Y2KTec says it will be taking legal action against former CEO David Black for alleged misrepresentation after the company posted year-end financial results reflecting a loss of 1.1c a share.
Y2KTec posted revenue for the year to February 2000 of R2.2 million with operating costs of R2.9 million. Consequently, a net attributable loss of R747 000 was turned in for the year, with a loss per share of 1.1c.
In its maiden interim results released in November, Y2KTec reported a turnover of R2.2 million. Net income before tax was R725 000 and attributable earnings came in at R508 000. Earnings per share finished at 0.75c for the period ending 31 August.
At the time of its interim results announcement, Y2KTec alleged that Black had told the board that he had completed software development of the company`s labour rites program and that it would be released for sale in January 2000.
Y2KTec says Black was retrenched at a board meeting convened on 31 January for what the remaining Y2KTec board described as misrepresentation with regard to the status of program development.
The company explains in its year-end results announcement: "Upon reviewing the specifications drafted by Black for the labour rites program it became apparent that he had omitted significant aspects of the program and his co-workers had been misled by him as to the stage at which the development of the software had taken place."
Y2KTec alleges that Black`s actions led it to become involved in extraordinary expenditure and has decided to institute a claim of damages against Black, which the company says will be prosecuted in the High Court in due course.
The company released a profit warning in March along with the announcement that Russell Roth would assume the role of CEO. Roth was on record at the time saying that although the forecast after-tax profit R5.28 million would not be met, the company would still achieve a profit for the year.
Y2KTec anticipates that the labour law program and the Windows version of the Payslyp payroll software will be released within 30 days.
Formed in 1999 and listed in June 1999, Y2KTec has seen its share price take a heavy knock. Having listed at 55c, the share was trading at 3c on the venture capital sector of the JSE today.
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