RE: Mr. Todd Axelrod Proposition I expect that management will re-issue their voting proxy form to include the additional three director candidates names. I assume the dissident shareholder may also issue a proxy circular to explain how he intends to create value where the current board has done nothing but destroy value, year after year after year. But I could be wrong. Technically, the dissident shareholder has not yet solicited our vote, so he may not need to issue a proxy circular.
I have a hypothesis about what has been unfolding in the background at Diagnocure. When the Signal problem was disclosed in September 2012, I wrote to the Board (as I disclosed in a post here) to ask them to reconsider continuing to invest in new tests. This is because the tests take a long time to develop and get approved, then face the possibility nobody wants to buy the test when available. I feel Fradet is running this company as a charitable medical research fund. He earns a big salary for doing what he loves. He will spend all the royalty income from PCA3 to fund new product research. Shareholders will never see a dime of profit. As expected, the company did not reply to my note.
There was a Board of Directors meeting on October 25, 2012. I know because the Board approved the wording of the AIF (which discussed extensively the settlement with Signal that wasn't finalized until January 2013). I think the Board also had a very heated discussion about the future direction of the company. Fradet wanted to continue as is, while some of the directors (I suspetc) wanted to terminate questionable development activity. My hypothesis is they had a vote and Fradet won. I think that is why two directors quit ("retired"), not because they "wanted to make way for new blood" or "focus on other interests". According to insider reporting records, Alain Michel and Marion Thomas ceased to be insiders on October 25th. A third director, Paul Gobeil, ceased to be an insider on November 26, the same day that Fradet announced that three directors retired and two new ones joined the Board.
If Fradet wants to continue the way things are, he could always make a takeover offer to take the company private. Or he could form a new private company and buy the undeveloped tests for lung cancer, etc.. Or he could merge with a larger profitable company to use up his tax loss carryforards. But what I cannot accept is him continuing to run a non-profit organization and paying himself a big salary with us shareholders getting nothing. This situation is unacceptable.
This company has 10 cents per share in cash. It also had another 33 cents per share in tax shield from loss carryforwards, not counting the loss in fiscal 2012. PCA3 will some day be very big. Unfortunately, to capture all that value, we need to take it away from Fradet, or we will never see it.
How difficult can it be to run a company that collects one royalty cheque every 3 months? How much expertise and experience by directors does that take?