MRAG fires back:
NEW YORK, March 25, 2020 (GLOBE NEWSWIRE) -- Medical Resource Acquisition Group, LLC (MRAG), an investment company focused on facilitating the advancement of innovative healthcare companies, intends to ensure Rockwell Medical, Inc. (RMTI; NASDAQ) shareholders will not have their voting rights suppressed by the Rockwell Board of Directors, and intends to use all means available, including litigation, to protect the Rockwell shareholder’s right to vote for new, independent directors and improved, transparent Board governance.
On March 4, 2020, prior to a phone conference with Rockwell’s Chairman of the Board, John McLaughlin, MRAG submitted the necessary documents for their three new directors to be nominated for election at Rockwell’s next annual meeting, and after receiving confirmation from Rockwell prior to the March 8, 2020 deadline of receipt of the nomination materials, the Company waited until after the nomination deadline to note its technical objections to MRAG’s nominations and has since publicly stated that they intend not to recognize the MRAG submission. MRAG feels strongly that the current Rockwell Board of Directors (consisting of John McLaughlin, Stuart Paul, Russell Ellison, Lisa Colleran, John Cooper and Mark Ravich) are attempting to entrench and enrich themselves by trying to prevent and “suppress” RMTI shareholders' right to consider MRAG’s slate of new, independent directors at the Company’s next annual shareholder meeting.
On February 24, 2020, MRAG offered Rockwell and the Board of Directors $15 million for equity priced at the market on the condition that new MRAG-nominated directors be appointed to the Rockwell Board to replace Ben Wolin, Lisa Colleran, John Cooper and Mark Ravich . In view of Mr. Wolin’s subsequent resignation, MRAG still intends to proceed with its nominations of three new, independent directors to replace directors Colleran, Cooper and Ravich as MRAG feels the remaining directors have neglected to exercise a sound, fiscally prudent, successful strategy for Rockwell Medical and its shareholders while the RMTI share price has lost as much as 84% of its value and plunged to an all-time low recently trading at $1.12 per share
MRAG notes that the Rockwell has the worst Governance Quality Score, ranked by Institutional Shareholder Services (ISS). ISS, according to their website, empowers investors and companies and is today the world’s leading provider of corporate governance and responsible investment solutions. As of December 31, 2019, Rockwell Medical’s Governance Quality Score is 10 on a 1 – 10 rating scale. A decile score of 1 indicates lower governance risk, while a 10 indicates highest governance risk. Rockwell’s ISS pillar score for Audit is 10 and for Compensation is 10.
MRAG thinks the debt financing that was approved by the Rockwell directors is not in the best interest of Rockwell shareholders. MRAG believes Rockwell has not been transparent with shareholders regarding the details of the Company’s recent debt financing and amendments to its agreement with Baxter Healthcare by waiting to disclose the details in a future 10-Q, rather than in the 8-K reporting the financing and the amendment. The details missing from the 8-K that Rockwell filed on March 20, 2020, include covenants which are based on Triferic sales targets and the costs of amending the Baxter Agreement.
MRAG questions the business judgement of the Rockwell management and directors. MRAG feels that the decisions the Rockwell Board has made during the last several months have been unwise, have not benefited shareholders and have been driven by not putting their shareholders‘ interest first.
MRAG believes that if the directors interests were aligned with their shareholders interest they would have accepted $15 million in equity priced at the market and refreshed the Board with three new, independent directors, and they would not have consummated the recent debt financing,
completed four additional financings over 14 months including an ATM vehicle still in place,
given up on securing Triferic TDAPA reimbursement efforts as they have stated on their earnings call,
tried to launch Triferic commercially in the Medicare bundled payment,
hired a large sales force to try and sell Triferic in the Medicare bundled payment,
chosen not to commercially launch the FDA approved drug Calcitriol,
compensated themselves with salaries, bonuses and stock options for their lack of performance.
Mr. Khurram Shroff, General Partner of MRAG, stated “In my view, Rockwell’s debt financing is further evidence of the Board’s bad decision making and coupled with their disingenuous attempt to prevent shareholders the opportunity to vote for our three new directors at the annual meeting it clearly shows how badly they are trying to entrench and enrich themselves at the expense of their shareholders. We are focused on stopping the excessive spending on compensation for poor performance and results, improving governance, and bringing much-needed transparency to RMTI shareholders. Shareholders need a Board that puts a premium on practicing good governance, sound decisions, transparency, truth and prudent management of the Company funds. For the sake of all shareholders, we intend to use all options available to us, including litigation, in order to ensure that our slate of directors is considered by the shareholders at the upcoming annual shareholder meeting.”
MRAG is wholly-owned by Canadian, UAE-based businessman Khurram Shroff, who is an award- winning, global banking and finance leader. MRAG focuses on disruptive technologies in the healthcare space and is assisted by expert advisers from three continents who have global financial and strategic networks. Mr. Shroff is focused on investments in companies with innovative technologies that can bring advancement in treatment to patients worldwide. Mr. Shroff is driving an initiative to introduce vital, state-of-the-art, dialysis products and solutions globally. Mr. Shroff views his investment in Rockwell Medical as facilitating this initiative.
No Current Solicitation – 2020 Annual Meeting Not Yet Scheduled
Although we are not currently soliciting stockholders in respect of the 2020 Annual Meeting of Rockwell Medical, Inc.(“Rockwell”), this communication may nevertheless be deemed to be solicitation materials under applicable SEC regulations. Once Rockwell sets the relevant record and meeting dates, MRAG may determine to file relevant materials with the SEC, including a proxy statement on Schedule 14A. STOCKHOLDERS OF ROCKWELL ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING MRAG’S PROXY STATEMENT IF WE DECIDE TO SOLICIT IN OPPOSITION TO MANAGEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain the documents free of charge at the SEC’s web site. Such documents are not currently available.
Potential Participants in Solicitation
If we determine to solicit stockholders in respect of the 2020 Annual Meeting of Rockwell, MRAG, its members and controlling parties may be deemed to be participants in the solicitation of proxies and information about such parties will be included in any proxy statement we file regarding the 2020 Annual Meeting once Rockwell sets the relevant record and meeting dates.
Forward Looking Statements
Certain information set forth in this presentation contains “forward-looking information”, including “future oriented financial information” and “financial outlook”, under applicable securities laws (collectively referred to herein as forward looking statements). These forward-looking statements are based on current expectations, estimates, forecasts and projections. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond MRAG’s control.
These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause events to differ materially from any expectations or projections of future performance or result expressed or implied by such forward looking statements. These risks include, among other things: (i) market perception regarding MRAG and the viability of the proposed transactions; (ii) the availability of financing for the proposed transaction with Rockwell Medical; and (iii) the recent outbreak of the novel coronavirus and the global impact it may have on financial markets and the life sciences sector.
Although forward-looking statements contained in this presentation are based upon what management of MRAG believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. MRAG undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
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