Here is my follow up letter to Bill and George requesting a face to face meeting, since I haven't received a response to my first request:
Bill and George,
I haven’t received a response from either of you relative to my request for a face to face meeting which I included in my email to you on Monday morning, July 6th. Your lack of a response is disappointing, so I am forwarding this note to each of you to again request that you respond. I certainly hope you will agree to meet, particularly in light of issues that are of very legitimate concern to shareholders.
George:
In my previous email, I referenced the statement in HDC’s 10-k that the company has not received updates from SVM Capital since 2016. While the conflicting information between this statement and the response from Mark Moore is troubling enough, I have been provided with information suggesting that there is a much more significant problem with HDC’s statement.
Based on a business search through the State of Georgia Corporations Division which was conducted by a fellow HDC shareholder, SVM Capital, LLC has been dissolved as of May 4, 2020. This is very troubling information for two primary reasons:
a) If HDC believed that it was important enough to reference the lack of information since 2016 in its 10-k, how is it that HDC didn’t believe it was important enough to issue an 8-k to inform shareholders of the asset being dissolved?
b) Inasmuch as HDC referenced in the 10-k its inability to receive data from SVM Capital, the business information indicates that it is Hong Zhang who is listed under the Registered Agent Name. Further, in looking back at a press release from Manifold Partners a number of years ago, I saw that both Mark Moore and Hong Zhang were referenced as part of the Manifold Vector team.
So let me get this straight, George. You stated that HDC was not provided with information from SVM Capital since 2016, yet the individual with his name listed as the Registered Agent for the LLC is none other than HDC’s Chief Science Officer. That’s right, the same individual that you introduced during the shareholder meeting, and the individual that you mentioned as something along the lines of a ‘great person’. Are you telling shareholders that Hong Zhang couldn’t have helped get the information you were looking for? Further, HDC had the audacity to allow for the asset, in which HDC has a significant stake, to be dissolved without informing shareholders? Perhaps your statement, George, had less to do with the business at hand, and more to do with sending a jab at Mark Moore or someone else? It goes without saying that HDC has some explaining to do so that shareholders are appropriately apprised as to what specifically has transpired.
As you are well aware, shareholders were not appropriately informed when HDC engaged Frazier & Deeter as its public accounting firm in January 2020. It wasn’t until Monday, April 6th that shareholders learned of the engagement, and this occurred on the very first business day after I forwarded an email to HDC on Saturday, April 4th asking the following: What is the name of the accounting firm used by HDC to audit its financials, and on what date did HDC engage this firm for said purposes?
George, as I’m sure you are aware, publicly traded companies have an obligation to report such information to shareholders in a timely fashion, which did not occur. And, since circumstances reveal that you and the HDC team do not even use the bathroom without legal guidance, perhaps you can explain why HDC failed in its responsibility to shareholders, particularly in light of the public complaint process initiated by Bill and Cindy Bear and the pressure to hold a shareholder meeting. Was it someone’s idea to keep us in the dark, perhaps because you thought you’d be a bit vengeful (there is a theme here, George), or did you and your legal team simply slip up relative to a very pertinent matter? Either way, it was unacceptable.
Last, in the affidavit you provided under oath, George, which was attached as Exhibit A to the Defendants’ Opposition to Bill and Cindy’s complaint, there were two specific provisions that, in retrospect, appear to be problematic. Number 24 in that affidavit references the following statement that you provided:
The timing of these events is not arbitrary. HDC’s professionals need until March 31, 2020 to finalize four years of audited financial statements and 10-Ks. The company then needs another 90 days in which to solicit sufficient proxies to ensure a quorum at the shareholder’s meeting. Further, the shareholders need time to review and digest four years’ worth of financial information and reports to be fully informed before the meeting.
And, number 31 references the following statement that you provided:
The benefits of providing HDC’s shareholders with an additional 90 days in which to review HDC’S financial statements and reports before conducting a shareholder’s meeting (the approximate difference between the 30-day deadline demanded by the plaintiffs and the June 30 deadline that HDC has already committed to) far outweighs any possible harm.
As I’m sure you will concur, George, HDC did not end up providing this time for shareholders when it issued the materials in advance of the meeting. Perhaps you can explain the disconnect? Or, if not, at least shareholders now have a reasonable understanding as to why you refused to answer shareholder questions during the meeting, and why your first order of business post-shareholder meeting was to reward the insiders. You were pressured into that meeting, weren’t you George, and this resulted not only in a contradiction with your very own arguments under oath in response to the complaint, but also in a vengeful response to shareholders.
Bill,
You forwarded to a number of shareholders the letter you and Cindy Bear received from HDC’s outside counsel on May 29, 2020, in which HDC accused you of abusive litigation, and provided you with thirty days to voluntarily dismiss all claims against the company. Perhaps the meeting that I requested will allow you to elaborate relative to the claims, since your own attorneys abandoned you. Further, I emailed Cindy Bear, but she hasn’t responded to me. It may be helpful to also understand if you simply took advantage of this woman because, inasmuch as you recently sent me a note indicating that there is ‘a lot you don’t know’, I’m quite comfortable in stating that I know quite a bit more about HDC and its history than your partner in the complaint knows. Wouldn’t you agree? After all, she didn’t know what Georgia county in which HDC is located.
After you initiated the complaint process, Bill, I asked for you to answer some very basic questions, such as a) who was funding it, b) were the Canadians (ie, Kowbel et al) behind it, and c) who was going to be on your slate of board candidates if you were successful in overthrowing the current team. As I’m sure you recall, you refused to answer these questions. You seem to conveniently forget, Bill, that from 2013-2017, while you and Kowbel were ‘at the helm’, the company commercialized not a single thing, Neogenomics completely took advantage of HDC, and the company was essentially penniless when you stepped down. Isn’t it ironic that you have now lead the charge on a complaint process that has drained the company of much-needed cash, yet we wouldn’t be in this predicament if you had lived up to your fiduciary responsibilities to shareholders. Perhaps we can chat face to face about it.
Last, Bill, I was informed by Mr. Delmonte that the supposed offer from Vennwest Global Technology to pay off the first McGovern-Dengler loan pursuant to a $2.4 million financing package was not even a ‘real proposal.’ Yet, you incorporated the reference to this proposal in your legal complaint against HDC. Obviously, HDC isn’t going to reveal the terms, given that the company will consider it proprietary, but you aren’t under the same restrictions. If you are forthright, perhaps you can provide a copy to shareholders, so that we can understand who is right, and who is wrong. This appears to be a pretty common problem for shareholders, doesn’t it? Perhaps you can also finally answer the initial questions I presented to you.
Gentlemen, given this information, I think shareholders deserve some answers, and I am once again requesting that you agree to the meeting I requested. I look forward to your response.
Bill and George,
I haven’t received a response from either of you relative to my request for a face to face meeting which I included in my email to you on Monday morning, July 6th. Your lack of a response is disappointing, so I am forwarding this note to each of you to again request that you respond. I certainly hope you will agree to meet, particularly in light of issues that are of very legitimate concern to shareholders.
George:
In my previous email, I referenced the statement in HDC’s 10-k that the company has not received updates from SVM Capital since 2016. While the conflicting information between this statement and the response from Mark Moore is troubling enough, I have been provided with information suggesting that there is a much more significant problem with HDC’s statement.
Based on a business search through the State of Georgia Corporations Division which was conducted by a fellow HDC shareholder, SVM Capital, LLC has been dissolved as of May 4, 2020. This is very troubling information for two primary reasons:
a) If HDC believed that it was important enough to reference the lack of information since 2016 in its 10-k, how is it that HDC didn’t believe it was important enough to issue an 8-k to inform shareholders of the asset being dissolved?
b) Inasmuch as HDC referenced in the 10-k its inability to receive data from SVM Capital, the business information indicates that it is Hong Zhang who is listed under the Registered Agent Name. Further, in looking back at a press release from Manifold Partners a number of years ago, I saw that both Mark Moore and Hong Zhang were referenced as part of the Manifold Vector team.
So let me get this straight, George. You stated that HDC was not provided with information from SVM Capital since 2016, yet the individual with his name listed as the Registered Agent for the LLC is none other than HDC’s Chief Science Officer. That’s right, the same individual that you introduced during the shareholder meeting, and the individual that you mentioned as something along the lines of a ‘great person’. Are you telling shareholders that Hong Zhang couldn’t have helped get the information you were looking for? Further, HDC had the audacity to allow for the asset, in which HDC has a significant stake, to be dissolved without informing shareholders? Perhaps your statement, George, had less to do with the business at hand, and more to do with sending a jab at Mark Moore or someone else? It goes without saying that HDC has some explaining to do so that shareholders are appropriately apprised as to what specifically has transpired.
As you are well aware, shareholders were not appropriately informed when HDC engaged Frazier & Deeter as its public accounting firm in January 2020. It wasn’t until Monday, April 6th that shareholders learned of the engagement, and this occurred on the very first business day after I forwarded an email to HDC on Saturday, April 4th asking the following: What is the name of the accounting firm used by HDC to audit its financials, and on what date did HDC engage this firm for said purposes?
George, as I’m sure you are aware, publicly traded companies have an obligation to report such information to shareholders in a timely fashion, which did not occur. And, since circumstances reveal that you and the HDC team do not even use the bathroom without legal guidance, perhaps you can explain why HDC failed in its responsibility to shareholders, particularly in light of the public complaint process initiated by Bill and Cindy Bear and the pressure to hold a shareholder meeting. Was it someone’s idea to keep us in the dark, perhaps because you thought you’d be a bit vengeful (there is a theme here, George), or did you and your legal team simply slip up relative to a very pertinent matter? Either way, it was unacceptable.
Last, in the affidavit you provided under oath, George, which was attached as Exhibit A to the Defendants’ Opposition to Bill and Cindy’s complaint, there were two specific provisions that, in retrospect, appear to be problematic. Number 24 in that affidavit references the following statement that you provided:
The timing of these events is not arbitrary. HDC’s professionals need until March 31, 2020 to finalize four years of audited financial statements and 10-Ks. The company then needs another 90 days in which to solicit sufficient proxies to ensure a quorum at the shareholder’s meeting. Further, the shareholders need time to review and digest four years’ worth of financial information and reports to be fully informed before the meeting.
And, number 31 references the following statement that you provided:
The benefits of providing HDC’s shareholders with an additional 90 days in which to review HDC’S financial statements and reports before conducting a shareholder’s meeting (the approximate difference between the 30-day deadline demanded by the plaintiffs and the June 30 deadline that HDC has already committed to) far outweighs any possible harm.
As I’m sure you will concur, George, HDC did not end up providing this time for shareholders when it issued the materials in advance of the meeting. Perhaps you can explain the disconnect? Or, if not, at least shareholders now have a reasonable understanding as to why you refused to answer shareholder questions during the meeting, and why your first order of business post-shareholder meeting was to reward the insiders. You were pressured into that meeting, weren’t you George, and this resulted not only in a contradiction with your very own arguments under oath in response to the complaint, but also in a vengeful response to shareholders.
Bill,
You forwarded to a number of shareholders the letter you and Cindy Bear received from HDC’s outside counsel on May 29, 2020, in which HDC accused you of abusive litigation, and provided you with thirty days to voluntarily dismiss all claims against the company. Perhaps the meeting that I requested will allow you to elaborate relative to the claims, since your own attorneys abandoned you. Further, I emailed Cindy Bear, but she hasn’t responded to me. It may be helpful to also understand if you simply took advantage of this woman because, inasmuch as you recently sent me a note indicating that there is ‘a lot you don’t know’, I’m quite comfortable in stating that I know quite a bit more about HDC and its history than your partner in the complaint knows. Wouldn’t you agree? After all, she didn’t know what Georgia county in which HDC is located.
After you initiated the complaint process, Bill, I asked for you to answer some very basic questions, such as a) who was funding it, b) were the Canadians (ie, Kowbel et al) behind it, and c) who was going to be on your slate of board candidates if you were successful in overthrowing the current team. As I’m sure you recall, you refused to answer these questions. You seem to conveniently forget, Bill, that from 2013-2017, while you and Kowbel were ‘at the helm’, the company commercialized not a single thing, Neogenomics completely took advantage of HDC, and the company was essentially penniless when you stepped down. Isn’t it ironic that you have now lead the charge on a complaint process that has drained the company of much-needed cash, yet we wouldn’t be in this predicament if you had lived up to your fiduciary responsibilities to shareholders. Perhaps we can chat face to face about it.
Last, Bill, I was informed by Mr. Delmonte that the supposed offer from Vennwest Global Technology to pay off the first McGovern-Dengler loan pursuant to a $2.4 million financing package was not even a ‘real proposal.’ Yet, you incorporated the reference to this proposal in your legal complaint against HDC. Obviously, HDC isn’t going to reveal the terms, given that the company will consider it proprietary, but you aren’t under the same restrictions. If you are forthright, perhaps you can provide a copy to shareholders, so that we can understand who is right, and who is wrong. This appears to be a pretty common problem for shareholders, doesn’t it? Perhaps you can also finally answer the initial questions I presented to you.
Gentlemen, given this information, I think shareholders deserve some answers, and I am once again requesting that you agree to the meeting I requested. I look forward to your response.
