My sources are not exclusively DP, in fact, I've tried to avoid using him as a source for most of my information because if I did there would be certain problems we'd both be facing. How do I reconcile my statement? I didn't address everything in the press release, but things like the production levels (as Xechem states them), the nutraceutical status (new production facility and tablet development) and the SEC letter are things he knew nothing about. It's probably not exactly half of the PR, I apologize for my over estimation... So, with that said, I'll tell you the following:
1. As I said, I'll give Xechem's Press Release the benefit of the doubt on this on. But there have been discussions with someone and from those conversations it sounded like not much was going on there (I can't say who). Since I haven't been there, nor have I talked directly with this individual, I can't say for sure, but I'm not convinced of this development. I can say with much confidence though, based on conversations with a few pharmaceutical sales reps, a hemotologist, three nurses, three other doctors and a few other business people, that bringing NICOSAN/HEMOXIN into the US or the EU as a nutraceutical will kill the product. It will also destroy the efforts put out to get Orphan Drug status and will likely not bring $1 million in sales in a 12 month period, but will take 24 months to get to that point. The product will likely not qualify for insurance (but this is my opinion, based on these other conversations, but by no means definitive) and will only be worth something in the $39-49/month range, while the pharmaceutical could bring $99-$129 or more a month, especially with clinical proof that it does the job. Just a bunch of opinions though...
2. Same person in #1
3. A month or so ago I did a comparison and posted it here as to current costs and past costs. Post 177214:
So they are paying $100,000 for the 2,550 sq ft space in Edison and $70,000 for lab space. $250,000 for 25,000 sq ft or $170,000 for 2,550 sq ft and two labs (add 500 sq ft), it is a cost savings, I'll give them that much.
This is based on the lease agreement Xechem signed for the office space in Edison and filed with the SEC, I'm not sure where I got the $70,000 (probably DP, but I don't know) and the $250,000 for Jersey Ave was from annual reports.
4. I asked the company that did the work and was told that they didn't share the new production method because they hadn't been paid. Another poster reported the same thing earlier this week.
5. Three weeks ago a group of employees of Xechem Nigeria wrote a couple of emails outlining a series of problems in Nigeria. I was given the email address and so I wrote to them and asked them if I, as a shareholder of Xechem International, could get the emails sent to me and to ask them some questions (this way I have the information first hand and not from DP and have the contact for future questions). I told them who I was and that I was working with Dr. Pandey (at first I approached them anonymously, but decided that I would tell them who I was). On Monday of this week I was surprised with a series of emails from them responding to a few questions I had. These emails had brought out a variety of issues within Xechem Nigeria, including the fact the there are 15 shipping containers sitting in customs. This fact was not known to Dr. Pandey and after making a series of phone calls he was able to confirm the validity of these claims. Over the course of this past week I've asked this individual a series of questions about a variety of things, some of which are related to production (and other things). Of course, without the equipment sitting in customs they obviously have no new equipment and are using the equipment from when DP and the Colonel were there (some was given to Xechem by Glopharma).
6. Same source as 5
Now, on to the next points:
lmf, if you believe it is good, acceptable, and ethical business practice to establish a subsidiary in a foreign country (where he has family) and to purchase, staff, divert equipment from Nigeria AND keep this operation "off the books" then pls say so now.
Do I believe it's ethical to establish a subsidiary in a foreign country, especially when you do it before you become a public company. Xechem International was founded in 1990 as a private company, Xechem India was incorporated in 1993 by the Pandey brothers, Xechem International was incorporated in 1994, in 1996 Dr. Pandey pledged 2/3s of Xechem India to Xechem International. Did he go through the process of transferring that stock? No, because, and I can't quite figure out the exact date, but I believe it was in the early 2000s, it wasn't legal in India for over a 50% foreign owned company. That being the case they didn't transfer the stock, but the intent was in every filing. Yes, the mistake made was not going through the motions of transferring that stock, but with all the times he stated he was in filings it was never his plan to not do it. They accounted for it in both sets of books, audited by an external auditor and signed off. There was never an IRS issue or we'd have heard about it. Now, what was that subsidiary for? From the Annual Reports:
We currently receive our supplies of plant extracts from India through informal collaborative relationships. Dr. Pandey and his brothers had incorporated a corporation in India ("Xechem India"), which was established to formalize such relationships by obtaining contracts for dependable supplies of plants and other raw materials. Based on its discussions with Indian sources for such materials, Xechem believed that an Indian corporation would obtain such contracts on significantly better terms than would a United States-based corporation. Xechem India may also conduct certain research, manufacturing, and marketing activities in India.
That explains the formation of Xechem India (and Xechem China and Xechem UK).
As for diverting equipment, again, I'll ask anyone to show me proof of equipment being diverted to India (since all that was purchased is sitting in the Lagos Customs dock). There is one piece of equipment in India, a spray dryer, that was built in India, not shipped to India. It was moved to a warehouse in northern India at a University that DP set up a collaborative effort with that is next to a source of raw materials. Does that mean he was setting up a factory? No, he sent it there because it was rent-free. When the new facility was ready, they were going to send the new spray dryer to Nigeria. Did it happen? No, because DP was fired before the new facility was ready. So, where's the spray dryer? Sitting in that same warehouse at that same University in a shipping container.
Off the books? I've seen over seven inches of documentation that has copies of canceled checks, ledger pages, invoices, receipts, etc. all from Xechem India. These items were provided to Xechem International's attorney, who had the items copied for discovery. It's a lot of material, and in no way is it off the books...
As for settling, I'm not sure what's to settle. Just like Dr. Swift has said to others that have promissory notes with the company, those that have lawsuits with the company, including Dr. Pandey, will not be paid. Not interest payments, not anything. But, he's offered to buy the loans back for pennies on the dollar in at least one case. (my source? The person that the loan is with, I speak to her at least once a week, often times more than that). Dr. Pandey, John Schingo, Dr. Misra, Colonel Pandey and a few others want the money they loaned the company back (just like the shareholders want their stock to climb back up, at least the S/H have a fighting chance, these people don't). Everyone knows that they aren't getting anything right now, but to say that there's a pissing match going on, that's far from the truth. Dr. Swift is running Xechem as he wants to.
I'll say it again, if you think you can find someone that will step in to this situation and take over at the 11th hour and can figure out how to move things forward, send him to the board. Obviously Xechem doesn't have time for an extended candidate search, nor interviews or getting up to speed. The proposal on the table is to give Dr. Pandey the reins back, let him pull this thing around with the help of some people willing to go to Nigeria and do what's necessary (yes, I'm one of them, anyone else willing?). In the process of doing that there will be individuals that will be considered for the role to take over. When a suitable CEO is found, that person will jump in and be groomed to take over as quickly as possible by on-the-job training, when they are ready, Dr. Pandey steps into the role you think he's suited for VP of R&D or CSO or whatever. The problem Dr. Swift had was that he took over, he grabbed everything from the Jersey Ave. office (put the files in storage and packed up the lab and shipped it to Nigeria, those 6 containers might get released from customs soon) and tried to run the company with nothing. He fortunately had Ben, Barbara and Leonard, but they are all in New Jersey, he's in Colorado. That can't happen again.
Dr. Pandey comes with people, a plan and funds to carry it out. We are no longer being passive either as we feel that he can reverse the current direction of the company and wants that opportunity to prove it.
We appreciate your offer to moderate, we stand ready to get this job done if you can help us get in there to get started. Enough company silence, enough finger pointing instead of moving forward, enough uncertainty, it's time for action.
