A group of longstanding shareholders of Sernova Corp who currently own approximately 12% of the Company’s shares have concerns regarding the performance of Sernova’s Board.
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
Company Codes: Frankfurt:PSH, OTC-BB:SEOVF, OTC-QB:SEOVF, Toronto:SVA
