Ladies & Gentlemen –
It is with disappointment that I forward this press release to you that was released by the Company. The opinions expressed in this email, are mine and mine alone. I find it a blatant, egregious move by certain members of the Board to take these actions. Despite the fact that a vast majority of CVR Medical’s shareholders overwhelmingly approved the provisions contained in the Company's Circular provided to all shareholders where they state:
- The details of the matters proposed (listed above) to be put before the Meeting are set forth in the management information circular, which was mailed on January 22, 2020 and is filed on SEDAR. Proxies should be either voted or received no later than close of business February 10, 2020. Current Executive Officers, Directors and several former Executive Officers and Directors who the company continues to speak with about rejoining the company are all planning to vote in favor of all the matters listed above. If, for some reason, you have not received the Proxy material to date, or have any other questions about how to make sure your vote is registered, please contact Dallas Hack at dallashack@cvrmed.com or myself.
As also noted in the press release the Company reported the results of the AGM:
- CVR Global Inc. ("Global"), as well as a limited number of other shareholders, voted against setting the number of directors at three. In addition, Global and other shareholders withheld their votes in regards to the appointment of Dale Matheson Carr-Hilton Labonte. As previously announced, Global’s interests are not necessarily aligned with the Company as we continue to negotiate a restructuring agreement (the "Proposed Restructuring") with Global.
- All of the matters to be voted on at the Meeting were approved by a majority of shareholders. There were 80,922,820 shares voted, representing 64.03% of the total shares outstanding. The percentage of votes cast in favor of each matter are as follows:
- Number of Directors – 57.40%
- Dallas Hack, M.D. as Director – 99.61%
- Paul Blunden, M.D. as Director – 99.95%
- Phil Bendick, Ph.D. as Director – 99.95%
- Appointment of Auditors – 57.46%
- Re-Approve Stock Option Plan – 96.50%
- Other Business – 95.85%
Despite their statements highlighted above which stated their support for all of the provisions contained in the Circular, and 57.40% of the shareholders all voting in favor of setting the number of Directors at three, a certain newly appointed Officer and Director have gone against the will of the majority of shareholders and obviously shortly after the AGM was held, called a Board Meeting and nominated and ratified Joseph Lynch as a Director and Dr. Paul Blunden to serve as President. So now the CVR Medical Board of Directors is controlled by a significant stakeholder who despite his claims he is just a shareholder of Global, according to the CVR Global website, had him listed as a Medical Advisor on numerous pages and where he provided his glowing testimony and also listed Joseph Lynch as VP of Operations. In the press released (attached) by the Company, it details their ownership and various roles in Global.
Despite the strong objection of the Company’s counsel, these individuals feel that they can circumvent the will of the shareholders with these egregious actions. It is my opinion that this further exasperates the much detailed conflicts of interest, related party transactions and common control issues that have kept the Company’s common stock halted on the Exchange. More importantly, I ask, what purpose does their appointments serve for the Company? As the company reported in its press release, with the majority of the shareholders overwhelmingly approving all items in the Circular, the Company was in compliance with Regulatory Statues. As was also announced and clearly articulated, CVR Medical and CVR Global interests are not aligned, remain at odds and as of this writing, the Investment Group led by former Officers and Directors of the Company has yet to receive the comments pertaining to the 3rd iteration of the Definitive Agreement and License Agreement which contain the legal language supporting all of the terms and conditions found in the Non Bonding Term Sheet executed by the Investment Group, CVR Medical, CVR Global and the former CEO. With the Board now clearly now controlled by large stakeholders, former Directors and Advisors of Global, as a shareholder and creditor of CVR Medical, I wonder how the interests of CVR Medical are going to be protected.
In speaking with Dr. Dallas Hack, who has loaned and funded the ongoing operations with his personal funds, worked heroically and tirelessly to restore investor confidence, the resumption of trading of the company’s common stock, who negotiated on behalf of CVR Medical’s shareholders, he stated: “While I cannot comment on the internal workings of the new Board of Directors, to state that I am deeply disappointed that these changes have occurred is an understatement.”
In closing, if any of you would like to talk to me or Joel Kanter, about these actions and what they likely signal in the context of a Definitive Agreement with CVR Global still not being in place, we would be happy to do so individually or collectively. Just let me know and I will either make arrangements or get you contact information for Joel so you can be in touch directly. If you would like to be in touch with Paul, Phil, and/or Joe to express an opinion about the New Release, you can reach them at:
Best,
Marc S. Lubow