Corporate Update-June 21, 2011
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June 21, 2011
Dear Fellow Shareholders:
Last week turned out to be an eventful week for Haber in ways that I hadn’t expected and that were not favorable to the Company. Unfortunately, these events unfolded at a time when I was away in Guyana pursuing mining opportunities for the Company, and I did not have an opportunity to review the situation with the Company’s senior management team until I returned to the office this past Monday, June 20th. As a consequence of our internal discussions with Haber management, as well as several discussions with the SEC, with officials at the OTC Markets Group, and with our registered agent in Delaware, we would like to share with you our understanding of the situation in which Haber currently finds itself, and of the actions we intend to undertake to address the situation.
As most Company shareholders probably know by now, the SEC unexpectedly and unilaterally halted trading in Haber stock (both common stock and preferred stock) last Tuesday, June 14th, pursuant to an Order of Suspension of Trading (the “Trading Suspension Order”). The reason given by the SEC for the suspension of trading was that since Haber had not filed periodic reports with the SEC since the end of the Company’s fiscal year on May 31, 2007 (as required under the Securities Exchange Act of 1934), there is therefore (in the SEC’s view) a lack of current and accurate information concerning the Company’s securities and that trading in such securities should therefore be halted. This action was taken by the SEC against Haber and 3 other companies
As many of you may know, the major impediment to Haber filing its periodic financial reports has been the fact that we have a large outstanding invoice owing to our auditors from the last SEC filing we made in 2007. We have been unsuccessful since 2007 in raising the funds necessary to pay this invoice, and have therefore been unable to engage this firm for additional audit work to obtain the audited financial statements for subsequent periods that we are required to file with the SEC as a key part of our periodic reports.
Perhaps the most significant result of this recent SEC action is that broker-dealers registered with the SEC are prohibited by SEC rule (in particular, Rule 15c2-11, which is cited in the SEC press release) from entering any buy or sell quotations on Haber stock. But it is our understanding that neither the Trading Suspension Order nor the related SEC rule prohibits Company stockholders from buying and selling shares of Company stock among themselves without the aid of brokers, nor do they affect your continuing legal rights as a Company shareholder. And none of these SEC actions or rules has any effect on the Company’s technologies or its ability and efforts to commercialize them.
Subsequently on Thursday, June 16th, the SEC formally notified Haber that it had entered an Order initiated an Administrative Proceeding (“Administrative Proceedings Order”) for the purpose of either suspending for a period not to exceed 12 months, or revoking entirely, the registration of Haber’s stock for the foregoing reasons. This proceeding will be heard before an Administrative Law Judge, and we understand that the hearing is scheduled for July 8, 2011 in Washington, D.C
It is my intention that Haber will respond in a timely fashion to the SEC’s Administrative Proceedings Order, and that we will attend and participate in the Administrative Law Judge hearing. It is possible, however, that in discussions with the SEC we will reach an agreement regarding the deregistration of Haber stock that will make such a hearing unnecessary. As with the Trading Suspension Order, we do not believe that any adverse outcome to the Administrative Law hearing will affect any stockholder’s continued ownership of Haber stock, except for the fact that brokers will be prevented by SEC Rule 15c2-11 from entering quotes on Haber stock.
In the process of reviewing the SEC’s filings, we learned for the first time that Haber had been the subject of a prior SEC consent order (entered long before any of us joined the Company) relating to an earlier failure to file periodic reports with the SEC, and also realized that the Company had failed to file its Delaware annual reports on time, which led the Delaware Secretary of State to void the Company’s corporate charter. On this last issue, we intend to revive the Company’s corporate existence (as permitted under Delaware law) and we have submitted to the Delaware Secretary of State the paperwork and fees that our Delaware registered agent has indicated is necessary to accomplish this process. The filing will return the Company to the status quo that existed prior to the charter being voided. You will all continue to be stockholders in Haber, as if the voiding of the charter had never occurred. I am personally discouraged at this inadvertent lapse of our corporate existence, and have taken steps to ensure that such an event will not occur again. We are committed to making Haber a success, and maintaining its corporate existence is key to this endeavor.
As I believe most of you know, we regard Haber as being a technology-rich Company that has been chronically cash-poor. Over a number of years, your CFO, Peter D’Angelo, and I have provided from our personal resources the bulk of the funding needed by Haber to maintain its operations. Most of such funding has been devoted to maintaining a lean staff, perfecting the gold extraction/recovery technology, and working to put together a gold processing deal that would generate the funding for Haber that it needs in order to meet several important financial requirements. One of the most important of these financial requirements is to fund the costs for Haber to become current in its required SEC periodic reporting obligations. On the strength of the technologies we have worked so hard to perfect over the last 30 months and the multiple projects we are working on currently with various mining concerns and in various countries, we are committed to continuing our efforts to achieve a transaction that will be of benefit to all of our stockholders.
I thank you for your continued interest in and support of Haber and its management team.
Sincerely,
Albert B. Conti, CEO
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