13D Weekly Report - Dec 4, 2023 to Dec 8, 2023
Table of contents
Kanen Wealth Management / Philotimo Fund Urges eGain Corporation to explore a sale
Moshe Arkin Urges Eiger BioPharmaceuticals to Maximize Value with Lonafarnib Focus
Paragon Technologies seeks shareholder support at Ocean Power Technologies
Sarissa Capital Management Expresses Confidence in Amarin's Value and Long-Term Commitment
Bradley L. Radoff nominated Board candidates to EMCORE Corp
Murchinson Initiates Shareholder Protection Measures in Letter to Board
INITIATED
180 Degree Capital Corp Commends Synchronoss Technologies for Non-Core Asset Sale and Board Appointment
Market Cap: $48 million | Synchronoss Technologies, Inc. provides cloud, messaging, digital, and network management solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
On December 4, 2023, 180 Degree Capital Corp (8%) commended the company for selling non-core assets and appointing Kevin M. Rendino to the Board. Source
ONGOING
Kanen Wealth Management / Philotimo Fund Urges eGain Corporation to explore a sale
Market Cap: $251 million | eGain Corporation develops, licenses, implements, and supports customer service infrastructure software solutions in North America, Europe, the Middle East, Africa, and the Asia Pacific.
Background
On April 24, 2023, Kanen Wealth Management / Philotimo Fund (6.4%) stated its belief that the company’s current Share price does not reflect the underlying intrinsic value of its business. In the last ten days, Philotimo Fund have had introductory, general discussions with certain third parties who could be interested in, or logical for, a transaction involving the company or the company’s assets. Source
Update
On April 24, 2023, Kanen Wealth Management / Philotimo Fund (7.6%) urged the board to hire an investment banker and establish a special committee to pursue the sale of the company. It criticized Mr. Roy's management style, including micromanagement, inflexibility on pricing, and poor responsiveness. In conclusion, it requested the board to act in the shareholders' best interest by initiating a legitimate process to sell the company, independent of Mr. Roy's involvement. Source
Moshe Arkin Urges Eiger BioPharmaceuticals to Maximize Value with Lonafarnib Focus
Market Cap: $14 million | Eiger BioPharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on the development and commercialization of targeted therapies for rare and ultra-rare diseases in the United States and internationally.
Background
On November 14, 2023, Moshe Arkin (10%) urged the Board to focus on Lonafarnib's potential as a treatment for Hepatitis Delta Virus (HDV). He proposed filing a new drug application for Lonafarnib, financing it through a private offering with major shareholders, and placing investor representatives on the Board to enhance the stock price. Moshe Arkin aimed to collaborate with management and the Board to maximize shareholder value. Source
Update
On December 4, 2023, Moshe Arkin reiterated his concerns
Paragon Technologies seeks shareholder support at Ocean Power Technologies
Market Cap: $21 million | Ocean Power Technologies, Inc. develops and commercializes proprietary systems that generate electricity by harnessing the renewable energy of ocean waves in North America, South America, Europe, and Asia..
Background
· On July 7, 2023, Paragon Technologies (3.9%) provided a letter to the stockholders with respect to its views regarding the Company’s financial condition and the performance of the board. It expressed its concerns about the company's ongoing cash burn and lack of a coherent plan for profitability. It highlighted the company's history of net losses since its inception in 1994, declining share price, failed commercialization efforts, and high operating expenses. Paragon intends to provide a slate of director nominees with the aim of reducing losses, addressing the cash burn, and implementing a go-to-market strategy to create profitable operations at the company.
· On July 14, 2023, Paragon Technologies (4%) expressed its concerns about alleged wrongdoing and mismanagement by the board and management. It has requested access to the company's records and will pursue litigation if the board does not comply. Furthermore, it stated that it may make binding or non-binding stockholder proposals or may nominate one or more individuals as nominees for election to the board. Source
· On July 17, 2023, Paragon sent an Inspection Demand to the company, requesting access to the company's books and records for the purpose of investigating apparent wrongdoing and/or mismanagement by the Board and/or management. Source
· On July 27, 2023, Paragon filed a complaint in the Delaware Court of Chancery to enforce for inspecting Company's books and records.
· On August 2, 2023, Paragon Technologies, Inc. issued a press release regarding the company, demanding clear explanations from the board on how the company will fund operations beyond July 31, 2024.
· On August 11, 2023, Paragon Technologies (4%) calls on the company to REFRAIN from ALL future equity share sales that will dilute shareholders and immediately announce a significant cost cutting plan to demonstrate the Board’s commitment to protecting shareholder value. Source
· On August 25, 2023, Paragon demands corporate governance adherence and shareholder value enhancement, urging to:
o Reinstate the Company’s bylaws to their original form prior to Paragon’s calling out the Company’s worsening financial performance
o Terminate the Company’s poison pill and grant Paragon its limited waiver
o Allow Paragon, as is Paragon’s right as a shareholder, to examine the Company’s books and records
o Reconstitute its Board to appoint Paragon’s directors to the Company’s Board.
· On August 25, 2023, Paragon Technologies notified its intent to nominate five directors for the company's board at the 2023 annual meeting. On August 29, 2023, Paragon Technologies submitted a second request for an exemption related to the "Section 382 Tax Benefits Preservation Plan" adopted by the company's board on June 29, 2023, limiting ownership to 19.9% of the company's outstanding shares. The company's board has not responded to these exemption requests. Source
· On October 9, 2023, Paragon Technologies stated that it has initiated legal action against the board and CEO for alleged breach of fiduciary duties. They sought to appoint three directors to the board and requested an exemption from poison pill provision. Paragon criticized the management for self-serving actions and misleading statements. Source
· On October 20, 2023, the Delaware Court of Chancery ruled in favor of Paragon Technologies (OTC PINK:PGNT), ordering Ocean Power Technologies (OPT) to provide Paragon with certain books and records for an investigation. Paragon had made a books and records demand on July 17, 2023, which OPT initially refused, leading to litigation. During the trial, Paragon raised concerns about OPT's financial losses, expenses, and director/officer compensation, as well as actions by OPT's board seemingly aimed at interfering with Paragon's efforts to elect new directors. The Court found that Paragon had a credible basis to suspect wrongdoing and rejected OPT's claim of an improper motive for the demand. Sham Gad, Chairman of Paragon, expressed satisfaction with the decision and urged OPT to work constructively with shareholders. Source
· On October 24, 2023, Paragon Technologies sent a letter to the independent directors of the company, raising concerns about recent decisions made by the board. The letter questioned whether the actions taken by the directors are in the best interest of shareholders and suggests that these actions may be aimed at preventing certain director candidates from being presented to shareholders. Paragon highlights several actions, including the adoption of new by-laws, the implementation of a poison pill, engagement of multiple law firms and a proxy defence firm, and the refusal to provide access to company records. Paragon calls for transparency and questions the board's spending decisions in light of OPT's financial situation.
· On November 13, 2023, Paragon Technologies notified the Company that Robert J. Tannor notified them of his withdrawal as a nominee, due to health reasons that he is still recovering from, for election to the Company’s board of directors at the Company’s 2023 AGM. Paragon Technologies intends to proceed to nominate the four other candidates previously notified to the Company. Source
· On November 17, 2023, a Delaware Chancery Court ruling and evidence suggest a gap between OPT's public statements and financial reality. Paragon calls on OPT to implement a substantial cost-cutting plan and cease issuing equity to safeguard shareholder interests. Source
· On November 28, 2023, Paragon Technologies filed proxy materials seeking support for its nominees.
· On November 30, 2023, the Delaware Court of Chancery denied Paragon's request for injunctive relief filed on October 9, 2023. As a result, Paragon's nominations and exemption request remain rejected, and they cannot nominate their candidates for the OPT Board at the 2023 Annual Meeting. Source
Update
· On December 4, 2023, Paragon Technologies stated that it intends to move forward with its election contest at the Company’s 2023 annual meeting of shareholders (scheduled by the Company to be held on January 31, 2024) and intends to nominate its four director candidates at the annual meeting. Source
· On December 7, 2023, Paragon Technologies reiterated its concerns and urges shareholders to vote for its nominees. Source
Sarissa Capital Management Expresses Confidence in Amarin's Value and Long-Term Commitment
Market Cap: $295 million | Amarin Corporation plc, a pharmaceutical company, engages in the development and commercialization of therapeutics for the treatment of cardiovascular diseases in the United States.
Background
· On January 24, 2022, Sarissa Capital Management (6.06%) stated that it intends to engage in discussions with the company and others regarding its investment in the shares and ways to maximize the value of the company’s assets. Source
· On June 3, 2022, Sarissa Capital Management expressed its disappointment with the company's first quarter results. Sarissa Capital believes that the meaningful decrease in share price following the earnings announcement reflects the company’s insufficient adjustment to changing market conditions for its key drug Vascepa and investor concerns about the ability of leadership as currently constituted to navigate the company during this critical time. Sarissa Capital believes that the expertise and experience of its principals would be extremely beneficial to the company and intend to seek representation on the board. Source
· On June 15, 2022, Sarissa Capital announced that it intends to vote “ABSTAIN” at the upcoming AGM. It stated that "Even though such a vote will not impact the outcome of the upcoming election of directors, the United Kingdom, the jurisdiction in which Amarin is domiciled, contains laws and rights that protect the shareholder franchise even after the annual meeting. For example, under UK law and Amarin’s articles, shareholders, like Sarissa, who own at least 5% of the outstanding shares can call a special meeting of shareholders to remove and replace directors AT ANY TIME. Therefore, immediately after the annual meeting, we could call a special meeting and seek to remove and replace some or all of the Amarin directors with the affirmative vote of the holders of a majority of the outstanding shares."
· On October 11, 2022, Sarissa Capital issued a press release indicating that it has commenced the process to call a special meeting of shareholders to remove and replace certain of the company’s directors.
· On January 10, 2023, Sarissa Capital filed proxy materials submitting notice to call a special meeting of shareholders to add directors and remove Chairman Per Wold-Olsen. Source
· On January 18, 2023, Sarissa Capital filed proxy materials reiterating for Board refreshment. Source
· On January 31, 2023, Sarissa Capital filed proxy materials reiterating for Board refreshment.
· On February 1, 2023, Sarissa Capital filed proxy materials urging shareholders to vote for its nominees.
· On February 2, 2023, Sarissa Capital issued a presentation reiterating its concerns and urged shareholders to vote for its nominees.
· On February 3, 2023, Sarissa Capital launches website www.freeamarin.com for shareholders and urges them to vote for its nominees.
· On February 7, 2023, Sarissa Capital released a presentation highlighting many of the inaccurate and misleading statements Amarin made in its attempts to thwart shareholder representation and oversight on the board.
· On February 17, 2023, Sarissa Capital issued a presentation detailing the dire need for change at the company.
· On February 21, 2023, Sarissa Capital filed proxy materials urging shareholders to vote for its nominees.
· On February 27, 2023, Sarissa Capital issued a press release that condemned the Board for frontrunning results of proxy contest with egregious equity grants to executives. Sarissa believes Amarin board acted in bad faith by making these equity grants while refusing to disclose proxy contest results and will hold each director personally accountable. Sarissa urges Amarin CEO Karim Mikhail to repudiate his undeserved equity grants and re-issue them to hard working Amarin employees
· On February 28, 2023, Sarissa Capital Management LP today issued the following statement regarding the company. "Amarin shareholders have sent a loud and clear message repudiating the incumbent Amarin board. Sarissa thanks fellow shareholders for their support in a resounding victory against the Amarin board. Our estimate is that up to nearly 80% of shareholder votes were in support of Sarissa. As Amarin’s largest shareholder, we are grateful for the opportunity to remake Amarin for the benefit of all shareholders." Source
Update
On December 5, 2023, Sarissa Capital Management stated its belief that the stock is undervalued and remains a long-term shareholder. Further it stated it was pleased with the progress that Amarin has made to date and expect the value to be reflected in the stock price over time. In addition, Sarissa stated that the company has made significant progress in,
Reorganizing the leadership team under new CEO Patrick Holt with his international leadership and turnaround operating experience
Streamlining the U.S. business to maximize cash flows
Reworking Europe’s commercial infrastructure and pricing and reimbursement activities to be more effective and cost-efficient in key markets
Achieving national reimbursement approvals and launches of Vazkepa in Europe, including in Spain, Netherlands, and Scotland, as well as in China through EddingPharm
Securing multiple international partnership deals, including in Australia/New Zealand, South Korea and Southeast Asia, to grow Vazkepa globally. Source
Bradley L. Radoff nominated Board candidates to EMCORE Corp
Market Cap: $34 million| EMCORE Corporation is engaged in designing and manufacturing indium phosphide (InP) optical chips, components, subsystems and systems for the broadband and specialty fiber optics market.
Background
On August 24, 2023, Bradley L. Radoff (8%) stated that he is concerned about the Company's share increase, price decline, and shareholder dissatisfaction. He urges a quick Board refresh with skilled directors, emphasizes shareholder input, and aims to unlock Company value through collaboration with the Board. Source
Update
On December 5, 2023, Bradley L. Radoff delivered a letter to the company nominating three candidates for election to the Board at the 2024 annual meeting of shareholders
Past
· On April 11, 2022, Cannell Capital disclosed a 9.98% active stake in the company and sent a letter to the Chairman of the Board requesting that the company replace two members of the Board immediately.
· On August 3, 2022, Cannell Capital delivered a letter to the Board expressing its concerns that (i) EMKR's weak CEO is unable to retain or attract good people, (ii) EMKR's adrift management has missed "street" earnings estimates three out of the last six quarters,(iii) EMKR's disengaged BOD has little to no capital allocation experience and scant skin in the game. CC defines "skin" as that which you buy, not that which you are given; and (iv) EMKR faces a structural conflict wherein numerous external parties are allegedly interested in enjoying control, or significant ownership, in EMKR but the flaccid and self-serving BOD repels them.
Murchinson Initiates Shareholder Protection Measures in Letter to Board
Market Cap: $607 million | Nano Dimension Ltd., together with its subsidiaries, provides additive electronics in Israel and internationally.
Background
· On January 22, 2023, Murchinson Ltd and certain funds (5.1%) delivered a letter to the Board demanding that the company convene a special general meeting of shareholders to allow shareholders to vote upon resolutions proposed by the Proposing Shareholders to improve the company’s corporate governance by way of (i) amending certain provisions of the Company's Amended and Restated Articles of Association, including to allow shareholders to fill Board vacancies and remove directors at a general meeting by a simple majority vote, (ii) removing several members of the Board, namely, the Chairman of the Board and CEO Yoav Stern, and current directors Oded Gera, Igal Rotem and Dr. Yoav Nissan-Cohen and (iii) appointing two new highly-qualified, independent and experienced director nominees, Kenneth H. Traub and Dr. Joshua Rosensweig, as directors of the company(such demand, the “Special Meeting Demand”). The Special Meeting Demand instructed the Board to immediately, and no later than February 12, 2023, call the Special Meeting, and hold it no later than 35 days thereafter, as required by the Companies Law. Source
· On February 13, 2023, Murchinson Ltd (5.1%) called on the company to hold a special meeting to remove four incumbent directors, including its chairman/CEO, and install two independent board members. Source
· On March 6, 2023, Murchinson Ltd issued a presentation outlining why it believes change is urgently needed at Nano Dimension.
· On March 6, 2023, Nano Dimension Ltd (14.5%) stated that it intends to engage in communications with the company regarding opportunities to enhance shareholder value and improve corporate governance, including through potential changes in the corporate structure, potentially, among other options, including changes to the composition of the Board. Source
· On March 9, 2023, Nano Dimension Ltd delivered a letter to the board proposing a non-binding indicative offer to acquire the remaining outstanding shares for $18.00 per share in cash.
· On March 10, 2023, Anson Funds (5.1%) issued a letter to the Board to express its disappointment in the company’s apparent refusal to constructively engage with its shareholders. In addition, Anson Funds called on the board to implement a meaningfully larger return of capital program and expressed its concern that the company is overcapitalized and its belief that management’s recent actions highlight poor corporate governance at the company. It also urged the board to halt the proposed takeover of Stratasys, Ltd. Source
· At the special general meeting held on March 20, 2023, the shareholders voted in favor of the Proposing Shareholders’ proposals to (i) amend certain provisions of the company’s Articles of Association, (ii) remove four incumbent members of the Board, including Chairman and Chief Executive Officer Yoav Stern, and (iii) appoint two director nominees, Kenneth H. Traub and Dr. Joshua Rosensweig, as directors of the company. Although the Proposing Shareholders believe that the Special Meeting was valid, including that Messrs. Traub and Rosensweig were duly elected to the Board at the Special Meeting, the company is challenging the validity of the Special Meeting in Israeli court, which the Proposing Shareholders are vigorously defending. Most recently, the Israeli court issued an order stating that Messrs. Traub and Rosensweig shall serve as non-voting observers on the Board during the pendency of the litigation.
· In addition to the Israeli litigation, on March 27, 2023, the company filed a lawsuit against Murchinson Ltd and certain other third parties.
· On May 1, 2023, Murchinson Ltd (5.8%) filed a lawsuit against the company and certain other third parties, including Mr. Stern seeking to recover its costs and attorneys fees and punitive damages arising from the company's Complaint. Source
· On May 2, 2023, Anson Funds (6.2%) stated its belief that the allegations by the company contained in the complaint are without merit and intend to defend themselves. Source
· On June 27, 2023, Murchinson delivered a private letter to the Board expressing its concerns over the increased tender offer price for Stratasys shares and the lack of due process and shareholder approval. It criticizes potential plans for a hasty equity issuance that would dilute shareholders' interests.
· On July 20, 2023, Murchinson (5.9%) sent a letter to the Board expressing concerns about the delayed AGM and the Board's alleged attempts to disenfranchise shareholders. It also informed the Board of its decision to convert a portion of ADSs held by Nomis Bay into Ordinary Shares, which was completed on July 18, 2023. As a result, Nomis Bay now holds 1,500,000 ADSs and 3,000,000 Ordinary Shares.
· On July 31, 2023, Murchinson demanded the company to add resolutions to improve corporate governance at the AGM on September 7, 2023. This includes electing experienced and independent director nominees, amending the Articles of Association, and replacing/removing Board members. Source
· On August 17, 2023, Murchinson released an investor presentation detailing why they believe wholesale change to the Board is urgently required to restore accountability, address broken governance and drive shareholder value at the company. The Investor Presentation also details the Proposing Shareholders’ five-pillar plan to improve leadership, capital allocation and corporate governance at the company, which they believe can only be accomplished through a reconstituted Board. The Proposing Shareholders therefore encourage the shareholders to support the proposals to remove the incumbent directors, elect their independent nominees and improve corporate governance at the AGM, scheduled for September 7, 2023. The Proposing Shareholders believe their independent nominees who would join current non-voting directors Kenneth Traub and Dr. Joshua Rosensweig, have the right skill sets and expertise to put the company on the path to shareholder value creation.
· On October 25, 2023, Murchinson (6.6%)delivered a letter to the company demanding that the company add to the agenda of the EGM of Shareholders scheduled to be held on December 13, 2023 various resolutions proposed by them, including resolutions to (i) remove Mr. Yoav Stern and Mr. Oded Gera from the Board, (ii) appoint two highly-qualified director nominees, Ms. Timor Arbel-Sadras, and Mr. Ofir Baharav (the “Murchinson Director Nominees”), to the Board, and (iii) amend certain provisions of the company’s Articles of Association, including the addition of a new Article relating to certain major transactions involving the company requiring shareholder approval. Source
Update
On December 7, 2023, Murchinson Ltd. sent a letter to the Board informing that it's converting some ADSs into Ordinary Shares to hold more than 5% of voting rights. This conversion is aimed at protecting shareholders' interests. Murchinson plans to demand a special shareholder meeting and propose a new article requiring approval for acquisitions over $50,000,000. These actions are taken due to the Board's lack of responsiveness and concerns about the CEO's recent actions and statements.