Strategic Urges All Stockholders to Vote the GOLD Proxy Card Now to Support the Election of the Strategic Nominees
September 23 2010 - 3:38PM
Institutional Shareholder
Services (ISS) Recommends Stockholders Vote the GOLD Proxy Card to
Elect All Five Strategic Nominees - Gary L. Herman, Seth M. Lukash,
Fred Zeidman, Howard Brod Brownstein and Martin Wade,
III
ISS States That "…shareholder
rights continued to be eroded…" at United American
Healthcare Corporation
Strategic Turnaround Equity Partners, LP (Cayman) ("Strategic") and
the other participants in the solicitation urge stockholders of
United American Healthcare Corporation ("United" or the "Company)
(Pink Sheets:UAHC) to vote the Gold Proxy Card to elect its five
highly qualified and experienced director nominees, Gary L. Herman,
Seth M. Lukash, Fred Zeidman, Howard Brod Brownstein and Martin
Wade, III at the Company's 2009 and 2010 Annual Meeting of
stockholders scheduled to be held on September 30, 2010. Strategic
and the other participants in this solicitation (collectively, the
"Strategic Group" or "we") are the beneficial owners of an
aggregate of 814,963 shares of common stock of United, representing
approximately 9.98% of the outstanding shares of common stock of
the Company.
Excerpts from ISS Analysis and Recommendation
ISS, the leading independent proxy voting advisory firm, in
recommending that United stockholders vote on Strategic's GOLD
proxy card to elect all five Strategic nominees to the Board of
Directors of United, was extremely critical of the Board's
governance practices and the way the Board pursued the Pulse
transaction.
In discussing the Board's handling of the Pulse acquisition ISS
stated:
"Given the close ties between the advisor and the target
company, as well as Mr. Fife's participation in the acquisition
identification process, the board's efforts to ensure a thorough,
fair, and transparent process takes on added significance. However,
in this case, the timeline and fact pattern suggest just the
opposite. For example, at the time of the announcement, no
financial statements for Pulse were released to allow investors to
allow them to review the valuation; the board did not publish the
fairness opinion that it had received and the company did not
provide shareholders with a specific rationale for the
acquisition."
ISS went on to state:
"[T]he board stated that the acquisition of Pulse was motivated
primarily by significant revenues, positive EBITDA and long-term
growth opportunities. EBITDA continues to be an important metric
the board has used to justify the reasons for the transaction.
However, in the company's Form 10-K, it was disclosed that prior to
the acquisition, Pulse Systems failed to satisfy several financial
covenants of its loan with Fifth Third Bank, which included:
Minimum Adjusted EBITDA on Dec. 31, 2009 and March 31, 2010; Funded
Debt to Adjusted EBITDA on March 31, 2010; Fixed Charge Coverage
Ratio on Dec. 31, 2009; Timely delivery of audited financial
Statements on Dec. 31, 2009.
"Adequate financial disclosure could help investors answer
questions that arise from the board's support of the company's
strong EBITDA and the failure to meet the minimum standards
established in the debt covenants. The existing defaults on these
loans were waived as part of the merger.
"Given the negative market reaction and the prominent calls for
transparency from shareholders, it was imperative that the board
present the alternatives that were considered and fully disclose
the process that led the board to finalize the purchase in order to
assuage shareholder concerns. The board has yet to do so."
ISS concluded:
"There is strong evidence that an alternative viewpoint is
needed on the board to ensure that shareholders have adequate
representation. The incumbent board has not addressed agency
concerns that have been raised repeatedly by its shareholders. In
fact, shareholder rights have continued to be eroded since the
annual meeting as important approval requirements have been
repealed. The rescission of these rights culminated in a
contentious acquisition without the opportunity for shareholder
feedback."
Strategic nominee Gary Herman, stated, "We are pleased that ISS
recommends for change on the United Board. The current Board
seems intent to disenfranchise shareholders at every turn, the
Strategic nominees are committed to working productively with the
other members of the Board to ensure the best interests of all
stockholders are represented."
Concluded Herman, "We thank stockholders who have already voted
the GOLD proxy card for the Strategic nominees and urge all other
stockholders to return the GOLD proxy card today to elect
Strategic's three highly-qualified director nominees."
For information on how to vote your GOLD proxy card please
contact our proxy solicitor, Okapi Partners, LLC at 1-877-285-5990
or 212-297-0720.
CONTACT: Okapi Partners, LLC
Steven C. Balet
212-297-0720
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