Subj: CARN, my Albatross
Date: 97-02-10 10:21:13 EST
From: Seapowerin
To: CYLees
hello, thanks for the compliment. I raised 2.75MM for CARN in 1990 and
1991(when they spent the first round) from High Plains Baptist Hospital.
That's where Dale Bowerman came to the board from. I have no relationship
with them now and haven't seen the S-3 but I can just imagine. The 'new'
management after Clint Howard tried to cheat me out of the fee for the second
round, a convertible debenture for $750,000 but I had a good partner who
wrote very strong contracts. Karl Meister, regardless of his other good
qualities, gave it a try anyway. I had him call his former boss Mr.
Ladenburg, after I took him to lunch, to verify industry policy on second
round financing fees. It was one of the funnier moments in my career. I was
given 10,000 restricted five year warrants @19 in 1990 which I asked
Management to extend, as they did for themselves, in 1996 when they were
about to expire. They refused which maked me a little bitter when the stock
ran up to 50!
On the positive side my Mother overcame stage 3 ovarian cancer in 1992 with
the help of Dr. Reg McDaniel and Carrington's then product. I'm a little
confused as to why the tests foe Ulcerative colitus were not favorable, I
know it is very effective on UC.Perhaps they have focused on the wrong
'fraction' as mentioned in one of the posts.
The current management seems to lack integrity. They signed a contract with
Mannatech in May of 1994(which helped run the stock up, look at the chart
from 10 the day the contract was announced) for exclusive rights to Manapol
but have consistantly broken the spirit of the contract by selling it out the
back door to others in bulk. They have now come up with somthing called AVMP,
which they blantanly use to get around the contract, even though it is
covered under the same patents as Manapol. Selvi Vescovi seems to be out to
lunch, a nice guy but doesn't do anything for Carrington. An empty suit.
After he had been chairman of the board for six months I asked him at an
annual meeting if he would have lunch with a money manager in Grand Rapids,
Bob Burnham (3 Billion in assets) who I had been trying to convince to buy
Carrington. Selvi said " I don't know enough about the company to do
that"-this was after six months as CHAIRMAN!
Bill McAnally has joined me at Manntech, along with Eric Moore and Eileen
Venable, and recently came up with <A HREF="http://mannatech-inc.com/Ambr.htm
l">Ambrotose</A> < which gives Mannatech freedom from Carrington's Manapol
dealings. It is a brilliant improvement on Manapol for Nutritional uses and
as far as I am concerned, it serves Carrington right.
The only thing I see in the near future for Carrington is trying to take
advantage of the dental patch product that we pioneered for them at
Mannatech, and possibly some news on the cancer tests. I wouldn't short the
stock at this point because they will probably have some hype over these in
the near future.
It sounds like you are in at a fairly good price and you might see a run up
into the teens again, but I wouldn't hold the whole position much longer than
the mid teens. Bronstein at Hoak Securities said, without UC approval CARN
was worth "about $10 per share" . This is dependent on them increasing
existing revenue sources, which they don't seem to be doing. They have priced
themselves out of the moist wound healing market, a market they created. Most
hospital only use the wound gel in emergencies (Baptist Hospitals of Miami).
Tom Marquez is a good man and he has a ton of his own money invested so I
wouldn't count them out, it just seems to have missed too many opportunities
in the past to think they will suddenly make the right moves.
Good luck and e-mail me anytime,
Les Clements |
