Here are the highlights from the question and answer session that took place at the Annual General Meeting held on 30th June 2016.

Q. I am a small shareholder who bought these shares on a punt in the difficult times. What precautions exist to avoid the problems of the past or not to repeat them in the future?

A. Much was covered in my letter to shareholders dated 3rd June 2016. We are quite close to issuing the detailed documentation for all shareholders to consider participating or not in this fundraising for our shareholding in the Zhongying joint venture. There are difficult judgements to make around the fundraising. Will the future ultimately bring value to our shareholders after the event? But it is important that shareholders get the opportunity to make that judgement call for themselves.

I and my fellow director, Paul Bobroff, have visited Wuhan. It is a city of 13 million people and our joint venture partners provide a substantial part of all of the clean fuel needs of that city. The company would seem to have a unique process of converting biomass, in whatever form from wood pulp to household rubbish, into clean energy fuel whereas other techniques convert biomass into gas or electricity. So, this is quite exciting in terms of the possible next stage of our company’s journey. The fundraising is being underwritten but each shareholder will be able to make their own decision based on their own needs as to whether or not they want to stick where they are or participate or indeed apply for more than their own shareholding entitlement. I would hope the documentation will be able to be issued to shareholders in the next two months.

We do know that Zhongying have a number of orders with European countries for their plant. We know there will be a need to raise funds for their projects and these will be substantial amounts. These are expensive major capital projects. So fundraising per se will be an important aspect of the biomass business.

Q. What about from the Chinese point of view? Would we be a funding platform for our JV partners?

A. It has taken me many trips to China and many meetings to develop a relationship of mutual trust with our Chinese partners that was non-existent with previous management of your company. So we have reversed what was a very difficult situation. Our Chinese partners have their own regulatory and compliance issues in China and they needed to clean up the balance sheet and shareholding position of the joint venture. Yes, perhaps we might prove beneficial to them and be able to help the business from a financial point of view. There are no formal documents in relation to those discussions, no promises and no guarantees but it is possible and this journey could be interesting and worthwhile and your directors are minded to that point of view.

Q. Are there any patents on the biomass plant or process?

A. I was told by the chairman, Mr Chen, himself that the whole process has been patented worldwide. We have not done a detailed engineering validation of the Zhongying biomass business and this is a question of degree and a step-by-step approach. Now depending on the direction our company takes more technical due diligence will be required especially if there are further future fundraisings.

Q. Is the joint-venture quoted?

A. No. One of the major part of the group is quoted. As to the value of the business, we have been sent accounts as a gesture of goodwill by our partners (because we could not call for those accounts until our shareholding had been regularised) and those accounts support our 20% interest having a proper value. I have no particular view on the relative outcomes of Chinese accountings compared to those of our auditors, Moore Stephens. Valuation generally is one of the risks for your board and for all shareholders to bear in mind.

Q. Does Zhongying have substantial landholdings as part of the group?

A. We saw the plant and it is situated on a substantial amount of ground and parts of the group we understand do have landholdings. However, land development or trading is not the joint venture’s core business which is bio-energy.

Q. Is there a name for this technology and have we had specialist technical reports commissioned yet?

A. In this round, where our major shareholder is underwriting, we are not aspiring to that level of technical due diligence for now, no. But for our future activities, with fundraising, I am convinced that we will need more detailed technical due diligence and more information will flow. Everything is going forward on a step-by-step approach. For me it has been important that I have kept my promise to our shareholders that if they wanted to leave they could leave and a lot of them have done that. Now those who remain are perhaps more interested and mindful of a possible future for the company. If I have got it wrong and we find, contrary to the accounts that we have seen, that there is no real value in the business then we will know that soon enough.

Q. Is Richpoint a shareholder in Zhongying?

A. We are not aware of any such shareholding.

Q. There are 18 months or so left of our supervision under the Takeover Code. Will there need to be a whitewash?

A. Yes.

Q. So, is it that our underwriter and major shareholder is taking the lead as it were and is a good steer perhaps for us because they are in the region closer to the company and may have done their homework on the company?

A. Yes, you might say that.

Q. Do we have information on Richpoint?

A. They are an investment company run out of Singapore and this is one of their investments.

Q. A simple call to the Patent Office could check the patent position from a due diligence perspective, couldn’t it?

A. Indeed and we have done that. There are several dozen worldwide patents that exist and are registered in the name of Mr Chen but we haven't done a further detailed technical analysis to match up those patents, for instance, with the processes at the plant that we visited.

Q. How much is being raised?

A. We envisage £6 million will be raised of which £4 million will be spent immediately to regularise our shareholding: £3million to pay the principal debt and £1million of interest, penalty costs and fees.

Q. What is the extra £2 million for?

A. If we are to build a future with Zhongying, including fundraising, we will need more money.

Q. This is on top of our existing assets. Is there a value of the asset?

A. We have for the first time been able to value our stake in Zhongying on a Fair Value basis in the 2015 Accounts in Note 12. We have used the audited financial information we have received from Zhongying to derive a value and then we have applied a hefty discount of around 50% to reflect that the joint venture still has 19 years to run through to 2035. That current valuation is at £13.6 million with a £4 million provision as the other entry. Over the next few months perhaps we will be able to refine the valuation further.

Q. We have £3.9million cash and are adding £2million against our current burn rate of around £7 to £8 hundred thousand. Is that the price of Richpoint’s dilution or do we need that much money to run the business for the next 5 years?

A. There is sense in building cash reserves at this time which could be of benefit in the future and especially as Richpoint is prepared to underwrite the £6 million fund raise now. I cannot quite give you a vision of the future but all sorts of scenarios are possible: fundraising, reverse takeover, participation by us in projects with the joint-venture, or whatsoever which might need more money than we currently have remembering that we have to settle this debt with our joint venture partners. Having 20% of something of real interest may prove of real benefit and I do not want us to be in a position in two years’ time when we are presented with those opportunities but we have to ask our shareholders at that time for more funds in order to take advantage. That would be a more difficult journey. Again, we have given those who wish to sell their opportunity to sell which they have taken. Now, what we are trying to do is give all our shareholders options for themselves to decide on whether to participate or not and if they decide against there is no real penalty in taking that position.

Q. Did Richpoint want to take over LAC at its weakest point?

A. There were very strong feelings between your previous boards and the various parties. No one was working together as between your past boards and our major shareholder and joint-venture partners. It has been rewarding and rather amazing actually that in building trust, which is our approach, we have been able to find a different way forward that hopefully is a win-win for all concerned. I have found that the Chinese are straightforward business people and they are simply interested in the business and being successful.

Q. Will the directors participate in the fundraising?

A. No directors are shareholders.

Q. I personally like to see directors have skin in the game.

A. Our shares are not traded. If there were an opportunity in the future then I would participate.

Q. Do you not hold shares through the EBT?

A. There has been no allocation of shares by the EBT of the shares it has purchased. It is a matter for the independent trustee in the future, when there is any value in the shares, as to how they will be distributed. We are employees of the company and therefore as a class we can benefit from the EBT but there have been no allocations made by the trustee.

Q. Will the EBT participate in any fundraising?

A. That is a matter for the independent trustee but I believe the EBT is minded to participate.

Q. Was the EBT set up by the company and with loan finance to purchase shares from selling shareholders, and is the loan finance repayable?

A. Yes that is correct and yes the loan finance is repayable.

Q. I have no problem in key people having a stake and indeed I prefer that but it is better to know who will benefit and to what degree. No one can object to that when we have seen the value of the shares going up from perhaps 1/2p on a good day to where it is now.

A. It is important to recognise that the EBT was established for proper purposes and the fact that it purchased shares from shareholders is a necessary consequence of course but incidental to its purpose. However certainly going forward if any of the directors or employees do benefit by some scheme where real value has been created for all shareholders then that will definitely be done on a transparent basis. We must take a long view to achieve value to shareholders although it might be earlier and yes I would like to see directors and employees benefit in those circumstances.

Q. So Richpoint will go over 50% shareholding?

A. It will certainly go over 30% and I think it may well go over 50% yes.

Q. What if Richpoint goes above 50% and they could simply try and dismiss the board if relationships were not good. Are they good?

A. Yes, they are good and it is because of that good relationship with Richpoint, in our opinion, that they have agreed to underwrite the funding.

Q. What is Li Jiawei’s relationship with our joint venture partner?

A. Li Jiawei is the legal advisor to Mr Chen. She is not on the Zhongying board to the best of our knowledge. Li Jiawei has proven of real value in the working relationship that we have established with our joint venture partner and she is an excellent addition to our board.

Q. Are we in a position where we may get some recovery from people with whom we are in legal action. How is this all going?

A. The various legal actions are ongoing and there are some indications that some of the people involved would like to enter into discussions with us and those discussions will take place. But if those actions end up in the courts then so be it. Even if discussions take place there is a great deal of interest from shareholders that some very serious questions need answers. We will pursue all these matters but we do also have regard to the time, cost and effort that all this involves.

Q. Will we be able to recover the payments made by the Channel Islands stockbroker to Littlewood’s wife?

A. We did visit the Channel Islands as part of our investigations. The pre-2009 regime, our predecessors, proved unable or incapable to deal with some of these issues that you allude to. It has been difficult for us because they allowed a number of the Channel Islands companies involved to wither on the vine and then be struck off. The process of rehabilitating these companies and then trying to trace where monies have gone is proving very difficult and would be very expensive and time consuming.

As a different example, £3 million was transferred from LAC to one of our Singapore subsidiaries and then lent to one of our subsidiary directors. Then in 2009 that subsidiary voted £3 million of fees to that director to clear off the loan account. We are in the Singapore courts at the moment and we await the relevant past director’s response.

Q. Singapore does have good courts and a higher level of governance than many countries in that part of the world, doesn’t it?

A. It has. That is correct.