MIRAMAR, Fla., Dec. 18, 2019 (GLOBE NEWSWIRE) -- G
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Posted On: 12/18/2019 11:23:05 AM
MIRAMAR, Fla., Dec. 18, 2019 (GLOBE NEWSWIRE) -- Generex Biotechnology Corporation (OTCQB: GNBT) has issued a shareholder alert regarding recent trading activity that has adversely affected the company and its shareholders. As a standard practice, Generex monitors the trading in its securities, and after due inquiry, has come to a reasonable belief that certain irregular trading activities have transpired.
Through a recent analysis of trading activity, Generex believes that at least one beneficiary of the Veneto asset acquisition has violated the leak out provisions in the Veneto asset purchase agreement, through which Generex paid for the assets, but never fully acquired them. Generex believes that other beneficiaries to the Veneto asset purchase agreement, by not providing requested records, also violated a provision in the agreement that requires them to present their holdings on demand in order to demonstrate compliance with the leak out provision. Generex is still not in possession of certain key assets that should have been transferred in the Veneto asset acquisition. Generex is of the opinion that by controlling these assets, and their cash flows, Veneto and inter alia their beneficiaries, are affiliates of Generex, according to the definition of affiliate, which is a person who controls or is under mutual control of the company. Generex is currently considering cost efficient solutions to these violations, in addition to invoking provisions in the agreement which take away beneficial share price protection features for the beneficiaries of the agreement, which were triggered by adverse actions following the execution of the agreement. Among other reasons, this provision was triggered due to allegations by the U.S. Department of Justice in court concerning the improper conduct of personnel associated with Veneto.
Generex is providing this information to its shareholders in its continuing efforts to provide full transparency to our shareholders, and to help shareholders understand recent sell-side pressure.
Joe Moscato, President & CEO of Generex stated, “Generex will not take lightly any unscrupulous, greedy behavior, nor violations of legal agreements by bad actors when those actions hurt shareholders and the value of our company. If legal agreements are breached when bad actors break covenants, their actions not only precipitate the decline of our share price, but also put a cloud of uncertainty on our company. We are highly disappointed that two groups have chosen to hurt Generex shareholders in the short term for greed. We take our responsibilities seriously as it pertains to holding irresponsible individuals accountable to Generex and our shareholders, and we will do everything in our power to rectify the situation. To that end, we have hired Robert Heim, Esq., former Assistant Regional Director in the SEC’s Enforcement Division, and currently of Tarter Krinsky & Drogin LLP to pursue legal remedies. What has happened here is a common disregard for the law and business ethics. Unfortunately, OTC market companies face these problems every day, and this behavior has been normalized for this exchange and the companies it holds. More compliance, increased scrutiny, and of course regulatory action are needed on the OTC exchange, with regulators protecting OTC companies and their shareholders. Generex plans to lead the way in shedding a light on this industry-wide problem, and we will seek every legal remedy available to protect Generex and our shareholders. We wish our shareholders a cheerful holiday season and look forward to a joyful and prosperous new year in 2020.”
Through a recent analysis of trading activity, Generex believes that at least one beneficiary of the Veneto asset acquisition has violated the leak out provisions in the Veneto asset purchase agreement, through which Generex paid for the assets, but never fully acquired them. Generex believes that other beneficiaries to the Veneto asset purchase agreement, by not providing requested records, also violated a provision in the agreement that requires them to present their holdings on demand in order to demonstrate compliance with the leak out provision. Generex is still not in possession of certain key assets that should have been transferred in the Veneto asset acquisition. Generex is of the opinion that by controlling these assets, and their cash flows, Veneto and inter alia their beneficiaries, are affiliates of Generex, according to the definition of affiliate, which is a person who controls or is under mutual control of the company. Generex is currently considering cost efficient solutions to these violations, in addition to invoking provisions in the agreement which take away beneficial share price protection features for the beneficiaries of the agreement, which were triggered by adverse actions following the execution of the agreement. Among other reasons, this provision was triggered due to allegations by the U.S. Department of Justice in court concerning the improper conduct of personnel associated with Veneto.
Generex is providing this information to its shareholders in its continuing efforts to provide full transparency to our shareholders, and to help shareholders understand recent sell-side pressure.
Joe Moscato, President & CEO of Generex stated, “Generex will not take lightly any unscrupulous, greedy behavior, nor violations of legal agreements by bad actors when those actions hurt shareholders and the value of our company. If legal agreements are breached when bad actors break covenants, their actions not only precipitate the decline of our share price, but also put a cloud of uncertainty on our company. We are highly disappointed that two groups have chosen to hurt Generex shareholders in the short term for greed. We take our responsibilities seriously as it pertains to holding irresponsible individuals accountable to Generex and our shareholders, and we will do everything in our power to rectify the situation. To that end, we have hired Robert Heim, Esq., former Assistant Regional Director in the SEC’s Enforcement Division, and currently of Tarter Krinsky & Drogin LLP to pursue legal remedies. What has happened here is a common disregard for the law and business ethics. Unfortunately, OTC market companies face these problems every day, and this behavior has been normalized for this exchange and the companies it holds. More compliance, increased scrutiny, and of course regulatory action are needed on the OTC exchange, with regulators protecting OTC companies and their shareholders. Generex plans to lead the way in shedding a light on this industry-wide problem, and we will seek every legal remedy available to protect Generex and our shareholders. We wish our shareholders a cheerful holiday season and look forward to a joyful and prosperous new year in 2020.”
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