PTK: all valid comments, and thanks for taking the trouble to share with this thread. However, my concerns are more to do with
- can we afford to be making these types of mistakes, when we need the funds planned for under the RO and
- everybody out there in the real world must have given up on this being a real company. Who is gong to deal with it, whether that is for financings, NASDAQ listing, distributorship deals, legal actions in the UK (I just hate to think, have mistakes of law (UK law) been made there, in the Provalis deal, too?).
I share the following letter I have sent to Rene( not expecting it will get beyond his screen, but, never mind). Fox.
March 11, 2003
Dear Mr. Ho:
I refer to the Investor Relations email which I received, dated March 8, 2003, and which was identified by the subject matter which I repeat above, namely <Re: Dimethaid rights offering application continues>.
I write this communication, for the attention of Mrs Keeler, as senior officer of the company and also for the attention of the Board of Directors.
I am a long time investor (since 1998) in this company, Dimethaid ("DMX").
This matter of the delay in the company's Rights Offer is intolerable.
What concerns me most about this development are the following:
1. It is my understanding that Ernst and Young CA's resigned as auditors, in part, over a difference of opinion with management, as regards the carrying value of the original 20% investment in OXO. This was back approximately four years ago. DMX then replaced them with a third tier CA firm. In other words neither an international, nor a national CA firm, but a small, provincial one. It seems that, in order to have her way with her auditors ( and I don't mean in the biblical sense) Mrs. Keeler was prepared to hire auditors who now appear to be under qualified to deal with Securities Commission matters. Early in my professional career, I used to manage Canadian and SEC Securities Prospectus audits, so I appreciate the quibbling that can go on, over the correct definition of what is and is not GAAP. However, in my opinion, a major CA firm would not let matters get this far out of hand. Furthermore, Mrs Keeler and the Board were aware, as early as 1999, of how contentious an accounting issue it was, of the method of computing the carrying value of the investment in OXO Chemie AG. It appears to be the height of negligence, now, for none of the auditors, Mrs. Keeler, nor the members of the Board, to have resolved this issue, to the satisfaction of the Ontario Securities Commission("OSC"), BEFORE making the regulatory filings in January 2003.
2. Mrs. Keeler represents herself to be a competent Senior executive, In addition, she is a lawyer by profession, maybe not a securities lawyer. However, she should not have let the ball drop, on this one.
3. The resulting delay, may or may not be critical or even fatal, to the company. I do not know. However, this does nothing for the professional market players' perceptions of what DMX is, (in other words, as one pundit on SI described it - 'a mom and pop operation'). How do the Management and the Board plan to represent themselves, in any future negotiations of ANY type,having made much a public incompetent error as this?
4. I am furious at the Mickey Mouse financial planning that has been going on at this company. Mrs Keeler made the decision to not seek additional equity financing from Acqua, at a time when the stock could have been issued at six dollars a share, instead of the paltry amounts she has been forced to accept, during the past 5 months. Mrs Keeler has further compounded this erroneous management decision by relying on (a) short term loans and (b) on a Rights Offering, to finance the company's ongoing operations until such time as funds are generated by commercial sales and a distribution agreement for the USA, for PENNSAID. It now appears that she and the Board were negligent in preparing for the submission of this Rights Offering to the OSC.
I submit that the Board should request Mrs Keeler to resign her management positions in an orderly fashion and that it seeks a competent replacement(s).
I will support any efforts to implement this proposal, including seeking replacement of any member of the Board who fails to act in the best interests of the shareholders of this company.
Yours,
21CFOX |
