Recently Echo Therapeutics (ECTE), the little reverse merger company that can’t (fill in the blank – get a 510(k) approved, raise money from reputable investors, generate meaningful revenue, run a properly registered trial, etc.), issued their proxy statement.
In the proxy, stuckholders shareholders are asked to approve a number of measures:
1. Increase the authorized shares a full 50% from 100mm to 150mm. This is very strange considering the company only has 38.59mm shares outstanding. With so much room to issue more stock, why does the company need an additional 50mm shares?
2. Management also wants stuckholders shareholders to approve an over 100% increase in the option pool. Instead of having 4.7mm shares available to enrich themselves, management now wants 10mm shares.
3. The firm also wants investors to re-elect James F. Smith and William Grieco to the BoD. According to the proxy:
From 2004 to 2006, Mr. Smith served as Vice President and Chief Financial Officer of Aphton Corporation (NASDAQ: APHT). Mr. Smith’s extensive financial management expertise and his experience with all aspects of finance, including control, financial reporting, tax, treasury, and merger and acquisitions, primarily in the healthcare industry, make him uniquely qualified to serve on our Board and as the Chairman of the Audit Committee.
Smith surely is “uniquely qualified.” Echo CEO Patrick Mooney also worked at Aphton from 2004 to 2006, where Smith was his CFO. Unlike the whitewashing that goes on in the ECTE proxy, at BuyersStrike! we will give you Aphton’s proper ticker APTHQ.
Yes, the team of Mooney and Smith ran poor Aphton (APTHQ) right into bankruptcy. Good work gentlemen, and good luck with the dilution.