- 7% owner Attempting to Take Control of Company Without Paying
a Control Premium to Shareholders
- Circumvents Proper Vetting of Directors; Proposes Slate with
Multiple Connections and Allegiances to Iroquois with History of
Value Destruction
- Proposes 15-Person Board Which is Operationally Inefficient,
Violates the Bylaws, and Would Unnecessarily Waste Company
Resources
- Attempts to Amend Bylaws to Entrench Itself and Its Own
Nominees At The Expense of All Shareholders
- Iroquois’ Consent Solicitation Is Full of Factual Inaccuracies
and Misrepresentations
PharmaCyte Biotech, Inc. (NASDAQ: PMCB), a biotechnology company
focused on developing cellular therapies for cancer, diabetes, and
malignant ascites using its signature live-cell encapsulation
technology, Cell-in-a-Box®, today issued the following statement in
response to Iroquois Capital’s filing of a preliminary consent
statement to commence a consent solicitation in lieu of a
stockholder meeting. Iroquois Capital is seeking the consent of the
Company’s shareholders to change various Company Bylaws, expand the
size of the Company’s Board of Directors (Board) from 7 to 15, and
elect Iroquois’ entire slate of 8 directors to the Board. The
Company has serious concerns with this recent action taken by
Iroquois and portends trouble ahead for the Company and its
shareholders.
For the reasons set forth below, we implore our fellow
shareholders to rebuke the significant infringement to your
shareholder rights represented by Iroquois’ proposed changes to our
Bylaws. Please ignore any “WHITE” consent card you may receive from
Iroquois. We are not responsible for the accuracy of any
information provided by or relating to Iroquois contained in any
consent solicitation materials filed or disseminated by, or on
behalf of, Iroquois or any other statements that Iroquois or its
representatives have made or may otherwise make. In fact, the
Iroquois consent solicitation is riddled with misstatements. Any
Iroquois mailing or communication is not from PharmaCyte; instead,
it is an attempt by Iroquois, a hedge fund with only 7% ownership,
to solicit consents that are designed to enable Iroquois to take
over the entire Company and its cash position of over $80 million.
We are not a private company for the benefit of one shareholder. We
are a public entity working to build shareholder value and change
the landscape of on how cancer, diabetes and malignant ascites are
treated.
Hedge Fund With Just 7% Ownership Attempting Board Takeover
In Order to Seize Company’s Cash Position of Over $80
million
Should the 8 Iroquois nominees be elected to the Board,
shareholders would effectively give Iroquois, a hedge fund which
owns only 7% of our Company, full control of the Company and its
resources by providing disproportionate power to one questionable
stakeholder with motives and interests that appear to conflict with
the interests of the broader shareholder base.
Iroquois would not be paying a control premium to other
shareholders; instead it intends to use the consent process and
changes to the Company’s Bylaws to entrench itself and its nominees
and to use the Company and its over $80 million in cash for its own
benefit. The Iroquois slate is dominated by current or former
Iroquois employees, family members of Iroquois management, and
individuals who have partnered with Iroquois multiple times in the
past resulting in the destruction of shareholder value in numerous
documented instances. In fact, in 7 identified instances where
Iroquois added new board members to public companies, the stocks on
average decreased over 30% within the first year. Furthermore, the
troubling web of interconnecting relationships – including familial
relationships – is in direct conflict with good corporate
governance and fosters “groupthink” which will severely hamper the
Board’s independence and performance.
Iroquois’ slate of nominees has limited experience operating a
public company or a biopharma company but does, we believe, have an
extensive track record of destructing value to the detriment of
shareholders. The slate of Iroquois’ nominees has no substantive
experience with, or knowledge of, PharmaCyte’s business or
technology and is being nominated solely to advance Iroquois’
short-term agenda – take control of the Company and its over $80
million in cash.
The current PharmaCyte Board has extensive biopharma experience
and is able to guide the Company as it continues to advance its
product development. We have stated numerous times that we
recognize the importance of heightening the Board’s capital markets
knowledge to match its scientific expertise, and we are in the
process of identifying and thoroughly vetting candidates to ensure
that the best people are in place to help us seize the
opportunities presented by the strength of our technology,
therapies, and cash position. As a matter of fact, we have
identified, and our nominating committee is in the process of
interviewing, candidates that are well-respected on Wall Street,
and who have incalculable amounts of experience in capital markets
and in the biopharma industry specifically that dramatically
outweighs the experience of any candidate on Iroquois’ slate.
PharmaCyte Continues to Effectively Advance Its Strategy
Toward Lifting the FDA’s Clinical Hold; Iroquois Has Not Provided A
Strategy For The Business
The Company is nearing the end of its process of fulfilling the
FDA’s requests to enable the clinical hold to be lifted, and to
date has successfully completed almost two dozen studies, 12 of
which have been announced since the Company secured the necessary
funding to complete the work required to satisfy the FDA’s requests
through two public offerings in concert with the Company’s uplist
to Nasdaq. Approximately 90% of the FDA’s requests have been
completed or are in process with only a few remaining to be
completed.
Contrary to Iroquois’ claim that the Company “has never
publicized the actual list of requirements from the U.S. Food and
Drug Administration (FDA)”, the Company has provided a detailed
synopsis of the requests and status in its SEC filings and most
recently in the appendix of the Company’s slide presentation
available on the Company’s website. Moreover, the Company has
already commenced its two-phase pig study, which is the last major
study requested by the FDA.
Our team, with the support of our experienced Board, has made
considerable progress during the past year, while controlling costs
despite worldwide supply chain challenges that are affecting FDA
studies, processes and approvals across our industry. Our progress
demonstrates the value of our experienced and proven team of
scientific and medical professionals who have played key roles in
helping to get some of the world’s most successful drugs through
the clinic. Iroquois’ slate has no such scientific experience and
their ongoing disruptive efforts jeopardize the progress we are
making, and may result in delays in the lifting of the FDA clinical
hold and destroy shareholder value.
A 15-Person Board is Irrational for a Company of PharmaCyte’s
Size, is Inefficient, Violates our Bylaws and Adds Unnecessary
Expense and Logistics
Smaller Boards, particularly for smaller public companies like
PharmaCyte, have proven to be more impactful and effective in
driving shareholder value. For us, an appropriately sized Board is
approximately 7, which provides for a diversity of skill sets while
remaining small enough to run efficiently for the benefit of
shareholders. Adding Board members leads directly to increased
expenses related to Board fees and director insurance and
inefficiencies in taking actions.
Iroquois is suggesting we more than double the size of our
current Board. This will equate to a substantial increase in costs
– money that could better be allocated to moving our therapies
through the clinic – the clearest path to sustained shareholder
value.
Further, Iroquois’ proposal to increase the size of our Board by
8 candidates violates provisions of our Bylaws.
Iroquois is Trying to Dictate Who All Our Board Members
Should Be; Our Shareholders Should Beware
We have been engaged in settlement discussions with Iroquois to
refresh our Board with more directors with capital markets
expertise. Iroquois holds just 7% of our common stock, yet, despite
this small ownership position, Iroquois is attempting to dictate
our entire Board membership including who our Board candidates
should be. Having failed to offer a reasonable settlement, they now
seek to expand the Board to 15 with 8 of their nominees, none of
whom is familiar with or has any expertise regarding our technology
and drug development programs. Iroquois is attempting to acquire
full control of the Company at little cost to itself for its own
ends, at the cost of other shareholders.
Iroquois’ Consent Solicitation Is Full of Factual
Inaccuracies And Misrepresentations; Their Intentions Should Not Be
Trusted
For example, the statement “On August 9, 2021, Iroquois made its
initial investment of $2.5 million in the Company in connection
with a private placement offering in which the Company raised
nearly $90 million” is misleading, and creates the false impression
that Iroquois made a significant and lasting investment of $2.5
million in the Company at a high price per share.
In fact, Iroquois purchased shares and warrants for
approximately $300,000 on August 9, 2021 in a $15 million public
offering by the Company, and Iroquois then sold all of the
purchased shares almost immediately.
On August 19, 2021, Iroquois purchased shares and warrants for
approximately $2.5 million in a $70 million registered direct
offering by the Company, and Iroquois then sold all of the
purchased shares that very same day. Since that sale of its entire
position on August 19, 2021, Iroquois has continued to purchase and
sell the Company’s shares, with an average acquisition price per
share which we believe to be similar to the Company’s current
trading price on Nasdaq.
Iroquois has opportunistically acquired the Company’s stock at a
low price, and seeks your consent to take control of the Company
and its cash reserves at your expense and to your detriment.
Iroquois Is Proposing Bylaw Changes to Take Over The Company
And Promote Its Interests While Disenfranchising Other
Shareholders
Our Bylaws were designed to help protect the rights of all
shareholders from the will of a single investor. Iroquois is
requesting Bylaw changes to give themselves a path to take control
of our Company, including full discretion to deploy the Company’s
valuable cash, however Iroquois deems appropriate. Our cash
position is a key strategic asset supporting our growth strategy;
if our cash is misallocated or squandered, our growth and product
candidate development plans are in jeopardy, which was the reason
PharmaCyte uplisted to Nasdaq in the first place—to raise the
necessary capital to develop its product candidates and get the
clinical hold lifted on our IND.
Our Board and management were planning, and in the early stages
of launching, many of the initiatives Iroquois is now trying to
take credit for, and efforts were underway well before Iroquois
began publicly expressing grievances. We share in the frustration
with the current share price, but we believe it is imperative that
we continue to dedicate the majority of our time and resources to
advancing our groundbreaking technology through the clinic.
We have heard and given thoughtful consideration and response to
the opinions Iroquois has put forward, including adding additional
capital markets experience to our Board. However, we will not let
one shareholder derail the Company from its ultimate mission – the
continued development of and successful clinical trials for our
groundbreaking therapies – to the detriment of all other
stakeholders.
Again, we urge our fellow shareholders to strongly rebuke the
significant infringement to your shareholder rights represented by
Iroquois’ proposed changes to our Bylaws. Please disregard any
“WHITE” consent card that you may receive from Iroquois by taking
no action at all. We are not responsible for the accuracy of any
information provided by or relating to Iroquois contained in any
consent solicitation materials filed or disseminated by, or on
behalf of, Iroquois or any other statements that Iroquois or its
representatives have made or may otherwise make. Any Iroquois
mailing or communication is not from PharmaCyte; instead, it is an
attempt by Iroquois, a hedge fund with only 7% ownership, to
solicit consents that may enable Iroquois to take over the entire
Board of PharmaCyte by changing Bylaws that were designed to
protect the Company’s shareholders. PharmaCyte is not a private
company for the benefit of one shareholder. We are a public entity
working to build shareholder value and change the landscape for how
cancer, diabetes and malignant ascites are treated.
Thank you for your continued support.
About PharmaCyte Biotech
PharmaCyte Biotech, Inc. is a biotechnology company developing
cellular therapies for cancer, diabetes and malignant ascites based
upon a proprietary cellulose-based live-cell encapsulation
technology known as “Cell-in-a-Box®.” This technology is being used
as a platform upon which therapies for several types of cancer,
diabetes and malignant ascites are being developed.
PharmaCyte’s therapy for cancer involves encapsulating
genetically engineered human cells that convert an inactive
chemotherapy drug into its active or “cancer-killing” form. For
pancreatic cancer, these encapsulated cells are implanted in the
blood supply to the patient’s tumor as close as possible to the
site of the tumor. Once implanted, a chemotherapy drug that is
normally activated in the liver (ifosfamide) is given intravenously
at one-third the normal dose. The ifosfamide is carried by the
circulatory system to where the encapsulated cells have been
implanted. When the ifosfamide flows through pores in the capsules,
the live cells inside act as a “bio-artificial liver” and activate
the chemotherapy drug at the site of the cancer.
PharmaCyte’s candidate therapy for Type 1 diabetes and
insulin-dependent Type 2 diabetes involves encapsulating a human
cell line that has been genetically engineered to produce and
release insulin in response to the levels of blood sugar in the
human body. The encapsulation of the cell line will be done using
the Cell-in-a-Box® technology. Once the encapsulated cells are
implanted in a diabetic patient, we anticipate that they will
function as a “bio-artificial pancreas” for purposes of insulin
production.
PharmaCyte’s therapy for malignant ascites involves using the
same encapsulated cells PharmaCyte employs for pancreatic cancer
but placing the encapsulated cells in the peritoneal cavity of a
patient and administering ifosfamide intravenously.
Safe Harbor
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that express the current beliefs and expectations of PharmaCyte’s
management and Board of Directors. Any statements contained in this
press release which do not describe historical facts are
forward-looking statements subject to risks and uncertainties that
could cause actual results, performance and achievements to differ
materially from those discussed in such forward-looking statements.
Factors that could affect our actual results include our ability to
satisfactorily address the issues raised by the FDA in order to
have the clinical hold on our IND removed, as well as such other
factors that are included in the periodic reports on Form 10-K and
Form 10-Q that we file with the U.S. Securities and Exchange
Commission. These forward-looking statements are made only as of
the date hereof, and we undertake no obligation to update or revise
the forward-looking statements, except as otherwise required by
law, whether as a result of new information, future events or
otherwise.
More information about PharmaCyte Biotech can be found at
https://www.PharmaCyte.com. Information may also be obtained by
contacting PharmaCyte's Investor Relations Department.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220728005874/en/
Investor Relations: PharmaCyte Biotech, Inc. Telephone:
917.595.2856 Email: InvestorRelations@PharmaCyte.com Attn: Dr.
Gerald W. Crabtree
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