Creek Mountain Partners Responds To Generex Statements
EXMORE, Va., Jan. 22, 2020 /PRNewswire/ -- Creek Mountain Partners, Inc. ("CMP") has issued the following statement:
CMP is a private shareholder of Generex Biotechnology Corporation. Generex's CEO, Joseph Moscato, has made numerous false and defamatory public statements about CMP, including a series of them in Generex's press releases dated January 15 and January 16, 2020, and on a public investor conference call on January 21, 2020. CMP cannot comment about any unrelated parties referenced in Generex's press releases nor its public investor call, however, CMP wishes to provide the following facts about its own dealings with Generex:
- Pursuant to a Stock Purchase Agreement dated January 14, 2019, CMP sold its 592,682 shares of Series A Preferred Stock of Olaregen Therapeutix Inc. ("Olaregen") to Generex in exchange for 4.0 million shares of Generex and a $2.0 million promissory note.
- The original terms of the promissory note committed Generex to payment in full, with interest, by February 28, 2019. The due date of the promissory note was subsequently extended to August 1, 2019 by mutual agreement (contrary to Mr. Moscato's public misrepresentations, CMP has not agreed to extensions "every quarter"). Despite an offer by CMP in October 2019 to renegotiate the terms of the note, Generex has never responded, has never made any payments under the note, and is currently in default.
- Because CMP sold its Olaregen shares without contingency, the 4.0 million shares of GNBT were deemed "fully paid for" for the purpose of Rule 144 immediately upon CMP's execution and delivery of the Stock Purchase Agreement, countersigned by Mr. Moscato on behalf of Generex. CMP's shares represented 6.63% of Generex's outstanding shares as of January 14, 2019, as reported in CMP's Schedule 13G filing.
- No provision of the Stock Purchase Agreement, nor any other document executed at any time between CMP and Generex, imposed any restrictions on CMP selling its Generex stock once its Rule 144 holding period was satisfied.
- Shortly after July 14, 2019 (six months after CMP acquired its Generex stock), CMP's legal counsel issued a Rule 144 opinion letter which was accepted by both Generex's in-house and outside legal counsel, thereby allowing CMP's shares of Generex to become freely tradeable. Mr. Moscato provided final authorization instructions to Broadridge Financial Solutions, Generex's transfer agent, to remove the restrictive legend from these shares. No additional regulatory filing was required in order for the legend to be removed or before the shares could be publicly sold.
- No sales of Generex stock by CMP at any time were illegal or improper in any way.
- CMP continues to hold a substantial number of Generex shares as of the date hereof, but reserves the right to sell some or all of them at any time without updating this statement.
- CMP signed a "dividend waiver" agreement on June 7, 2019 that applied specifically to a 1:1 dividend of shares of GNBT to be issued upon an uplisting to NASDAQ. CMP has repeatedly reminded Generex and its attorneys that the dividend waiver was never applicable to the currently planned 2:5 dividends of GNBT and NGIO; that there has not been an uplisting to NASDAQ; and that, in any event, the dividend waiver document clearly stated that the waiver would expire in 180 days, i.e., on December 4, 2019.
- CMP's dividend waiver agreement did not include any requirement that CMP hold its GNBT shares in "book entry." In fact, the agreement specifically stated that if GNBT's hoped-for uplisting to NASDAQ did not occur by July 14, 2019, "CMP may unrestrict and GNBT will provide support as reasonably requested by CMP (including provision of an opinion letter for removal of any restrictive legend) for the ability of CMP to unrestrict CMP's 4,000,000 shares on July 14, 2019, such that CMP may publicly sell the securities subject to the waiver subject to applicable, if any, resale limitations contained for non-affiliates in Securities Act Rule 144 as CMP is not an affiliate pursuant to Rule 144 at this time."
- As CMP's dividend waiver is no longer in effect, if Generex's currently proposed stock dividends are ultimately approved by FINRA, CMP will be entitled to and expects the same treatment of all common shareholders as of the record date of August 30, 2019, with respect to receipt of any such dividends.
In summary, CMP's interests are aligned with all Generex shareholders with respect to finding a meaningful path to value creation and moving toward timely business execution rather than dwelling on Generex's series of missed deadlines and extensive excuses. Further, even in light of the false and defamatory public statements regarding CMP, CMP remains open to a constructive dialogue with Generex rather than the current barrage of personal and unprofessional insults by Mr. Moscato.
CMP reserves all its legal rights and remedies against Generex and looks forward to discussions with all applicable regulatory authorities.
About Creek Mountain Partners, Inc.
Creek Mountain Partners is a small private investment group that provides growth capital to entrepreneurs in a variety of sectors. Our mission is to provide professional support in addition to capital to help companies grow and thrive.
SOURCE Creek Mountain Partners