LadRx Corp (LADXD)

[horsebfree]

As a former 15% owner of CytRx and as one of the two largest CytRx shareholders over most of the past five years, I ask you to please vote AGAINST the proposed Reverse Split.

Management and the board are presenting this as a last ditch effort to avoid delisting of CytRx from the NASDAQ exchange. But this proposal is a Trojan horse, which also gives Kriegsman enough shares to sell to drag the share price down to 11.5 cents from the current 52 cents. This is just based on the math that a 1:6 reverse split will reduce outstanding shares to 27,638,000, out of 125 million authorized as indicated in the proposal. Selling off the 97,362,000 unissued shares will drop the share price to 22.1% of the current price. This, of course, does not take crowd psychology and depletion of cash through excessive compensation packages into account. Both of these factors would be expected to have additional negative effects on share values.
You may all recall that the whole delisting threat was caused in the first place by Kriegsman’s three most recent reckless dilutions, which increased issued shares from 68 million to 233 million (including options and warrants). Each share offering was preceded by a statement by Kriegsman to the effect that “the Company has sufficient funding for the foreseeable future.” Shortly thereafter, offerings were made at a steep discount to the market price, which was like Kriegsman saying “I know you all think CytRx shares are worth X, but I say they are worth 20%, 30% or maybe almost 50% less than that.” Then he sold the shares at such discounts, and the institutions which bought them quickly sold many of these same shares at a profit. This scene has been replayed multiple times, but our CEO has apparently never realized (despite being told) that this means that the Company could have sold the same shares on the open market, and retained those profits, instead of handing them to favored institutional buyers.

We can’t risk giving bad management more shares to squander. Delisting is not the best situation, but not the worst, either. And there is an advantage. As StrongBio pointed out, companies listed on the Pink Sheets are protected from short sellers. Since CytRx is one of the most heavily shorted stocks on both major exchanges, we may see a benefit once shorting is a thing of the past, with the share price reflecting the opinions of shareholders, rather than of stock manipulators.

If and when my recently filed derivative lawsuit against management and the board is successful, CytRx will likely have more competent people at the helm. This will tend to drive the share price upward as shareholders become more confident that their interests will be respected, that rules and regulations will be rigorously observed and that valuable assets such as Aldoxorubicin will no longer be bargained away for pennies on the dollar. Under new management, a reverse split can be safely reconsidered.

Thank you for voting NO! Please spread the word.

Sincerely,

Dr. Scott Patterson

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