Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Just something I posted on the Yahoo board after reading the June 2nd 8-k:
Hi everyone. I've been a bit active on the board lately, so I don't blame you if you tell me to back off. However, there are some 'themes' that have seemingly started to develop with HDC, and I think it bears outlining. After all, it doesn't matter whether some of you are more consistently negative toward HDC, or more consistently positive, since we are all (as some have said) just bag holders. And, for what it's worth, there are so many of us that have been agonizing over this for MANY years.
If you don't mind, allow me to raise an issue with the June 2nd 8-k that announced HDC's decision to 'award' (once again) the insiders for their ongoing contributions to the organization. To me, it's infuriating, since my personal perspective is that they are just giving shareholders the middle finger, and they decided to dole out the money and shares prior to any infringement protection or monetization of the IP. Accordingly, when I initially read it, I focused on the details of the options and cash distributions. Having re-read the 8-k, I noticed something that doesn't make sense. Therefore, if any of you are accountants, or otherwise know someone who might be able to weigh in, it might be helpful. Allow me so summarize:
A statement in the 8-k says (as copied and pasted): The aggregate computed value of these options is $268,078, and this amount will be charged as an expense during the third quarter of 2020. Since I am not an accountant, I can't honestly provide an intellectual argument on this statement, but doesn't it seem inappropriate that the expense will be charged in Q3? June 1st was in Q2. And, since the wording does not signify that the 'awards' were, in any way, based on anticipated performance in the future, and since the options are immediately vested, how does the company explain that the expense won't be allocated in Q2?
On the one hand, this may seem like a small matter, but based on the circumstance with this company and its complete disregard for shareholders, I think it warrants some questioning. If there is a reason for not allocating the expense in Q2, we should all know why. On the other hand, if it was a 'typo', we should all know that as well, since we've seen other 8-ks (or lack thereof) that weren't appropriately filed (ie, when the engaged the public accounting firm in Jan, they didn't file the 8-k, which was inexcusable).
I'm going to ask them (as I did a while ago regarding the accounting firm) if the decision to allocate the awards as an expense in Q3 was a mistake, or if there is a reason they want the allocation delayed. I will circle back.
Regardless of the response, I'm not so sure how much of this nonsense with HDC leaders should be tolerated.
God, was I absolutely an target with my March 30 email. You have all made Quirk and Bear look like heroes. And, of course, you purposefully took advantage of me. Wrong move. You are all pond scum. I don’t think I can recall running into a bunch of scumbags in my life.
Enjoy your fair value of .0125. Nobody else was quite that lucky to get it at such a low point. You are just lucky, I guess. For now.
In connection with their election to the Company’s Board of Directors at the Shareholder Meeting and in recognition of their continuing contributions to the Company, on June 1, 2020, the Company granted to Mr. William Fromholzer, Ms. Colleen Hutchinson, Mr. Ed Morrison, and Mr. James Murphy each a one-time cash payment of $20,000 as well as an option to purchase 3,000,000 shares of the Company’s common stock. Additionally, the Company granted to Mr. George McGovern and Mr. Marty Delmonte each an option to purchase 5,000,000 shares and 4,500,000, respectively, of the Company’s common stock. Furthermore, the Company agreed to increase Mr. Delmonte’s salary by $25,000 to $150,000. These option grants are consistent with what has been granted to other board members and management of the Company. The options immediately vest, have an exercise price of $0.0138 and expire on June 1, 2030. The exercise price is based upon the closing price of the Company’s common stock on the date of the option grant. The fair value of each option granted is $0.0125 and was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: dividend yield at 0%, risk-free interest rate of 1.84%, an expected life of 5 years, and volatility of 147%. The aggregate computed value of these options is $268,078, and this amount will be charged as an expense during the third quarter of 2020.
Additionally, on June 1, 2020, Mr. McGovern and the Company have agreed to satisfy the accrued wages for Mr. McGovern. Mr. McGovern will forfeit his accrued wages for the following considerations. The Company’s Board of Directors approved the conversion of up to fifty percent of Mr. McGovern’s accrued wages as of December 31, 2019 into common stock and the remaining balance will be converted into a note payable to Mr. McGovern. The conversion of the accrued wages and the convertible features of the note payable will convert into common stock of the Company and will have a conversion price of the $0.0138. The conversion price is based upon the closing price of the Company’s common stock on June 1, 2020.
Ok, Wednesday is going to be wild. Take a look at the 8-k filed by HDC. Instead of representing shareholders, we have another 'benefit the insiders first' episode.
I sent a note to one of the board members that I am going to the press, and you can be certain that is happening.
time to make our voices heard. this is going to get ugly, and fast.
Thanks for sharing. Here is HDC response to my question.
Thank you for your email. Please feel free to email any ideas you may have to this email address. We would be more than pleased to pass them along to Dr. Zhang.
If you feel this method or others are "pretend", that of course is your opinion. However, we are pleased to entertain your ideas as outlined above.
Just from noodling around a little on the internet, I came across a very interesting article about use of AI by consultancies, advisory firms, etc. As it relates to the Big 4 Accounting Firms (EY, KPMG, PwC, Deloitte), here is a reference that I found:
The growth in AI gives them a chance to establish a strong practice in an emerging area. AI is a technology with implications to many business areas where talent is still scarce. Big 4 accounting firms are some of the largest employers in the world and they have deep enough pockets to make large investments in this space and they have the business development know-how and resources to make partnerships across the AI ecosystem to deliver end-to-end services.
Do we think HDC reached out to any of them? Likely not. We're stuck in the mud waiting to figure out how to protect our IP, and we're stuck in the mud waiting for feedback from a research institution. Meanwhile, the rest of the world is moving forward. I reviewed EY's website, and saw a succinct summary of the guy who heads up the organization's AI Lab, and he is responsible for projects driving strategic transformation of how the company operates, competes, and provides services. He is also strengthening relationships with start-ups and academic communities.
So what is our leadership doing? Anybody care to pick up the phone and tout our SVM-RFE? Of course not. Our team can't even get an update from SVM Capital, which we partly own. This do nothing and say nothing approach needs to stop. We need leadership with a focus on accomplishment.
Everyone, here is an email I sent to the HDC team via the HDC website tonight:
As a shareholder of HDC since 2005, I am concerned about the lack of creativity, focus, urgency, and commitment on the part of the HDC team. I am also deeply troubled by the recent shareholder meeting, which left shareholders not only frustrated, but literally offended by a tone of arrogance on the part of the directors. The shareholder meeting was, to say the least, troubling and disappointing, and it in no way, shape, or form, instilled any shareholder confidence in the current team’s ability to move the company forward and deliver a return for investors. Further, the only ‘passion’ displayed related to the ongoing legal dispute with a former director, and the manner in which HDC addressed this issue was alarming, since it may have opened HDC up to further litigation.
Accordingly, I am requesting a meeting with Hong Zhang in which I can run ideas by him that I believe can be of value to the organization. I would appreciate your collaboration in allowing for this meeting, which certainly can be telephonic, to occur. I’m asking for a 1:1 meeting in which Dr. Zhang and I can legitimately discuss ideas that could deliver value to shareholders, not a ‘pretend’ meeting in which other directors sidetrack the issues.
Thank you for your consideration, and I’m hopeful that you can arrange for this discussion in a legitimate manner.
Not sure what others think, but my thought is that the current HDC team can't use the bathroom without an attorney present. This, coupled with their obvious disdain for shareholders as evidenced by their shareholder meeting, leads me to believe that we all should start informing them how to run the business. They clearly don't have a clue.
Accordingly, I am sending an email via the website to ask for a meeting with Hong Zhang. Why not? Are our ideas 'unworthy'? They can't be any worse than whatever ideas the current team has, since they sure haven't gotten anything done. Let's see what the response is.
I will convey it once received.
One would think that at least one of the six board members would have a dose of common sense, and might raise his or her hand after going back and listening to their own shareholder meeting to signal that ‘gee, guys, maybe we didn’t do a good job of instilling confidence with our shareholders.’ That would be too much to expect.
Since all common sense is completely gone, as noted by the fact that the CEO signaled that the company has nothing in the pipeline and nothing lined up in the way of financing to support litigation to protect the company’s IP, what could possibly be going through their minds? Doesn’t it stand to reason that they should simply start taking action? Perhaps at least trying different things? What about something like this:
1. Let’s start working with a sense of urgency, instead of revealing that you are only capable of accomplishing one thing at a time;
2. Inform shareholders that you will now make a concerted effort to be more communicative. We realize you can’t divulge proprietary info, but that doesn’t mean you can’t post a monthly paragraph on your own website to let shareholders know you are at least trying. You’ve lost everyone’s respect and confidence, so do something to restore it;
3. Since the delay in issuing the 10-Q was embarrassing and laughable, why don’t you just hire a couple of interns that can help pull information together, with little to no cost. Get it done and stop the nonsense;
4. On your own website, you reference the myriad of applications for SVM-RFE, yet it is clear you aren’t doing anything to take advantage of them. How about sizing each opportunity up, and developing a potential plan of action for each;
5. Spend $300 to create an LLC that can operate as a wholly-owned subsidiary of HDC, but with a focus on a sector or two outside of biomarker discovery;
6. Spend another $300 on a separate LLC through which HDC creates an advisory service, with SVM-RFE the ‘differentiator’ for things like predictive modeling, population health strategies, etc.;
7. After you set these up, announce it to shareholders via the website to generate some enthusiasm;
8. Since we have limited capital, why don’t you get creative and post a position or two aimed at trying to attract individuals with tremendous technical and/or sales skills who might desire to take a gamble on an opportunity to truly develop a business segment. No salary now. Compensation based solely on success, with the opportunity to run those businesses as they develop. What’s the harm? A few dollars to post a job or two?
9. If you can’t fight Intel, at least try to take the SVM-RFE to Nvidia, Google, IBM, AMD, or others to strike a licensing agreement. If we are letting the IP go to waste, at least take advantage of a co-licensing arrangement for our IP.
10. Reach out to Albitar and see if he wants to run with the prostate liquid biopsy test via his CA lab; for that matter, ask him if Neo developed tests using SVM-RFE (and why haven’t we pursued the infringement further with them with the SEC, once the arbitration was settled?);
Perhaps I’m making too much sense. That said, I think I accomplished more in the last 10 minutes than the HDC team has in the last 5 months.
LocWolf, I saw your post about the SVM Capital issue in the 10-k. It's mind boggling. Some other HDC statements were also pointed out to me.
For example:
Dec 6 shareholder letter: We believe that a third party or parties are infringing one or more of our patents. Since before the win at the USPTO we have been working closely with special counsel to evaluate and plan the best legal course of action for this matter. We have also been in discussions with certain entities concerning the financing of such potential actions. Although no agreements have been reached, we are pleased and encouraged by the progress made to date.
April 10 8-k: The Board has taken this action in part due to the loyalty Mr. Delmonte has displayed during his instrumental role in the recent turnaround of Health Discovery Corporation and other partnering initiatives.
10-k: The management of SVM Capital, LLC has not provided Health Discovery Corporation with any updates since September 2016. Health Discovery Corporation is evaluating its rights regarding the license agreement with SVM Capital, LLC.
So, obviously, we're all wondering the following: What's going on here? Since they were pleased and encouraged by progress to date in December relative to infringement action, did HDC just decide to put discussions on ice for 5 months? As it relates to the promotion referenced in that April 8-k, I love the reference to partnering initiatives. Where are they? And, of course, this SVM Capital reference in the 10-k certainly has me baffled. Perhaps someone at HDC might suddenly realize that it would be a great idea to pick up the phone and make a call to get an update?
This is beyond unacceptable.
Agreed. I believe your thoughts are shared by so many of us. It's literally been exhausting being a shareholder of this company, and the current team doesn't seem to get it at all.
I posted this on Yahoo:
Sorry, everyone. When I summarized the info in a post below about the issues I took away from the meeting, I should have included the issues on the proxy. There was a quorum, and all issues recommended by the board received a majority vote. In other words, the existing team is in place for another year, and we are now faced with 900 million authorized shares of common stock and 90 million authorized shares of preferred stock.
All I can say is 'this is brutal'.
So instead of finally issuing the 10-k, the board thought it appropriate to announce the promotion of one of its board members. Hard to even imagine how out of touch these board members are with reality.
Look at this statement in today's 8-k:
The Board has taken this action in part due to the loyalty Mr. Delmonte has displayed during his instrumental role in the recent turnaround of Health Discovery Corporation and other partnering initiatives.
Two questions obviously come to mind. 1. What turnaround of HDC? The stock is at 2 cents, and the 10-k is mysteriously delayed due to COVID-19, even though it should have been issued long ago; and 2. What partnering initiatives? If there was a partnership that was solidified, HDC had an obligation to disclose it.
Perhaps I'm just dreaming all this, or perhaps the board just wants to have some fun at the expense of shareholders.
Couldn't make this story up if you tried. The lack of judgment is beyond my wildest comprehension.
Can I get help from other shareholders relative to what should be a simple question? In looking back through HDC's SEC filings, I saw the filing dated Jan 29 2018 which signified the following:
On January 23, 2018 Health Discovery Corporation (the “Company”) received the resignation of Frazier & Deeter, LLC (“Frazier & Deeter”) as the Company’s independent registered public accounting firm. Frazier & Deeter had been the Company’s independent registered public accounting firm since December 22, 2014.
I looked back through all subsequent filings, but didn't see any evidence of a filing related to the public accounting firm that may have replaced Frazier & Deeter, LLC. Did I possible overlook the filing that references this? Or, if there wasn't a filing, does anyone know which firm provides these services for HDC? I would think this is at least somewhat important, since wouldn't the accounting firm be the one putting its stamp of approval on the 10-k that HDC was presumably working on?
Until the 10-k is issued, I realize that the board can't disclose certain proprietary information, but does the board have an obligation to tell shareholders what firm represents us?
Any guidance is appreciated. And, if nobody seems to know what firm provides the accounting, perhaps we should all email HDC to inquire. After all, the board signified in its shareholder letter dated Dec 6 2019 that all shareholder inquiries would be addressed as appropriate, and I can't imagine that HDC has a legitimate right to refuse disclosure. Am I wrong?
Hey LocWolf. They never intended to have the meeting. They apparently like to mislead people, as if it's a game.
Putting the shareholder meeting aside, this company now continues to remain non-compliant, and will remain that way for an indefinite period of time. True to form, the board wouldn't divulge what the timing will be. Further, there is absolutely no indication that the company even has a plan.
I don't think I've ever run across a group of individuals, like the ones on the HDC board, who have such a lack of integrity. It's now beyond comprehension, and I just wonder what they do all day.
Must be nice to just sit there and dream up ways to create ongoing anguish for shareholders. This makes Quirk and Kowbel look like geniuses.
It appears that shareholders should have a bigger concern than simply the frustration caused by HDC's decision to delay the issuance of the 10-k. I believe the board did this not simply because of the inability to complete its reporting due to COVID-19, but because it wants to avoid the shareholder meeting altogether. Let's examine what has transpired.
On March 20th, HDC filed an 8-k stating that the date of the shareholder meeting would be May 27th, and that the record date for the meeting is March 27th. Then, on March 30th, it filed the 8-k signifying that it was taking advantage of the extension. It appears pretty obvious to me that the board knew on March 20th (and likely well before then) that it wasn't going to file the 10-k. The following is a ludicrous statement in its March 30th 8-k: In particular, COVID-19 has caused severe disruptions in transportation and limited access to the Company’s facilities, resulting in limited support from its staff and professional advisors. This has, in turn, delayed the Company’s ability to complete its audit and prepare the Report. The company's facilities (don't they have one employee in shared office space)? Disruptions in transportation (what about email)? This 10-k should have been filed well before the end of March, so the board is clearly being very deceptive and is shrewdly (disgustingly) taking advantage of the pandemic to make sure the meeting doesn't happen.
As the board fully knows, proxy rules require the company to provide certain disclosures in a proxy statement to its shareholders, together with a proxy card in a specified format, when soliciting authority to vote the shareholders’ shares. Proxy statements describe matters up for shareholder vote, and include management and executive compensation information if the shareholders are voting for the election of directors.
So as we piece this little strategy together, and realize that if the COVID-19 issue prevented them from pulling together their reporting, then COVID-19 is certainly going to prevent them from pulling together the required documents with enough advance notice to actually conduct that May 27th meeting.
I guess the big question now is: When does HDC come clean and inform shareholders that the meeting is not going to take place? Perhaps they will wait until May 26th to let us know the meeting is cancelled.
Thanks so much for providing that, and other, information LuckyMyDog You've actually been much more helpful than you might think.
Post on Yahoo board:
The stock manipulation is interesting. Zee and others, perhaps we need to look at the Series C holders. The HDC 10-k for the period ending fiscal year 2015 includes, on p 19, the section Sales of Unregistered Securities. Kowbel was in charge at that time. The information indicates that the preferred shares were accompanied by 3 cent warrants, and that they could be converted to common shares. It is interesting that they could sell at 4 cents and still benefit. Another interesting thing that HDC shareholders should know is that I personally received an email from Kowbel in January 2014, which included the following: "a couple of my colleagues each bought 1mln preferred series c shares at $0.08 with $0.08 warrants. the raise is not public knowledge only because it cannot be solicited. only accredited investors can participate and they approached me to find out how they could help once they found out what i was doing for free."
So as we start to tie all this together, including my ongoing argument that there is no way the complaint process is being funded by the two plaintiffs, coupled with the fact that the complaint references a $2.4 million financing package that was supposedly offered by Vennwest Global Technologies, which is in Canada - where Kowbel is from - the circumstances look deeply concerning. So concerning, in fact, that I believe there needs to be a formal investigation of what is actually going on. Oh, and by the way, Ms Bear was very eager to get her complaint information 'published' for all of us to see. Yet, she's gone totally silent on us when we've asked her to answer some very basic questions.
Putting aside all the information I've been outlining about my concerns with the complaint process, I'm reaching out to see if any other HDC shareholders have a solid grasp on what drives stock price. Reason I ask is that, as we've witnessed, the price trended downward at a time that seems to line up with the complaint process. Yet, very recently (and after I started posting my concerns), the stock price pops back to 5. Am I making too much of this, or does anyone think there might be a correlation?
If you think about it, and based on the message boards over the years, there are a finite number of HDC investors who have stuck it out over a long period of time, and it doesn't appear that we're selling. Although we've been desperate for returns, with many underwater for so long, my gut tells me more or less everyone is hanging on. So who is really selling?
The only thing that comes to mind is that when the old regime was in place, they lined up a pretty sweet deal for themselves. I need to go back and see if I can get details on it, but I'm sure there were options to potentially exercise, or shares to sell, etc. Accordingly, since we know from the complaint that the group in Canada presumably put an offer on the table, and we know that the current complaint process has to be funded by someone in the background, do you think it's plausible that these guys have been selling, while actually not losing, and using proceeds to help fund this complaint?
Perhaps I'm making too much of it, but I'd sure like to get others' perspectives on whether or not this could actually be at least possible.
The more I dig into this, the more I'm realizing that this complaint process is much worse than even I thought. And, regardless of how each of us feels about the plaintiffs or the defendants, I believe we all deserve the opportunity to understand who is trying to legitimately represent us.
Last night, I went back onto the site that James posted, and reviewed it much more thoroughly. I went across the headings at the top, and after clicking on them, downloaded each document. Then the light bulb went off for me. This site wasn't set up merely to allow one of the plaintiffs to provide shareholders with her letter of concern and to provide us with copies of the complaint documents. The site also includes information pertaining to phone calls with directors and even attorney to attorney correspondence, and the posting of this information is clearly for the purpose of attempting to shame not only the current directors, but also counsel representing HDC. I would assume, therefore, that any future correspondence between attorneys might start to feel a little awkward. Further, it leads to the question as to whether or not the calls with the directors were taped without their knowledge and consent. Thus, I finally realized why the other plaintiff, who owns 13 million shares, didn't attach his name in any way to the site, he didn't sign the letter, nor did he at all mention anyone who is obviously helping to fund this process. In other words, to the extent this gets ugly, the 'silent' plaintiff (not using his name in the hope that this message won't be taken down) will simply point to the 'active' plaintiff and just blame her for supposedly publishing all this information. Isn't he shrewd.
Another sad part about this entire scenario is the strong possibility that the 'active' plaintiff, who gives the appearance of taking the lead on this process, likely doesn't have any idea about some of the information actually in the complaint. For example, the complaint references Wennvest Global Technology Ltd, based in Canada, which presumably offered a valid financing proposal for the company. I can't wait to see if those details are made public but, in any event, I wouldn't be surprised if she actually knows nothing about it. After all, all circumstances around this entire complaint process are pointing the realization that she is a pawn for the mastermind ex-director and his compadres up north, and doesn't even know it.
If you read the complaint filed by Bear and Quirk, you will see a reference to a company by the name of Vennwest Global Technology Ltd which, based on what the plaintiffs say, offered to pay off the first McGovern-Dengler loan pursuant to a $2.4 million financing package. Obviously, I googled this company and saw that it is based on Canada which, not surprisingly, makes one think of the guy who ran HDC into the ground: Kevin Kowbel himself. So this is interesting, since Bear and Quirk make no mention of his involvement, and they want to make shareholders believe they have funded the complaint by themselves. In other words, the picture gets clearer and clearer that Quirk and Kowbel have teamed up yet again, to figure out how they can make another mess.
Dear Ms. Bear and Mr. Quirk,
It is evident that you both expended considerable time and resources pulling together the complaint against Health Discovery Corporation (HDC). You have obviously engaged a reputable law firm, and the attorneys representing you are clearly professional and have done their best to prepare arguments supporting your complaints. Based on this, something isn’t adding up, so I thought I’d outline it for you.
One would think that in hiring counsel to represent you, one of your primary obligations is to act in good faith and divulge all relevant information for them in an honest fashion. Yet, this doesn’t appear to be consistent with the manner in which the two of you have presented the information to HDC shareholders. Again, particularly since the law firm representing you is reputable, didn’t you have an obligation to be forthright with the firm’s attorneys on all fronts relative to your efforts?
Obviously, it doesn’t stand to reason that the two of you have organized this entire complaint process by acting alone. Particularly in light of the fact that there is no guarantee you will prevail, coupled with the fact that even if you were to prevail there is no direct return to you of the legal expenses (unless, of course, your goal is to pilfer the company). In other words, it simply doesn’t make sense that you would pay for these expenses out of your own personal pockets just to show other shareholders that you are interested in success for all of us. You’re clearly not that nice. Let’s look at this another way. If you were honest in divulging to your legal representatives the other individuals who have been financially supporting your efforts, then why have you publicly portrayed, via message boards, to other HDC shareholders that you are somehow acting on your own?
Additionally, an obvious component of your strategy has been to personally and/or with the help of others engage in a campaign over the past few months to continually post on message boards in a manner that is detrimental both the company and to its shareholders. Many shareholders are fully aware that it is not a coincidence that posters, whom we have never heard of over the years, have miraculously popped up, sometimes changing aliases, for the sole purpose of smearing the company and the current leadership team.
Do you know what the said part about this complaint process is? Not only have you been totally disrespectful to HDC shareholders, but you have also been disrespectful to the very attorneys representing you. Since you are keenly aware of my position, you obviously know that I do not at all support your legal representatives’ arguments. Yet, they are doing their job, and there is absolutely no reason for me to disrespect them and their professional obligations. On the other hand, given your actions, you should be ashamed of yourselves for not being fair to those representing you. If you disagree, then let’s play this out with a hypothetical discussion between you and your attorneys.
Your attorneys: Have you provided us with all relevant information in an honest and forthright fashion?
You: Absolutely. And, by the way, as part of our strategy, we are going to set up a portal, download the legal documents for other shareholders to view on message boards, and include a letter from poor Ms. Bear, who will portray that she was somehow shocked to learned things that most shareholders already know, even though she’s been around since 2006. Of course, we will make sure Mr. Quirk won’t sign it, even though for over two years he has been relentless in his desire to get back on the HDC board and has reached out to shareholders to ask how many shares they own. Plus, we will use a guy named “James”, who will pop up out of nowhere, to post it on message boards and ‘say the right things.’ And, even though all this will cost a lot of money, we will make it look to all other HDC shareholders as if just the two of us paid for it out of pocket, even though that doesn’t make any sense. Further, we have already been getting the support of other individuals to post negative messages continually, and we will even change the alias a number of times to make sure it looks like there are more shareholders than there really are who are expressing concern about the company. Oh, and by way, even though we will push hard for an emergency shareholder meeting for the sole purpose of electing a new board, we won’t give other HDC shareholders ample advance notice of whom the individuals are that we want elected. In other words, it will be neat to give them very little notice, because we don’t want them informed.
Ms. Bear and Mr. Quirk, how do you think your legal representatives would have responded to you if they had known all the details about your message board strategy, and who might be behind it? Do you think they would have responded as follows?
“Cindy and Bill, all this is a really cool idea, and we especially love the manner in which you intend to deceive the other shareholders. The two of you are absolute masterminds, and we especially like the fact that Mr. Quirk won’t have the balls to sign the letter, which makes it even cooler because the other shareholders will be tricked into believing the poor little Cindy story. Oh, and your intention to provide very little notice to shareholders about the slate of candidates you want on the board is an unbelievably perfect strategy, since you don’t want to the others really knowing anything. By the way, even though it stands to reason that others are helping to fund this approach, let’s keep it our little secret. It’s more powerful when the other shareholders think you are laying out tons of your own money because you want them to be genuinely represented. Oh, and that approach whereby you are using others to post ongoing negative messages, not to mention the changing of aliases, is an absolute scream! You guys are too much!!! We love you, and we love this approach, so GO FOR IT you rascals!”
Somehow, Ms. Bear and Mr. Quirk, I don’t think they would have responded in this fashion, which reinforces that the two of you have little to no respect for anyone but yourselves. Please go away, tell your friends to go away, and leave the company alone. You’ve done far too much damage already.
Dear Ms. Bear and Mr. Quirk:
Now that shareholders are fully aware that you have been deceptive in your attempted approach to elect a new board of directors for HDC, it is time to start cleaning up your act by being forthright with all of us. Let’s start with two questions that shareholders have a right to know:
1. Who are the individuals on your proposed slate of new board members?
2. Who is actually funding, or helping to fund, your complaint process?
If you profess to have shareholder interest in mind, you shouldn’t have any problem answering these questions. And, of course, you can easily have “James” post the answers to the message boards via the portal that you established for this cause.
And, just as a gentle reminder, Ms. Bear, as I mentioned in my previous letter, you really need to clean up your foul mouth.
Holy cow. Something crossed my mind about this entire scenario with the plaintiffs, who just want a shareholder meeting. Based on the documentation, Cindy personally has 1.3 million shares, and Quirk has over 13 million, but the shareholder letter is strategically scripted only from her because she, in her words, was 'shocked to learn' that, among other things, HDC's filings weren’t up to date. Of course, this wasn’t news to those of us who have been shareholders of HDC for all these years. In other words, it was stated this way for ‘effect’. Yet, considerable thought, time, and resources were put into orchestrating the entire process, including not only meeting with attorneys, filing of the complaint and the emergency motion, setting up the site which enabled them to download the legal documents, and crafting the letter which Bill Quirk decided not to sign. I guess they hoped it would be more impactful if it came from poor Cindy who, on the one hand, apparently wasn't aware of HDC's Dec shareholder letter but, on the other hand, suddenly appears to know a bit about Georgia law.
With all this being carefully planned out, James pops up out of nowhere, posting wonderful commentary that the 'emergency' shareholder meeting is necessary because shareholders have everything to gain and nothing to lose, regardless of anyone's motives. Of course, he makes no mention of the fact that we already know the meeting is happening soon. It is this latter phrase “regardless of anyone’s motives” that scares me immensely. Mr. Quirk, along with Mr. Kowbel, were taken advantage of by Neogenomics, and failed in their fiduciary responsibilities to shareholders. Clearly, he has intentions that aren't in my best interests, and HDC shareholders should be extremely concerned because, after all, we simply need to look at the manner in which he is conducting himself with this entire complaint process. Additionally, given that legal fees are not inexpensive, and given that this was very well planned out, it is fair to consider the possibility that someone else (not just Cindy and Bill) are helping to fund this process, and that’s a scary, but unfortunately very realistic, proposition.
So let me get back to the thought that crossed my mind. We’ve never heard of James, but James miraculously appeared on the scene very recently, and had the ability to provide us with the complaint documents and letter, which came from an organized site that had been created. In other words, I believe James is Bill.
Hi Bill!
Hey Lucky My Dog
You related to either Bear or Quirk? Employed? A Friend?
Hell JJJames. As I posted on the Yahoo board:
I'm posting this request to see if James might be able to help me out. James, thank you again for posting the letter from one of the plaintiffs who filed the complaint against HDC. More importantly, I'm making the request so that all HDC shareholders can get on the same page, regardless of whether or not they have been critical in their posts, or positive in their posts. Those of us who have been around for the long haul all have one thing in common. We want results, and we also want to make sure that the information being conveyed is being communicated in an honest fashion.
James, you obviously have the ability to post the plaintiff's letter (one of the plaintiffs, since Mr. Quirk sits silently in the background, even though he's the mastermind). Since you have this ability, I am asking for your assistance in posting a letter that I personally received from Neogenomics outside counsel, not only threatening me (although I've always just been a shareholder of HDC, not a representative), but also disparaging HDC.
James, your posts signify that all you want is for shareholders to make money, regardless of the motives of anyone such as Mr. Quirk. Thus, I don't think you should have concerns helping me out. Don't suddenly disappear on us, James. Feel free to respond.
Can you please coordinate with me to help me get that letter posted for all shareholders to see? From there, I'll be happy to explain things for shareholders.
Good point, king oil. The previous team has some explaining to do. Unfortunately, however, they are still up to no good. I think HDC shareholders need to use good judgment if those guys start to stir things up. The current team has finally positioned the company favorably, and the old regime clearly did not have shareholders' interest in mind.
Good things ahead, and any trouble by previous directors will only hurt the company and its shareholders. We've agonized for too many years, and we don't deserve to have them creating more problems.
SVM-RFE and Neogenomics
In HDC’s September 20, 2019 SEC filing relative to the Patent Term Adjustment of almost five years, the company included the following:
"As a result of the issuance of the SVM-RFE Patent, Health Discovery Corporation now has the right to exclude others from developing, commercializing or licensing this patented technology without the uncertainty of the Interference or concerns over the ownership of the all SVM-RFE patents. Additionally, Health Discovery Corporation is taking the necessary steps to protect its sole ownership of SVM-RFE patents against infringement."
As noted, HDC has the exclusive rights to the SVM-RFE Patent, and likely has the opportunity to seek damages from multiple organizations. I assume that Intel is at the top of the list, but time will tell as to how HDC will address historic infringement, not to mention how or if HDC will successfully license the technology. In any event, with the above-referenced statement from HDC in mind, I started to think about Neogenomics (Neo).
Once the arbitration ruling relative to HDC’s dispute with Neo was announced, and certainly after Neo issued the required compensation to HDC, it is logical to assume the HDC may forever be done with any further dealings with Neo. Since the ultimate arbitration findings revealed that Neo was not a trust-worthy business partner, I would personally applaud HDC for refraining from any future collaboration. Yet, I continue to wonder whether or not we’ve heard the last of Neo……not because of collaboration, but rather because of either possible infringement and/or a possible buy-out.
My thoughts around this don’t relate at all to the issues which were reviewed by the arbitration panel (ie, flow cytometry, liquid biopsy prostate test, etc). Rather, they center around SVM-RFE, which actually wasn’t an issue addressed in the proceedings (more on this below). And, as it relates to SVM-RFE, I believe there are two distinct considerations which might not come to pass, but which I believe may have merit. Allow me to outline my thought process around this.
Several years ago, HDC included in one of its filings a statement that, at the time, deeply concerned me, although the issue didn’t rear its ugly head until late 2016 and 2017, when Neo first started to publicly state that it didn’t use HDC intellectual property, and began taking impairment charges on it. When I first read this statement, I sensed that something was wrong, and certainly knew that HDC’s former CEO was in over his head. The statement, as cut and pasted from HDC’s May 15, 2015 10-Q, is as follows:
"The Company believes our relationship with NeoGenomics is instrumental in our medical and diagnostic testing development. We further believe the majority, if not all, of our applications in the medical field will be done in conjunction with NeoGenomics."
Obviously, as circumstances have played out, it is clear that Neo believed it had HDC in its back pocket and, for what it’s worth, I agree that they did (for a period of time). It wasn’t until our current CEO took a firm stand to protect HDC’s rights, as evidenced by the January, 2017 SEC filing which included HDC’s written notice of complaint to Neo, that Neo’s irresponsible strategy with regard to HDC was being challenged.
This leads me to one of my two considerations: a possible HDC buy-out. When the above-referenced 10-Q was published by HDC in 2015, Neo was obviously running roughshod over HDC’s previous CEO, as evidenced by HDC’s desperate statement about exclusivity while, at the same time, Neo was using and/or attempting to use HDC’s intellectual property without compensation. Accordingly, the circumstances reveal that Neo had firm control over HDC and, if the situation had been handled skillfully (or do I say ‘ethically’?) by its senior executives, Neo would likely have ultimately either acquired HDC or at least maintained the upper hand as HDC’s primary business partner. In other words, inasmuch as Neo has enjoyed tremendous growth, my supposition is that its senior executives are having sleepless nights wondering what ‘might have been’. It goes without saying that the USPTO ruling granting HDC exclusive rights to SVM-RFE, coupled with HDC’s success in being approved for a five-year extension of the patent term, provide HDC with realistic opportunities that, if under Neo’s resources and control, could be absolute game changers for the laboratory. It was right there for the taking, and they let it slip away with what I consider to be short-sighted thinking.
With this in mind, let’s turn our attention to my other consideration: potential infringement of the SVM-RFE patent. I suppose there is a chance that Neo never ended up using the technology to advance its laboratory test portfolio although, if they didn’t, it would conflict with their stated intentions. In Neo’s May, 2012 10-Q, the company included the following:
"We are also focused on innovation because we are committed to being a leader in oncology testing. With the recent advances in genomics, proteomics and digital pathology, frequently large amounts of data are generated and managing this data is difficult without the aid of computer-based algorithms and pattern recognition. We believe that the best system for pattern recognition and data analysis is a technology known as Support Vector Machine or “SVM”, especially when combined with a technology called Recursive Feature Elimination or “RFE”.
Health Discovery Corporation has an extensive array of pending and issued patents surrounding SVM and RFE technology. By licensing this technology and combining the expertise that already existed at Health Discovery Corp with our expertise in genomics, proteomics and digital imaging, we believe we are well-positioned to begin developing innovative and proprietary new products.
Our goal is to develop new assays to help our physicians better manage their patients and to enable them to practice evidence-based medicine tailored specifically for each of their patients. High priority will be given to the development of better tests for the diagnosis and prediction of clinical behavior in prostate cancer, pancreatic cancer, breast cancer and leukemia/lymphoma.
We intend to combine and analyze data from genomics, proteomics and digital imaging using SVM-RFE techniques to develop practical, cost-effective and reliable new assays. Using this technology, we believe we will be able to offer a whole line of advanced tests that will help physicians better manage the treatment options for cancer patients."
Obviously, we can expect that Neo would reject any assertion that it used SVM-RFE technology in the development of tests, even though the company publicly announced that it had intended to. And, for what it’s worth, the arbitration proceeding did not include any references to it. Yet, this is where HDC’s closing statement in the September 20th SEC filing comes into play. The arbitration proceeding with Neo started well before the USPTO ruled in favor of HDC for the SVM-RFE patent in late February, and since HDC could not claim exclusive rights to the technology prior to that ruling, it likely wasn’t in a position to include SVM-RFE in the arbitration with Neo, since the company didn’t know if it would ultimately prevail with the USPTO or even if its patent(s) would be invalidated (as Intel’s were). Bingo!
As we now play this forward, it stands to reason that HDC should, at some point, examine whether or not Neo did infringe by using SVM-RFE for the development of tests since the master license agreement was executed in 2012. And, although a legitimate issue of concern around this relates to how much legal proceedings would cost HDC, I would argue that getting to an answer may not be that difficult. If you review the Genomic Testing Cooperative website (this is the lab that Maher Albitar, MD formed in 2018 after leaving Neo), you will see that two other individuals left Neo and joined him that year. One was the director of the Neo molecular laboratory since 2012, and the other was responsible for Neo test development since 2012. Thus, based on their combined expertise, it would stand to reason that HDC could promptly identify from them whether or not SVM-RFE was used without compensation to HDC. And, if HDC were to confirm that Neo used the technology, it could also explain why Neo might wish to acquire HDC, given that it could potentially have much to lose with an infringement challenge.
Putting this into perspective, I do find it interesting that Neo raised a significant amount of money earlier this year. Based on its May 20, 2019 press release, it commenced an underwritten public offering of approximately $150,000,000 of newly issued shares of common stock. And, while it likely raised this money with the intent of using it for another acquisition (time will tell, particularly since its director of investor relations signaled in an earnings call that the capital is not going to be used for its new facility), something isn’t adding up. Neo raised approximately $125 million in August, 2018, and subsequently used the money (plus additional shares) to acquire Genoptix in December, 2018. The unrealistic ability to manage robust back-to-back acquisitions in such a short amount of time, not to mention the abrupt ‘retirement’ of Neo’s CFO literally days after she stated in a recent earnings call that Neo isn’t using HDC intellectual property, leads me to believe that there may be more to the story. Thus, as I mentioned previously, there may be merit to my consideration that Neo may be attempting to acquire HDC because its executives simply can’t let go of the fact that they erred in their approach, and the SVM-RFE would have been right there at their finger-tips.
In summary, inasmuch as I’ve tried to outline why each of these two considerations may have merit, I also have to acknowledge that I personally believe that HDC should, in no way shape or form, entertain it. Based on the inappropriate manner in which Neo handled its affairs with HDC, not to mention the unfathomable potential of the SVM-RFE technology, the point here is that Neo (which at one point in history had the opportunity to control HDC’s technology) can no longer afford us.
Sorry fellas. If all you can raise is $150,000,000, you will need to look elsewhere for an acquisition target.
I like to start off each weekday by dabbling in just 2000-3000 shares. It keeps me motivated and helps me to see what trading action happens.
There are a few of us who had the foresight to buy large blocks at sub-penny levels. We're all hoping that the HDC board holds off on announcing anything meaningful until after the new year. We don't want to deal with the capital gains tax for 2019.
Buying an additional 5,000,000 shares between .004 and .007 was the best thing I ever did
Good Sport,
You are quite astute. And assuming no news on Monday, what happens to the share price?
It's amazing how asleep at the switch you guys are. Yes, this is a new, refreshed website. And, as Evelyn posted on the Yahoo board, HDC has also leased new office space.
Obviously, they are serious about taking deliberate steps to move the company forward, regardless of the absurd posts from a number of you, and your insane need for a PR just for the sake of issuing one.
Feel free to actually take the time to read through it. You'll see HDC's reference to the fact they have exclusive rights to SVM-RFE, etc.
Big Beef,
are you looking at info dating back to 2013? He was appointed to the board in the Norris days. Then Kowbel tried to track him down at one point, rather unsuccessfully.
And, if you are genuinely concerned, feel free to email Neo client services and ask when and why they took the liquid biopsy prostate test off the market.
Interesting, isn't it, HDC shareholders? Shorty before arbitration?
They will tell you thy took it off the market for business reasons. Tell me if you get something different.
And, for what it's worth, I'm a very long time shareholder with a LOT of shares that isn't going to accept Neo's approach. Trust me.
Now, if anyone on this board wants more info, let me know. Happy to help
thanks.
Doesn't everyone on this board find it quite concerning that Neo didn't issue an 8-k announcing Dr. Albitar's departure? This individual was one of the most highly compensated individuals at Neo, (perhaps the 2nd most highly compensated employee?) for a period of 3-4 years. If you look at Neo 8-ks, you will see that the company issued an 8-k for his replacement in Dec, 2018. Yet, Neo never let shareholders know of Albitar's departure. Everyone smelling something rotten?
Homework time, friends
More to come, but only if you are genuinely interested
Oh, and by the way, is everyone on this board aware that Neo took the Neo liquid biopsy prostate test off the market on Nov 16? That's right, shorty before the arbitration proceeding started on Dec 3, 2018. The liquid biopsy prostate test that was presumably based on HDC intellectual property, yet Neo publicly announced that it launched without HDC property? The test that Neo thought would generate significant revenue?
Does anyone on this board follow what I am saying?
What Goes Around Comes Around!
You know what makes this USPTO decision even sweeter? If Neo hadn't decided to play foul, they had an extraordinary opportunity over the years to enhance their partnership with HDVY. And, with this in mind, it wouldn't have surprised me if Neo could have ended up acquiring HDVY for a very modest sum, or strategically developing a formal partnership whereby they had a stake in the Intel decision. And, had they done that, Neo would be enjoying some cocktails, patting themselves on the back for a job well done. Instead, they've learned a lesson that 'what goes around comes around'. This couldn't be any sweeter.
Happy New Year, everyone
I have a thought, and hope those of you who post will follow along. I think 2019 could be radically different for HDC shareholders, if we put our heads together.
First, I hope you will agree to do this: send an email to the following address: client.services@neogenomics.com. Simply ask if the NeoLAB prostate test is still be being offered and, if not, what date was it taken off the market, and why.
Let's see what client services has to say. From there, perhaps we can start effectively communicating as a group of HDC shareholders and figure out how to take action. I would think that the order of business after this will be to inquire about Albitar's departure, which for some reason didn't warrant a Neo communication to its shareholders. Yet, Neo thought it important enough to issue a statement about the appointment of a new chief scientific officer. The inquiry about this wouldn't be directed to client services, but I have some thoughts.
Hopefully we can start getting some immediate responses about the prostate test from client services this week, so that we can document it.
More to come as we stop sitting idle and start legitimately challenging issues of very serious concern.
Neo has not publicly announced his departure, but Dr. Albitar has started a new laboratory. His name and picture have now been removed from the Neo website. Here is today's press release from his new venture (I'm wondering to what degree he intends to inappropriately use HDC IP):
Genomic Testing Cooperative, a Limited Cooperative Association, Launches a New Platform for Affordable Genomic Cancer Profiling
Irvine, California-November 1, 2018 - Genomic Testing Cooperative (GTC), a Limited Cooperative Association, announced today that it will offer multiple laboratory-developed genomic profiling tests for hematologic and solid tumors using next-generation sequencing (NGS) technology. The co-op provides a first of its kind platform for cooperation between commercial, hospital-based, and academic laboratories. This co-op structure allows the member laboratories to share resources and to participate in technological innovation and determining the type of tests being developed. In addition, the co-op provides economies of scale that reduce costs of innovation in NGS. The co-op model is ideal for standardizing testing, obtaining FDA-clearance, and working with pharmaceutical companies on clinical trials.
Complete molecular profiling including comprehensive interpretation, therapeutic options, and clinical trials are offered to co-op member laboratories at a standard price of $1,500.
“This co-op platform aims to revolutionize the next-gen sequencing cancer testing approach. Cooperation is critical for clinical laboratories to keep pace with the rapid advances in NGS technology, chemistry, bio-informatics, and clinical applications.” said founder Dr. Maher Albitar, the CEO and CMO at GTC. “In the era of precision medicine, we at the Genomic Testing Cooperative, believe that every patient with cancer has the right to affordable molecular profiling of their cancer so clear treatment options can be explored.”
At this time, 8 different cancer genomic profiling tests are available.
-Liquid biopsy for hematologic neoplasms is offered covering abnormalities in 177 genes. Bone marrow biopsy, which is a very painful procedure, can potentially be avoided in more than 50% of patients if the liquid biopsy is used to profile molecular abnormalities in cell-free DNA.
-The hematology profiling covers the coding sequence of 177 genes and provides complete information on diagnosis, prognosis, and heterogeneity in hematologic neoplasms. Screening for fusion and translocation in hematologic neoplasms is also available covering fusions and expression profiles of 65 different genes. Complete DNA and RNA evaluation of hematologic neoplasms (GTC Hematology Profile PLUS) provide a comprehensive molecular evaluation of mutation, expression, and fusion/translocation of various types of hematologic neoplasms including diagnosis of Ph-like acute lymphoblastic leukemia and distinguishing between GCB and ABC diffuse large B-cell lymphoma.
-The solid tumors molecular profile evaluates mutations and fusions in the entire coding sequence of 434 genes and provides information on Tumor Mutation Burden (TMB) and Microsatellite Instability (MSI). A test for various fusions detected in solid tumors is also offered covering translocations involving 55 genes, including ALK, ROS1, RET, NTRK1, NTRK2, NTRK3 and sarcoma translocations.
Generated molecular data is curated and checked for accuracy with the aid of proprietary software based on multiple algorithms and deep learning/machine learning approaches.
About Genomic Testing Cooperative, LCA
Genomic Testing Cooperative (GTC) is a privately-owned molecular testing company located in Irvine, CA. The company operates based on a cooperative (co-op) business model. Members of the co-op hold type A shares with voting rights. The company offers its patron members a full suite of comprehensive genomic profiling based mainly on next-generation sequencing. Molecular alterations are identified based on rigorous testing with the aid of specially developed algorithms to increase accuracy and efficiency. The clinical relevance of the detected alterations is pulled from numerous databases using an internally developed software. Relevance of findings to diagnosis, prognosis, selecting therapy, and predicting outcome are reported to members. The co-op model allows GTC to make the testing and information platform available to members at a lower cost because of a lower overhead. GTC depends on the co-op members for marketing, sales, and billing. For more information, please visit https://genomictestingcooperative.com/.
Not that easy to file class action, but if anyone is really interested in looking at the facts, I will be happy to share what I was able to identify. And, it was identified because I paid attention to the Neo filings and press releases over a period of time.
With that said, King Oil, in order to provide you with clarity, it would necessitate multiple posts, since there is a lot of info here. Allow me to point you to a starting point, and from there we can post multiple, multiple info to show how it played out.
Starting point 1:
Did you read the Jan, 2017 SEC filing by HDC that included HDC's letter of complaint to Neo?