A shareholders to the BOD at shareholders meeting on 12/11/16.
Good Morning,
My name is ________. I have flown up from Florida to attend this annual meeting for one reason only: to introduce you to the use of a warrant dividend to ALL holders of common stock in order to force a cabal that is in total control of your stock price, and has been since the summer of 2014, to cover, which means buy back, their 1.9 million share short position.
Before I begin, let me give you a brief summation of who I am. If Gene is still correct, I may be the largest single individual shareholder of your company, outside of management and Dr. Boniuk, owning a shade under 3/4 million shares, which I bought in early 2014 after spending well over 100 hours studying the technology that Anil has invented. In 53 years of successful investing, using the phrase ---- "put all your eggs in one basket, and then watch it closely" ---- I have consistently done just that. I only own NNVC, and focus obsessively on how I can assist the company. As such, I am responsible for others having bought well over 2 million shares, including your second largest admitted institutional holder, the Wharton Business Group.
My modus operandi also involves getting to know senior management on a first name basis, in this case Dr. Seymour, whom I refer to as Gene.
When I first realized in 2014 that a group of hedge funds were in "control" of the stock price ---- they short every buy side order ---- I called this fact to Gene's attention. He shrugged and said there was nothing he could do about it. That started me thinking. My career was that of a retail stockbroker, working with clients in 40 states from my base in ______. After 17 years of work (I retired in 1986) I became very familiar with the warrant as a stand-alone security, since they were commonly used to raise capital in the 70's and 80's.
Needless to say, there were no hedge funds or high-frequency-traders in those days, so the use of the warrant was never thought of as a weapon to use by management to rid themselves of short sellers.
Let me now discuss what a warrant is and how its terms are the perfect solution to that problem. A warrant is simply a long-dated option, pure and simple. If it expires in one year or less, it is called an option; if any timeframe beyond that, a warrant. The terms applied to the warrant being created are the key, and here's where its use can have multiple benefits.
Let's now understand who a "short" is. He is some individual or entity that has borrowed shares from an existing owner and sold them, hoping to repurchase them at a lower price. Generally the target company is in trouble in one way or another and its stock price will decline as a consequence. But in the case of NNVC, that is certainly not the case, as the recent CEO letter graphically illustrates. So what gives? Why are 1.9 million shares short? Simply because NNVC sadly fits a computer model that says the unlimited funds of the hedge fund, coupled with a thin "float" and dominated by naive individual investors, the short can manipulate the stock price lower irrespective of any negative, and hope enough investors sell to cover their borrowings.
Using the warrant terms, management has the means of correcting this injustice. The key to valuing a warrant is TIME, not PRICE. For example, let's set the price of our new warrant at $6.05, which was that used to price underwriter's warrants in the January 2014 secondary that raised $20 million gross proceeds at $5.25. Furthermore, let's give the time the warrant will have before maturity at 5 years, and add two key restrictions: 1. that it be non-callable for the 5-year term, and 2. that it be non-transferable for the first 3 years. Remember what it means to be short? They have borrowed shares and sold them. When the warrant is declared to existing shareholders, they (the shorts) are NOT ENTITLED TO RECEIVE THEM. During the period between the announcement and the x-date they must quickly repurchase the short shares, or have the additional nightmare of having to return to the lender not only the common shares they borrowed, but also the warrants, which they cannot purchase at any price for 3 years, IF not covered before the x-date.
Another variant of this concept is to make an announcement in a formal PR that you intend to give this dividend at some indefinite time within the next 6 months, but will allow management to choose the timing. Immediately your existing shareholders would literally stop any thoughts of selling because of the uniqueness of obtaining this warrant, and instead may buy more shares. The shorts, on the other hand, would have an OMG moment and know they must cover ASAP or be in a "world of hurt".
Assuming a ratio of 1 warrant being issued for every 10 common shares, the secondary reason to dividend the warrant is to provide for the potential of $36 million dollars to the company at the end of the 5 year term. It is also very cost efficient: NO INVESTMENT BANKING FEES, NO COMMISSIONS WHEN EXERCISED, AND NO CONSULTING FEES TO ME.
In closing, think of the many small companies that will sit up and take notice of this technique, being pounded themselves by similar short sellers. In 1919. the Green Shoe Co. was the FIRST to initiate an over-allotment option when making their IPO (Initial Public Offering). almost 100 years later, the same right is known as a "Green Shoe", and everyone on Wall Street instantly knows its meaning. When you initiate this method of ridding your company of short sellers, it will forevermore be called employing a NanoViricides.
MAKE IT HAPPEN!
Thank you for listening!
The company LGL Group, Inc used warrant dividend in 2013------ lglgroup.com
AI
