Bruce,"HVSF". I like that " $25000 slush fund " paragraph.Also, whi is this Barbara Krillich who gets to be the treasurer, gets 500000 shares AND a $120000 salary/year!!!
I normally don't read Edgar cause mine eyes glaze over, but this sounds like " As Erectile Dysfunction Turns " soap opera: HVSF ElPresidente Waite, fallen out of favor CEO-guard -the checkbook-Walker and in with Barbara-500000 shares-$120000salary-newtreasurer to guard and protect HVSF checkbook........mine.Stay tuned folks for next week's new and exciting episode of " As Erectile Dysfunction Turns
TA
**************************************
TYPE: 8-K SEQUENCE: 1 DESCRIPTION: RESIGNATION OF DIRECTOR
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of The Securities Act of 1934
Date of Report (date of earliest event reported): December 24, 1997
HARVARD SCIENTIFIC CORP.
(Exact name of registrant as specified in its charter)
Nevada 0-28392 88-0226455
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation) 100 North Arlington Avenue, Suite 380, Reno, Nevada 89501
----------------------------------------------------------------------
Name: Thomas E. Waite
Title: President and Director
December 24, 1997Item 6. Resignations of Registrant's Directors.
On December 24, 1997 Alexander H. Walker, Jr.'s ("Walker") letter dated December
23, 1997 ("Letter") resigning as a director of Harvard Scientific Corporation
("Registrant") was delivered to Thomas E. Waite ("Waite"), Chairman, President
and Chief Executive Officer of the Registrant, and to the other director of
Registrant, Dr. Jackie R. See ("See"). The Letter contains numerous statements
by Mr. Walker. The Letter and its attachment, a press release on behalf of
Registrant dated December 11, are stated to be "my written description of my
disagreement...". Pursuant to Walter's request, this matter is disclosed in this
Form 8-K and the Letter, including its attachment, is an exhibit hereto.
As a result of the foregoing, Walker confirmed his resignation as a director of
Registrant on December 24, 1997 and made demand for disclosure effective that
date. While Registrant believes Walker effectively resigned through oral tender
of his resignation and its acceptance on December 3, 1997, solely for purposes
of this Form 8-K and the disclosures required and permitted by such form, the
date of receipt of the written resignation on December 24 1997 is accepted as
the date of resignation.
Set forth below are summaries of Walker's descriptions of the disagreements.
Because of the extensive listing of disagreements, reference is made to the full
text of the Letter. Following each summary of a disagreement there is a
statement by Registrant presenting its views of the disagreement indicating the
aspects of the description provided by Walker that it believes are incorrect or
incomplete. In an attempt to be brief, the omission by Registrant of a statement
of any particular incorrectness or inaccuracy of a disagreement by Walker is not
a waiver of Registrant's right to hereafter assert the incorrectness or
incompleteness of any such description by Walker. The paragraph references are
to the paragraphs of the Letter, the paragraph numbers having been added to the
Letter for ease of reference.Paragraph 1.------------
Walker states that management does not desire his participation as a director,
that he is effectively excluded from decisions of the other directors and that
he disagrees with decisions made by management as to the running of Registrant
and as to disclosures to Registrant's shareholders. Registrant believes that
Walker, by affirmatively refusing to attend the most recent meeting of the Board
of Directors of Registrant on December 11, 1997 either in person or by
conference telephone, of which he was given due notice even through Registrant
believed he had effectively resigned, voluntarily has excluded himself from
decisions of the other directors. Registrant believes that information has
properly been disclosed to its shareholders.
1Paragraph 2.------------
Walker states that Waite improperly obligated Registrant to issue 100,000 shares
to Kostech Data Corporation. Registrant believes that it was previously
obligated to issue such shares, that Waite was specifically authorized by the
Board of Directors, including Walker, to arrange a settlement with Kostech Data
Corporation, and that Waite arranged a settlement on more favorable terms to
Registrant that its previous obligation.Paragraph 3.------------
Walker states that Waite did not accept the form of employment agreement between
Waite and Registrant that Walker drafted and that the version prepared on behalf
of Waite contained provisions significantly different from those contained in
the version prepared by Walker at the instructions of the Board of Directors. In
particular Walker objects to the automatically renewable nature of the agreement
and the ability of Waite to move Registrant's offices to where Waite lives,
strengthening Waite's exclusive control over Registrant. Walker objects to
Waite's service to Registrant without an executed employment agreement.
Registrant believes that the arrangements involving Waite are reasonable and
proper; that, in fact, the agreement is renewable at the option of the Company,
so that it is not automatically renewable; that the principal office of
Registrant remains in Reno and that the office in Florida was an appropriate
convenience office for Waite near his antecedent residence and that the
arrangements with Waite have been approved by Registrant and will be reflected
in an employment agreement to be placed in final form after more pressing
matters are attended to.
Paragraph 4.------------
Walker states that Waite requested
a check for $25,000 for a slush fund
for expenses which Walker refused to give
absent verification as to how the funds
were to be spent.
Registrant believes that Walker's characterization of the
$25,000 is inaccurate, that the $25,000 was designed to fund a local bank
account in Florida that was being established in connection with the Florida
office as is normal for a satellite office, that the term "slush fund" was never
used, and that the expenditure of the $25,000 and any replenishment thereof will
be fully accountable, as will be the expenditure of all other funds of
Registrant. 2Paragraph 5.------------
Walker states that Waite called him on December 1, 1997 concerning the
appointment of Barbara Krilich ("Krilich") as Treasurer of Registrant, that she
would control Registrant's check book and have particular terms of employment
and the he inquired of Waite if Krilich's appointment had been approved by See,
which approval Waite confirmed. Registrant believes that the 10:00 P.M. Eastern
Standard Time call was a conference call including Krilich as well as Walker and
Waite and that there was no indication from Waite or Krilich that Krilich had
been appointed Treasurer (which she never has been).Paragraph 6.------------
Walker states that he contacted See on December 2, 1997 about Krilich's
appointment, that See indicated that he had not heard about the matter prior to
being called, that the appointment of Curtis Orgill ("Orgill") as Treasurer had
previously been approved by the Board of Directors of Registrant and that Walker
understood that See agreed that Registrant would honor its commitment to Orgill.
Registrant believes Walker evidently was confused as to the arrangements
involving Krilich and Orgill and notes that Krilich currently is Secretary and
Chief Operating Officer of Registrant and Orgill is Treasurer and Chief
Financial Officer of Registrant.Paragraph 7.------------
Walker states that when Waite called him on December 2, 1997 he expressed to
Waite his opinion that Waite had misrepresented to him Dr. See's approval of
Krilich's appointment and that Waite had lied to him and that he no longer could
trust Waite. Registrant believes Walker did express himself in extraordinarily
strong language and notes that Walker, as a director of Registrant, had in
November approved Waite, whom he had know for some time, as Chairman, President
and CEO of Registrant.Paragraph 8.------------
Walker states that on December 3, 1997, See called Walker to indicate that Waite
could raise $12 million for Harvard but only if Walker resigned as an officer
and a director and if the Nevada Agency and Trust Company ("Nevada Agency"), of
which Walker is a principal, was replaced as the transfer agent for Harvard's
common stock. Walker agreed to do so if the $12 million transaction was real and
if a suitable severance agreement could be put in place. Registrant believes
that Waite had concluded that Walker would present a big problem to Registrant,
in part based on reports from Krilich as to her
3
dealings with Walker on December 2, 1997 and Waite's own conversation with
Walker on December 3, 1997; that Waite did not want Walker's continuing
involvement with Registrant independently of the proposed $12 million financing
and that when See indicated these facts to Walker on December 3, 1997, Walker
tendered his oral resignation as a director to See.Paragraph 9.------------
Walker states that on December 4, 1997 See and Waite held a purported meeting of
Registrant's Board of Directors at which See wrongly represented that Walker had
resigned as an officer and director, wrongfully filled Walker's positions with
Registrant and wrongfully terminated Nevada Agency as Registrant's stock
transfer agent. The meeting was held without notice and was invalid. Registrant
believes that the meeting, which was held on December 3, 1997 following Walker's
oral resignation, was valid because all the remaining directors waived notice of
the meeting and thus the actions taken at the meeting were valid. Registrant
notes that in any event it is irrelevant whether or not the meeting was valid
and the actions then taken were proper, since at the subsequent properly called
meeting as to which there is no dispute as to proper notice, the actions taken
at the December 3, 1997 meeting were ratified and no proper rights of other
persons were adversely affected during the intervening period.Paragraph 10.
-------------
Walker states that when he learned of the invalid meeting he took steps to
protect Registrant's assets by hiring counsel and being prepared to seek
judicial intervention to follow proper corporate formalities. Thereafter the
directors properly noticed a meeting (held December 11, 1997) to take all
actions they wished to legally take, which second meeting indicates that the
earlier meeting was invalid and that Walker had not resigned as a director at
that time. Registrant believes that Walker's actions were not designed to
protect the assets of the corporation. Walker wrote checks on corporate funds on
December 4, 1997 to Nevada Agency, of which he is a principal, and to himself,
and on December 5, 1997 to Ross E. de Lipkou to represent the shareholders
against Registrant when Walker was a director of Registrant and now claims to
have also been General Counsel, Treasurer and Secretary. He wrote no other
checks after December 3, 1997. In addition, Walker indicated that he had sent
the notice of the December 11, 1997 meeting of the Board of Directors with his
comments thereon to the principal creditor of Registrant, which Registrant
believes can not be beneficial to Registrant and could be detrimental.
4Paragraph 11.-------------
Walker states that he has been given no documentation confirming the $12 million
infusion of funds to Registrant, which documentation should be made available to
all board members, and objects to action without confirmation of the obligation
to put $12 million into Registrant. Registrant regrets that Walker has seen fit
to make public negotiations concerning proposed financing by Registrant and
believes that the ongoing directors of Registrant will remain fully informed
concerning Registrant's financing possibilities.
Paragraph 12.-------------
Walker states his opinion that
under Waite, Registrant's assets are being
dissipated and that Krilich's appointment
and salary are unnecessary in view of
Orgill's previous employment. Registrant believes that, with the assistance of
Krilich and Orgill, the assets of Registrant are under materially improved
control, that the services of Krilich and Orgill are complementary and that the
employment of both at this time for their respective compensations is in the
best interests of Registrant.Paragraph 13.-------------
Walker states that termination of Nevada Agency is a breach of the 90 day notice
provision in its agreement with Registrant and violates Rule 17 Ad-16 of the
Securities Exchange Act of 1934, which requires a transition period of 10 days.
Registrant believes that if is in Registrant's best interest to terminate Nevada
Agency as its transfer agent forthwith. Registrant notes that Rule 17Ad-16 does
not provide for any transition period but merely provides that Nevada Agency
give specified notice when it is terminated as transfer agent, which Registrant
assumes Nevada Agency will give, if such notice is required. In all events
questions relating to termination of Nevada Agency as transfer agent may be moot
since Registrant believes arrangements are being made with Nevada Agency for
transfer of its functions as transfer agent to a successor transfer agent.
Paragraph 14.-------------
Walker states that Registrant is not disclosing material information to its
shareholders, citing the current audit of Registrant's Phase I testing of its
principal product by the Food and Drug Administration. Registrant believes that
such an audit is in the normal course of business, particularly when, as in this
situation, there is a request to interface Phase II and Phase III trials.
Registrant believes that proper disclosure to shareholders has been made in all
cases, at least to the extent legally required.
5Paragraph 15.-------------
Walker states that the attach to the Letter, which is a press release dated
December 11, 1997 could be construed as misleading since it does not refer to a
particular case pending in California. Registrant notes that the California case
is not a class action, to the non-existence of which the press release refers,
and that the California case involves the transfer of the Registrant's stock in
the particular circumstances of the case rather than the more broadly applicable
questions that are the essence of class actions. As a result, Registrant
believes the press release was accurate as released.Paragraph 16.-------------
Walker states that because of conflicts with management, he can no longer serve
as director, that because of disagreements he resigns as a director of Harvard
and that he requests that this matter be disclosed on Form 8-K. Registrant is
pleased to accept Walker's resignation. 6
ALEXANDER H. WALKER, JR.
Attorney at Law
American Plaza 11
57 West 200 South, Suite 400
Salt Lake City, Utah 84101
Telephone (801) 521-3292
(801) 521-3301 Fax
December 23, 1997SENT BY UNITED PARCEL SERVICE
-----------------------------Dr. Jackie R. See, DirectorHarvard Scientific Corp.
17992 Mitchell South, Suite 100Irvine, CA 92614SENT BY UNITED PARCEL SERVICE
-----------------------------Thomas E. Waite, President and Director
Harvard Scientiflc Corp.106 Ridge RoadLake Mary, Florida 32746
Re: Harvard Scientific Corp. ("Harvard")Gentlemen:
1. The events of the last two weeks have made it clear that current management
no longer desires my participation as a director. I have been removed as an
officer and effectively excluded from decisions the other directors make. This
likely is due to the fact that I do not agree with the decisions current
management has made regarding how the corporation is run and what information
is, and is not, being disclosed to the shareholders. I think it is appropriate
to outline some of the items with which I disagree.
2. Most, if not all, of the things with which I disagree have occurred since Tom
Waite was elected president and a director of Harvard last month. When Waite was
elected president, it was understood by both Waite and the Board of Directors
that Waite would report to the board in connection with his duties as president.
Most importantly, it was understood that Waite would not obligate Harvard to
issue shares in connection with any contract without first obtaining board
approval.Dr. Jackie R. SeeThomas R. WaiteDecember 23, 1997Page 2
--------------------------------------------------------------------------------
Within the first week after his
election, aite, without board approval, signed
an agreement with Kostech Data Corporation under the
terms of which Waite obligated Harvard to issue
100,000 shares of common stock as compensation to
Kostech. Waite did not run the agreement by the board
before negotiating the
issuance of shares or signing the agreement, and I expressed my concern with
Waite's actions in this regard in no uncertain terms.
3. Waite also balked at signing the employment agreement drafted by the company
for his employment as president. Waite drafted his own version of the agreement
and submitted it to Harvard. I drafted the company's version per the board's
instructions. Waite's version contained significantly different terms than the
company's version. First, Waite's version was automatically renewable each year.
That is, Waite could remain president and draw his $240,000 per year salary as
long as he wanted. Second, Waite's version allowed Waite to move the
corporation's offices to where he lived in Florida, further strengthening
Waite's exclusive control over the corporations activities. Again, I did not
agree with the provisions in Waite's version of his employment agreement. To my
knowledge, Waite has yet to sign an employment agreement with Harvard. Past
corporate officers have signed agreements and if Waite has not, his situation
represents a marked difference in the company's adherence to corporate
formalities.
4. Shortly after taking office,
Waite contacted me and asked me as Harvard's
corporate secretary to send him a check for
$25,000,which Waite said he
intended to use as a slush fund for expenses.
It was my understanding that
corporate expenses would be reimbursed after they were
incurred and proper documentation regarding those expenses
was submitted. Without board authorization, I refused to
give Waite $25,000 of the corporation's money absent
verification of how the funds were to be spent.
5. Thereafter, Tom Waite called me at home on Monday,
December 1, 1997, at 10:00p.m. and stated that
Barbara Krilich had been appointed as corporate treasurer
of Harvard and that
!!!!!!! she would take control of the corporate check book.!!!!!!!!!!
He also informed me that Krilich would be issued 500,000 shares
of Harvard's stock and
that she would be paid $120,000 per year. I asked Waite if Krilich's appointment
had been approved by Jackie See, the corporation's other director. Waite
informed me that See had agreed to Krilich's appointment.Dr. Jackie R. See
Thomas R. WaiteDecember 23, 1997Page 3
--------------------------------------------------------------------------------
6. The next day, Tuesday, December 2, 1997, I contacted Jackie See and asked him
about Krilich's appointment. See told me that he had not heard about the matter
before my call and that he had not approved Krilich's appointment. The situation
regarding Krilich was worsened by the fact that the board had approved the
appointment of Curt Orgill as corporate treasurer in a board meeting held on
November 20, 1997. I informed See that Krilich's appointment in place of Orgill
could create liability for the corporation as Orgill had resigned from his
former job in order to accept the position with Harvard per the board's previous
commitment. It was my understanding that See agreed with me and that the
corporation would honor its commitment to Mr. Orgill.
7. I then confronted Waite when he called me at my home on Tuesday, December 2,
1997, with what in my opinion was his misrepresentation about See's approval of
Krilich's appointment. During this conversation, I expressed my opinion that
Waite had lied to me and that I could no longer trust him.
8. On Wednesday, December 3, 1997, See called me at home. See informed me that
Waite had an investor, or investors, who would put $12 million into Harvard, but
only it I resigned as an officer and director. In addition, the $12 million only
would be put into Harvard if Nevada Agency and Trust Company was replaced as
Harvard's transfer agent. Of course, as has been disclosed in past corporate
filings, I am a principal of Nevada Agency and Trust Company. In short, as long
as I severed all ties with Harvard, Waite would arrange for the $12 million to
be put into Harvard. See then asked me to step down so Waite would put the funds
into the corporation. Given the breakdown in my communications with Waite, I
agreed as long as the $12 million transaction was real and as long as a suitable
severance agreement could be put in place.
9. Thereafter, See and Waite held what they purported to be a telephonic meeting
of the board of directors on Thursday, December 4, 1997. At this meeting, See
wrongly represented that I had resigned as an officer and director. The board
then proceeded to wrongly fill my positions with Harvard and wrongly terminate
Nevada Agency and Trust Company as Harvard's transfer agent. This meeting was
held without notice and was invalid.
10. When I learned of the invalid meeting, I took steps to protect the
corporation's assets. I hired an attorney for this purpose. I was prepared to
seek court intervention if the corporation's officers and directors did not
follow proper corporate formalities. Thereafter, the directors properly noticed
a directors' meeting in order to take all actions they wished to legally take.
The fact that thisDr. Jackie R. SeeThomas R. WaiteDecember 23, 1997Page 4
--------------------------------------------------------------------------------
second directors' meeting was called confirmed at least two things: (1) the
previous telephonic meeting was invalid; and (2) I had not resigned as a
director as See had wrongly represented.
11. I have not been given any documentation which confirms the existence of the
$12 million infusion of funds which Waite claims will be made to Harvard. I
believe that such documentation should be made available to all board members.
Either such documentation does not exist or a decision has been made not to
provide me as a member of the board with such documentation. I do not agree with
any decision to take action upon the promise of $12 million without confirmation
of the obligation to put the $12 million into the corporation.
12. It is my opinion that under Waite's supervision, Harvard's assets are being
dissipated unnecessarily. Krilich's appointment and salary are unnecessary in
light of the previous employment of Mr. Orgill. Of course, both See and Waite
are aware of the fact that Mr. Orgill has been my accountant for. many years and
that I certainly favor and approve of his appointment, as did they at the board
meeting held on November 20, 1997.
13. It also is my opinion that the termination of Nevada Agency and Trust
Company as Harvard's transfer agent is a breach of the ninety (90) day notice
provision in the agreement between Nevada Agency and Trust Company and Harvard,
and also violates Rule 17Ad-16 of the Securities Exchange Act of 1934, as
amended, which requires a transition period of ten (10) days during a change of
transfer agents. Management has chosen to ignore these facts, a decision with
which I do not agree, and opened the corporation to further liability.
14. Also, in my opinion, Harvard is not disclosing material information to the
shareholders. For example, See has informed me, and I have relied on the
accuracy of his representations, that the Phase I testing of the corporation's
principle product will be audited by the Food and Drug Administration. For
months I have advocated the disclosure of this fact, if it is true, and a full
discussion of the impact such an audit could have on the approval process. I
believe such a disclosure should be made immediately and I do not agree with the
corporation's failure to make such a disclosure.Dr. Jackie R. SeeThomas R. Waite
December 23, 1997Page 5
--------------------------------------------------------------------------------
15. Also, in my opinion, the press release the corporation made on or about
December 11, 1997 denying the existence of any class action suits by
shareholders could be construed as misleading. A copy of the press release which
I downloaded from the Internet is attached hereto. While it may be true that the
officers and directors are unaware of any class action suits by shareholders,
they are aware of at least one suit brought by a shareholder against the
corporation. Of course, I refer to the Cogdill v. Harvard matter pending in the
Superior Court of the State of California, County of Los Angeles, Case No.
KC025611. In my opinion, the press release should have made mention of that fact
and I do not agree with the corporation's decision to omit that fact from the
press release.
16. Given these conflicts with management, I can no longer serve as a director.
Therefore, because of my disagreements with on the matters relating to the
corporation's operations, policies and practices, I resign as a director of
Harvard. This letter and its attachment is my written description of my
disagreements and pursuant to Item 6(a) of Form 8-K I hereby request that this
matter be disclosed on Form 8-K. Pursuant to Item 6(c), this letter and its
attachment must be filed as an exhibit to such a Form 8-K filing.
Very truly yours,/s/ Alexander H. Walker, Jr.A.H.WalkerJr.:cje
cc: David R. Baker McDonald Carano Wilson McCune
Nevada Agency and Trust Company
Thursday December 11, 10:03 am Easter TimeCompany Press Release
HARVARD SCIENTIFIC CORP. PRESIDENT DISMISSES ALLRUMORS
RENO, Nov.-(BUSINESS WIRE)-Dec. 11, 1997-
Management of Harvard Scientific Corp.
said today that it has come to the company's attention through
e-mail messages and telephone calls that certain unfounded rumors have been circulating about the company. Management assets further that neither thecompany, its registered agent nor its legal counsel is aware of any class action
lawsuits initiated by shareholders or any other party, as has been rumored.
Thomas Waite, President and Chief Executive Officer,
said he knows of no reason for the recent drop in
the price of the company's stock.
He added that management is focused on
enhancing the fundamentals of the company through strengthening the balance
sheet and by fully implementing its plan to bring the company's products tomarket. |
