Microtec’s board members disembark

Due to a lack of insurance coverage, six seats remain unoccupied on the company’s board
Wednesday, September 1, 2004

ST. AUGUSTIN, Quebec - Six members of Microtec Enterprises’ board of directors have resigned after the company’s insurance carrier chose not to renew the policy that covered the directors and officers - leaving the six individuals unprotected in the event of lawsuits filed against the company.
According to Daniel Tardif, Microtec’s communications director, the change is part of a transition - one that includes announcing a new investor into the financially strapped company in September.

“It’s a situation we cannot say very much about right now,” explained Tardif who downplayed the turn of events. “We do have something important coming up.”

Sources within the security industry said Microtec has been on the market for some time and the announcement of a new investment partner may actually be a buyer for the security service provider. But an interested buyer may be hard to come by.

The company has struggled with its restructuring recently, trying to stay afloat amid a sea of debt. Earlier this year, it was suspended from the TSX Exchange for failing to meet minimum capitalization requirements and saw 19.9 percent of its subordinate voting shares purchased by Securex, a financial provider to the security industry, in an unsolicited offer. The company also announced in early August that initiatives it has taken to reduce its debt, including a $15.5 million equity offer, did not receive support from management.

Tardif said for now, the company is running as usual, although he did acknowledge that the resignations appear to add to the company’s troubles.

“From inside, we understand the insurance company did not want to maintain that level of security,” Tardif said. “This situation is not serious.”

For now, the board positions will remain unoccupied - waiting to be filled if and when a new investor comes into the fold.