Concerned shareholder group has issued an
information circular and letter to shareholders outlining reasons
for change
TORONTO, April 3,
2023 /CNW/ - A group of longstanding shareholders of
Sernova Corp (TSX:SVA) (OTCQB:SEOVF) (FSE/XETRA:PSH) ("Sernova" or
the "Company") who currently own approximately 12% of the Company's
shares have concerns regarding the performance of Sernova's Board
(the "Concerned Shareholders"). Sernova's Board needs new
voices. They are nominating two highly qualified individuals to
bring independent shareholder representation to the Board and
to address some significant issues that have impeded the Company's
ability to unlock Sernova's true value.
The two nominees are fellow shareholders, Dr. Steven Sangha, a private fund family office
investor, and Mr. Bertram von
Plettenberg, a management and financial consultant and
investor.
Eroding Value
Sernova's Current Board has complacently overseen a period of
eroding shareholder value. Over the last two years, Sernova's share
price has been on a downward trend. In stark terms, there has been
a significant erosion in market value and shareholder value since
May 2022, with over an approximate
40% decline in share price at the time of writing this release
(to approximately $0.88). This is
contrary to what analyst reports were anticipating (approximately
$3.00 by end of 2022). Sernova's
Current Board has failed to prepare and execute a plan to improve
Sernova's performance and increase shareholder returns.
Slow Progress
The Current Board's tenure has been marked by slow progress on
clinical trials and missed timelines. This sluggish progress
includes trials for applications other than diabetes. This
includes the lack of advancement of Thyroid trial or progress that
had been promised for over three years.
Despite numerous catalysts, Management has failed to create
positive momentum. It has failed to build on the
Corporation's successful results in January
2021 and it has failed to execute a coherent business
plan.
Wasteful Spending and Little Progress
Currently $1 million is spent on
Investor Relations annually with little institutional investment in
the Company. With only one exception (a recent announcement
relating to Evotec), Sernova's collaboration with others in the
industry is opaque. But this does not appear to trouble the Current
Board. There has been no information concerning the cell pouch
commercialization strategy to generate revenue by 2026 as indicated
in a number of analyst reports. Furthermore, despite repeated
promises over several years, Sernova has not taken any steps to
list on the Nasdaq Exchange.
These factors interact with one another and have had a negative
impact on Sernova, its share price and its ability to attract new
buyers and partners. Sernova's Current Board appears not to
care.
A Board That Ignores Shareholders
Consistent with its general lack of transparency and
responsiveness to shareholders' concerns, the Current Board has
failed to meaningfully engage with the Concerned Shareholders to
address the multiple issues facing Sernova.
The Concerned Shareholders approached Sernova's Current Board in
the hope that they could reach an amicable and cooperative
agreement to change the Board's composition so as to include fresh
voices and new perspectives that were in touch with
shareholders.
Instead, the Concerned Shareholders were rebuffed or simply
ignored. The Current Board's actions and inactions have
resulted in the Concerned Shareholders, acting in the best
interests of the Corporation, having to take matters into their own
hands as a last resort by delivering an advance notice of
nomination of directors and a Circular, all at their own expense.
By taking matters into their own hands, they are ensuring that the
future direction of Sernova is now in shareholders' hands.
Sangha and von Plettenberg,
the New Voices Sernova needs in the board room
Dr. Sangha and Mr. von
Plettenberg will provide capital market and business
execution experience, guidance to accelerate the progress of
different research and clinical initiatives as well as improve the
Corporation's profile with better promotion and investor relations,
all the while being vigilant on costs and the capital share
structure.
Both Dr. Sangha and Mr. von
Plettenberg are passionate shareholders of Sernova and are
deeply knowledgeable about the concerns of the Corporation's other
shareholders. Dr. Sangha and Mr. von
Plettenberg would bring independent shareholder
representation to the Board. They will support measures to improve
transparency, cooperative governance and accountability. Dr. Sangha
and Mr. von Plettenberg will also
support scaling back compensation immediately.
AT THE MEETING, THE CONCERNED SHAREHOLDERS ARE ASKING
SHAREHOLDERS TO VOTE FOR THE CONCERNED SHAREHOLDERS
NOMINEES.
To ensure that the Company's best days are ahead, the Concerned
Shareholders recommend that fellow shareholders vote using only the
GOLD form of proxy FOR the two shareholder nominees who will
provide capital market and business execution experience, guidance
to accelerate the progress of different research and clinical
initiatives as well as improve the Corporation's profile with
better promotion and investor relations, all the while being
vigilant on costs and the capital share structure.
VOTE FOR THE CONCERNED SHAREHOLDERS NOMINEES TODAY AND GUIDE
SERNOVA TOWARDS A PROSPEROUS FUTURE.
If you did not receive the Concerned Shareholders' Circular or
you would like to speak to any of the Concerned Shareholders,
including the Concerned Shareholders' nominees, please contact
Carson Proxy Advisors at North American toll free phone at
1-800-530-5189, local (collect outside North America) 416-751-2066 or by email at
info@carsonproxy.com.
For more information, you can also visit the Concerned
Shareholders' website at:
www.carsonproxy.com/shareholdersforsernova
Advisors
Kushneryk Morgan LLP is serving as legal advisor to Dr. Sangha
and Stephan Dubreuil and Carson
Proxy Advisors is acting as strategic shareholder communications
advisor to the Concerned Shareholders.
Cautionary Statement Regarding Forward-Looking
Information
Certain information included, attached to, provided with, or
incorporated by reference into this release may contain
forward-looking statements, as such term is defined and/or used in
applicable Canadian securities legislation, about the objectives of
the Concerned Shareholders as they relate to Sernova, the impact of
the Concerned Shareholders Nominees, if elected, on the financial
condition, results of operations, business strategies, revenue
enhancements, and competitive position of Sernova, each as
described in this release, and other matters.
All statements included or incorporated by reference in,
attached to, or provided with this release, other than statements
of historical fact, are forward-looking statements, including,
without limitation, statements regarding activities, events or
developments that the Concerned Shareholders expect or anticipate
may occur in the future. These forward-looking statements can be
identified by the use of forward-looking words such as "possibly",
"will", "expect", "intend", "plan", "estimate", "potential",
"anticipate", "believe" or "continue" or similar words or the
negative thereof and include statements concerning support for the
Concerned Shareholders, the implementation and timing of the
Corporation's business strategy, the plans and intentions for the
future by the Concerned Shareholders Nominees, the role for members
of current management and the search for new members of management,
transition plans, financing arrangements and the future market for
and liquidity of the Corporation's shares.
The forward-looking statements included in this release are
based on understandings and reasonable assumptions, beliefs,
opinions and expectations of the Concerned Shareholders at the time
they are made. These assumptions include, but are not limited to,
Sernova's future growth potential; its results of operations;
future cash flows; the future performance and business prospects
and opportunities of Sernova; the election of the Concerned
Shareholders Nominees; the ability of the Concerned Shareholders
Nominees, if elected, to effect positive change at Sernova and
appoint other individuals as directors; the response to and outcome
of any court applications that may be made against the Concerned
Shareholders; the implementation and timing of Sernova's business
strategy; the current general and regulatory environment and
economic conditions remaining unchanged; the availability of
financing; operating and capital costs; Sernova's available cash
resources; Sernova's ability to identify, attract and retain
skilled staff, including a new Chief Executive Officer; currency
exchange rates; required capital investments; estimates of net
present value and internal rate of returns; market competition;
ongoing relations with employees and other stakeholders in the
gaming community; and general business and economic conditions.
There can be no assurance that the plans, intentions or
expectations upon which these forward-looking statements are based
will occur. We caution readers of this release not to place undue
reliance on forward looking statements contained in this release,
which are not a guarantee of performance and are subject to a
number of uncertainties and other factors that could cause actual
results to differ materially from those expressed or implied by
such forward-looking statements. These factors include shareholder
actions, court decisions, the timing of the Meeting, actions by the
Corporation, its management, members of the Current Board,
unexpected change of control consequences, the failure of
shareholders to nominate the Concerned Shareholders Nominees, the
status of Sernova's assets, financial condition and corporate books
and records, general economic and market conditions, availability
of capital, changes in law, regulatory processes, actions of
competitors, and the ability to implement business strategies and
pursue business opportunities and financing alternatives after a
state of uncertainty. Holders of Common Shares in the capital of
the Corporation are cautioned that all forward-looking statements
involve risks and uncertainties, including those risks and
uncertainties detailed in Sernova's filings with applicable
Canadian securities commissions, copies of which are available
under Sernova's issuer profile at www.sedar.com. We urge you to
carefully consider those factors. The forward-looking statements
contained in this releaseare expressly qualified in their entirety
by this cautionary statement. The forward-looking statements
included in this release are made as of the date of this release
and the Concerned Shareholders undertake no obligation to publicly
update such forward-looking statements to reflect new information,
subsequent events or otherwise, except as required by law.
SOURCE The Group of Shareholders of Sernova Corporation
