 
of Directors anticipates the Company will be forced to seek protection under 
Chapter 7 of Title 11 of the United States Code (the Bankruptcy Code). Under a 
Chapter 7 bankruptcy election, a court would appoint a trustee to sell all of 
the assets of the Company and to distribute the proceeds to its creditors and, 
if any assets remain, to the stockholders of the Company. The Board of Directors 
would like to avoid the expense and any delays associated with a Chapter 7 
bankruptcy and recommends that the stockholders vote in favour of the 
dissolution and liquidation. 
 
 
Background to and reasons for the Cancellation 
In the light of the cessation of operations and forthcoming dissolution of the 
Company, the Board has agreed that it would be in the best interests of the 
Company and its stockholders as a whole if the admission of the Shares to 
trading on AIM is cancelled (the "Cancellation"). 
This will enable the Company to reduce costs and conserve remaining cash 
resources for the liquidation and dissolution process. As the financial position 
of the Company in this phase is necessarily uncertain, it would in any event be 
difficult to ensure that a fair and transparent market in the Company's stock 
continues. 
 
 
Effect of the Cancellation on Stockholders 
The principal effect of the Cancellation would be: 
  *  there would no longer be a formal market mechanism enabling stockholders to 
  trade their Shares and the CREST facility will be cancelled; 
  *  the Company would not be bound to announce material events, nor to announce 
  interim results; and 
  *  the Company would no longer be required to comply with any of the corporate 
  governance requirements for quoted companies. 
 
 
 
Stockholder Meeting 
A circular has today been posted to stockholders with notice of a Special 
Meeting, to be held at the Company's Headquarters located at 1245 Terra Bella 
Avenue, Mountain View, California, USA, 94043 at 8 a.m. Pacific Time/ 4p.m. 
London time on 11 September 2009. 
Arrangements have been made for any stockholders who wish to listen to the 
proceedings at the meeting to do so by conference call facility by dialing +44 
(0)20 7162 0077, informing the operator that would like to join the PolyFuel 
conference call and quoting conference ID code 843897. Please note that 
attendance by conference call will not count towards the quorum requirements nor 
enable you to vote by phone. If you plan to listen to the meeting on conference 
call, you should complete and return the form of proxy in order to vote and be 
counted for the purposes of the quorum. 
Proposal No. 1 in the Notice proposes the Cancellation. Under the AIM Rules, it 
is a requirement that any cancellation of shares to trading on AIM must be 
approved by not less than 75% of votes cast by stockholders at a special 
meeting. Accordingly, Proposal No. 1 requires the approval of not less than 75% 
of the votes cast by stockholders at the Meeting, whether in person or by proxy. 
Assuming Proposal No. 1 is approved, it is expected that the cancellation of the 
admission of the Company's Shares to trading on AIM will be effective from 7.00 
a.m. on 21 September 2009. 
Proposal No. 2 in the Notice proposes the liquidation and dissolution of the 
Company. Under Section 275 of the General Corporation Law of the State of 
Delaware, the dissolution and liquidation of the Company must be approved by a 
majority of the Board and a majority of the outstanding shares of the Company. 
Accordingly, Proposal No. 2 requires the approval of not less than 50% of the 
total number of outstanding shares of common stock. 
 
 
Recommendation 
The Board believes that the resolutions and proposals set out in the notice of 
the Meeting are in the best interests of the Company and stockholders as a 
whole. Accordingly, the Board unanimously recommends that the stockholders vote 
in favour of the resolutions and proposals, as they intend to do in respect of 
their own holdings amounting to 174,000 shares of common stock, representing 
0.31%. of the Company's issued share capital. 
 
 
End 
 
 
For further information, please contact: 
 
 
+----------------------------------------------+------------------------+ 
| PolyFuel, Inc                                | Tel: [phone]   | 
+----------------------------------------------+------------------------+ 
| Jim Balcom, Chief Executive Officer          |                        | 
| Tom Caldwell, Chief Financial Officer        |                        | 
|                                              |                        | 
+----------------------------------------------+------------------------+ 
| Hogarth Partnership Limited                  | Tel: [phone]    | 
|                                              | 9477                   | 
+----------------------------------------------+------------------------+ 
| Nick Denton / Ian Payne                      |                        | 
|                                              |                        | 
+----------------------------------------------+------------------------+ 
| KBC Peel Hunt (Nominated Adviser and Broker) | Tel: [phone]    | 
|                                              | 8900                   | 
+----------------------------------------------+------------------------+ 
| Jonathan Marren / David Anderson             |                        | 
+----------------------------------------------+------------------------+ 
 
 
 
 
 
 
Expected Timetable 
 
 
+-----------------------------------------------------------+------------------+ 
| Posting of circular and form of proxy to stockholders     | 21 August 2009   | 
|                                                           |                  | 
+-----------------------------------------------------------+------------------+ 
| Latest time and date for receipt of forms of proxy        | 11:59 a.m.       | 
|                                                           | London Time on   | 
|                                                           | 10 September     | 
|                                                           | 2009             | 
|                                                           |                  | 
+-----------------------------------------------------------+------------------+ 
| Meeting                                                   | 8 a.m. Pacific   | 
|                                                           | Time / 4 p.m.    | 
|                                                           | London Time on   | 
|                                                           | 11 September     | 
|                                                           | 2009             | 
|                                                           |                  | 
+-----------------------------------------------------------+------------------+ 
| Expected cancellation of trading of common stock on AIM   | 7.00 a.m. London | 
|                                                           | Time on 21       | 
|                                                           | September 2009   | 
+-----------------------------------------------------------+------------------+ 
|                                                           |                  | 
+-----------------------------------------------------------+------------------+ 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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