To drive home the point made in the previous email highlightTo drive home the point made in the previous email highlighted below in yellow, I I have drawn the following analogy which is sadly very apropos. We often see the depiction of the neighborhood “loan shark” in operation and how he functions on TV. Unfortunately this happens in real life too. So what happens is the victim needs say $50.000 for a month and agrees to pay say a high rate of 20% per month interest on the loan. At the end of the month if the victim can not pay the loan plus interest, the loan shark himself redefines the terms of the loan. He now demands that $100,000 be paid by the end of the week plus all the back interest (in our case it is even worse as SALP demand the future unearned interest as well) now at 50% interest per week interest, or his goons will come to collect by force and if unable to collect will crush his knee joints. or worse.
Well in the case of SALP/Thomvest and PLI shareholders this is the closest analogy to draw to what is actually happening but the dollar amounts are very much larger and the theft was given a superficial veneer of the law by the ”hardship” regulation and the so obvious planned usury. The amount of the loan was here greatly increased by SALP and charged up by their predatory actions from the actual loan of $120 Million to $239 million, demand immediately on pain of near total loss of the company to the SALP interests. THEY ISSUED THEMSELVES $15 BILLION HSARES AT 1.5 CENTS. The main difference here is that the “goons” are wearing suits and ties and have law degrees. It is sad that it is possible to plan an actual loan sharking operation in broad daylight under the full scrutiny of the regulators and with a minimal veneer from some obscure (hardship) regulation not meant for cases such as this, can get away with it. Shame on the system that this is even possible in the Canadian markets and no one lifts a finger to correct this egregious misapplication of the hardship regulation not at all intended for this sort of case. The misdeeds on the part of SALP are many, from collusion with the PLI board to act against the interests of the shareholders to whom they have the primary fiduciary duty, use of “hired gun” Echelon to issue false “FAIRNESS OPINION,” lack of disclosure of relevant facts to shareholders, planning for raising funds by PLI to fail as witnessed by the lack of adequate instructions to Lazard to sell even all CORE assets, and not accepting some $40-$50 million in loans offered by shareholders, or not offering a rights offering to shareholders before the restructure to raise funds (**see below more fully), or not using the ATM funding vehicle already approved for up to $50 million and hardly used. This was designed to happen through much improper influence on the board so that attempts to raise funding fail so that PLI fall into the waiting lap of SALP and the Thomvest interests.
I should point out that all of the above sources of capital may have sufficed to bring PLI to the point of commercialization and the start of significant revenue streams. WE ARE NOT EVEN DISCUSSING THE PALTRY FEW DOLLARS NEEDED TO BRING PLI THE MERE COUPLE OF WEEKS FORWARD TO A POINTFOR A QUICKLY SCHEDULED VOTE (AND NOT POSTPONED) ON THE MATTER THAT WAS SHAREHOLDERS RIGHT!! THE ATM FACILITY ALONE COULD HAVE EASILY PROVIDED THIS SMALL FUNDING. THERE WAS NO HARDSHIP EMERGENCY! IT NEVER EXISTED! THIS WAS A TOTAL FRAUD AND MISREPRESENTATION TO THE TSX IN THE SO CALLED HARDSHIP APPLICATION!!! THIS RESTRUCTURE WAS TOTALLY BASED ON THE HARDSHIP APPLICATION’S ABILITY TO AVOID A SHAREHOLDER VOTE WAS TOTALLY FRAUDULENT AND MUST BE OVERTURNED AND ALL THAT SPRUNG FROM IT.
PROTECT THE CREDIBILITY OF THE CANADIAN SECURITIES MARKETS. THE IMPLICATIONS FOR THE FUTURE OF THE CANDAIAN MARKETS CAN NOT BE IGNORED OR OVERESTIMATED. THEY WILL JUSTLY EARN THE REPUTATION OF THE UNRULY WILD WEST WHERE THE RICH AND POWERFUL DO WHAT THEY WANT AND TRAMPLE OTHERS UNDER FOOT WHILE REGULATORS TURN A BLIND EYE. A RIGGED SECURITIES MARKET WHERE THE SMALL INVESTOR DOES NOT STAND A CHANCE AS THE REGULATORS MAINTAIN A BLIND EYE AND DO NOT REGULATE.
Note ** - If the rights offering to shareholders would bring in $75 Million, or could have been much more, some $225 Million, if not CAPPED by SALP, after the restructure, to PERHAPS recoup a little of what share holders lost via the restructure, imagine what such a shareholder’s rights offering could have raised if done EARLIER to avoid a restructure and explained as such to prevent the alternate consequences!
This was never even discussed, let alone attempted by SALP or the board and management!
Sincerely,
.......................
PLI long time investor..
From: hank Sent: May 17, 2019 9:18 AM
To: hank Subject The Fraudulent and Illegal Restructure by Prometic/SALP Investorsin Prometic Life Sciences (TSX:PLI) were illegally denied their mostfundamental right to vote on a restructuring
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User Actions May 17, 2019 - 02:43 AM 54 Reads
Post# 29754410
Letter to AMF, TSX, Politicians, Media
FEEL FREE TO USE MY LETTER BELOW:
The Fraudulent and Illegal Restructure by Prometic/SALP
Investors in Prometic Life Sciences (TSX:PLI) were illegally denied their most fundamental right to vote on a restructuring plan that obliterated their equity from 97% to 3.6% of outstanding shares. This restructure subsequently wiped out the retirement savings of thousands of Canadian retail investors, to the sole benefit of Structured Alpha LP (SALP) - a division of Thomvest, which is owned by the wealthiest family in Canada, the Thomsons. The Thomsons also own the Globe and Mail, and many other investments, with a total wealth that is estimated at over $40 Billion.
SALP is a private corporation registered in the Cayman Islands. With its high-priced lawyers, SALP found a loophole to evade paying Canadian taxes, and to conduct their illegal financial transactions in secrecy from the Canadian Government. SALP’s lawyers also found a loophole in the TSX called an “emergency hardship” to takeover a company, and wipe out existing retail shareholders without the shareholders having a say.
SALP’s Stefan Clulow sits on Prometic Board of Directors. His objective is simple – make a MASSIVE profit, and wipeout retail shareholders. Most of the Board members, including Kory Sorensen, Nancy Orr, Raymond Hakim, Andrew Bishop, Pierre Laurin, and Bruce Wendel were overthrown during 2018-19. With only five Directors remaining, retail shareholders did not get a say in replacing their board members. Clulow became a ‘dictator’ and had full power over the board. He seized the opportunity to make a massive profit, and wipeout retail shareholders. Even though Clulow had previously promised to ensure the cash runway until the commercialization of Ryplazim was complete, he cut-off loans to Prometic to create an “emergency hardship”. Prometic’s Debt to SALP is $120 M.
Back in November 2018, SALP portrayed themselves as the good guy, supportive to Prometic and its shareholders. SALP extended the debt to 2024 to further portray themselves as supportive. We found out on April 15, 2019, when the restructure was announced, that the actual purpose of extending the debt was to DOUBLE the repayment of the loan amount from $120 M to $239 M a few months later through UNEARNED interest – extremely predatory and deplorable! The few remaining Board Members buckled to serve the interests of SALP, discarding their fiduciary duty to the shareholders. On top of the $119 M of unearned interest that SALP greedily took during the restructure, they made the promise to make available for issue 3.75 Billion shares, worth $57 M to several key people who did their bidding (Page 13/14 of Management Information Circular on Sedar) – absolutely appalling! TSX granted Prometic an “emergency hardship”. WHAT HARDSHIP?! SALP immediately took a massive cash grab from Prometic of $176 M ($119 M unearned interest plus $57 M in stock compensation) for themselves after TSX blindly granted them a hardship.
On April 2, 2019 Echelon issued a hold rating valuing Prometic shares at 25 cents. Twelve days later on April 14, 2019, Echelon issues a “fairness opinion” to the Special Committee of Prometic for the 1.521 cent value – a 91% discount to the already half-cut share price – chosen by SALP interests for the debt conversion and restructure. The notion of the restructure was known by Echelon on April 2. When Echelon was consulted a few days later, Echelon abruptly alters its value of Prometic shares to 1.521 cents to receive A LARGE FEE FOR THE NEW “FAIRNESS OPINION”! Shameful! The AMF must investigate how large the fee was.
SALP has only been involved with two other companies besides Prometic – Axcient and Avalanche Technology. For all three companies, SALP’s well-thought out fraudulent plan was the same:
- Loan the company money on the condition of using the company’s IP for collateral for the loans.
- With the IP as SALP’s collateral for the loans, this prevents partnerships from getting completed.
- Drive the company stock price down.
- Cut-off additional SALP loans for the company.
- Takeover the company for a massive profit, and obliterate retail investors.
- Privatize the company to bury all the data to the public:
- on how horrendous SALP’s actions are
- how massive the profits are that materialize for SALP/Thomvest
- how huge the theft from retail shareholders is
This will all be hidden from the public and Canadian government by the inability to access the information from a private corporation registered in the Cayman Islands. The TSX regulator turned a blind eye, but the AMF has the opportunity to show they are a strong regulator for Canadian security markets. Prometic is a much followed and very promising stock. Therefore, many eyes are watching what happens. The governance of Prometic failed; however, the governance of the Canadian security markets can prevail.
The AMF should deny the emergency hardship, and reverse the restructure back to the original 740 Million shares (not some 20 Billion shares). Freeze all transactions that further the restructure plan and order that a judge be appointed to supervise the company under the CCAA and that the judge stay any execution of the lien and reinstate the debt amount to the $120 M actually due and provide the time needed to supervise the raising of funds to payoff the SALP loan and funding of the operations of the company to commercialization through financing now possible under the court, ahead of the lien or through sale of the various non core real estate assets or if necessary through sale of some or even all of the very valuable core assets. Under a fair judge, there is no need or reason for an emergency hardship!
There never was a hardship. SALP’s lawyers used it as a loophole to bypass the retail shareholders vote. In previous years, the Annual General Meeting (AGM) was always held in this timeframe, but SALP chose to postpone the AGM this year in order to deny the shareholders their vote via the absolutely unfair hardship application made in BAD FAITH by the management.
The AMF should investigate the huge delay to cure the Chemistry, Manufacturing and Controls (CMC) issue at the Food and Drug Administration (FDA) on the Ryplazim trial approval, initially presented to shareholders as a few months, and how that delay grew to 2 years. This may have been tailor made to put Prometic in a pinch, and exhaust its cash runway in order to justify the eventual hardship process. The rapid cure and success of Ryplazim approval was against the interests of the SALP desire to takeover (“restructure”) Prometic for their own massive profit. All the details surrounding the non-disclosure of the complete response letter from the FDA, and the details of why the cure to the CMC takes very long requires thorough investigation. There must be something Prometic/SALP is hiding not to share these details with shareholders.
The AMF has a duty to act right now and regulate the situation – subpoena individuals and investigate the fraudulent activities being perpetrated on Canadian retail investors by a Cayman Islands company. It is clear that this plan was in action since November 2018, when SALP extended the loans to 2024, and probably it was being carefully planned by SALP for many years.
Sincerely,