13D weekly report - Sep 02, 2024 to Sep 06, 2024

Voss Capital Explores Shareholder Value Maximization, Including Potential Sale at International Money Express, Inc (IMXI)

Key Summary: On September 5, 2024, Voss Capital (5.6%) announced it would continue engaging with the Board and management to explore options for maximizing shareholder value, including a potential sale of the company.

Market Cap: $585 million | International Money Express, Inc., together with its subsidiaries, operates as an omnichannel money remittance services company in the United States, Latin America, Mexico, Central and South America, the Caribbean, Africa, and Asia.

Voss Capital

 On September 5, 2024, Voss Capital (5.6%) stated that it has engaged, and intend to continue to engage, in communications with the Board and management team regarding ways to maximize shareholder value at the company, including, but not limited to, a sale of the company in a take private transaction. Source

Steamboat Capital Partners

• On March 9, 2020, Steamboat Capital Partners (5.8%) disclosed that on January 28, 2020, Parsa Kiai, Managing Member of Steamboat Capital Partners met with the company and proposed that he be added to the Board of Directors at the next convenient opportunity. Source
• On March 24, 2020, Steamboat Capital Partners increased its stake to 6.8%.

Hoche Partners Criticizes Procaps (PROC) for Delayed Disclosures and Management Issues

Key Summary: On September 3, 2024, Hoche Partners criticized Procaps Group's press release for delaying disclosures, manipulating financials, and lacking investigation transparency. They condemned past management practices and questioned the effectiveness of the new CEO, suggesting Procaps might face bankruptcy without delayed bank payments.

Market Cap: $206 million | Procaps Group S.A. develops, produces, and markets pharmaceutical solutions worldwide.

On September 3, 2024, Hoche Partners Pharma Holding S.A. (14.1%) criticized Procaps Group's recent press release, highlighting concerns over delayed disclosures, questionable management practices, and the lack of transparency regarding ongoing investigations. Hoche condemned the previous management’s practice of inflating sales and EBITDA figures through manipulated inventory and criticized the Board for opposing an independent investigation administrator. They also questioned the value added by the new CEO and expressed skepticism about the Company’s financial stability, suggesting that without delayed bank payments, Procaps might face bankruptcy. Source

Politan Capital sends letter to shareholders of Masimo Corporation (MASI)

 Key Summary: In September 2022, Politan Capital Management raised governance and board representation issues with Masimo's CEO, leading to a legal complaint in October 2022. By May 2023, Politan's board nominees were elected, despite the company's commitment to only one. In March 2024, Politan nominated new candidates, criticized governance, and demanded transparency on business dealings. They raised concerns about voting manipulation and criticized Masimo’s meeting delay in July 2024. Politan's attempts to expedite the annual meeting and prevent proxy vote manipulation led to further legal actions, with both parties denying allegations as of August 2024.

Market Cap: $6 billion| Masimo Corporation develops, manufactures, and markets noninvasive monitoring technologies and hospital automation solutions worldwide..

• In September 2022, Politan Capital Management (8.8%) initiated discussions regarding corporate governance and strategic initiatives with the CEO and Chairman, Joe Kiani, expressing interest in board representation. However, after the board approved a rights agreement and amended corporate bylaws, Politan raised legal concerns and requested a meeting with the full board, which was not scheduled. This led to a legal complaint filed by Politan in October 2022, seeking relief against the company and board members.
• In May 2023, Politan submitted formal notices of intent to present a stockholder proposal and nominated two director candidates for election to the board at the 2023 AGM. This was supported by recommendations from proxy advisory firms ISS and Glass Lewis. Despite the company's commitment to appoint one of Politan's nominees, Michelle Brennan, contingent upon stockholder approval of board expansion and reelection of incumbent directors, both of Politan's nominees, including Quentin Koffey, were elected to the board at the June 2023 annual meeting.
• On March 25, 2024, Politan Capital Management (8.9%) announced its nomination of two candidates for the Board at the 2024 AGM. Quentin Koffey, a then-current director, expressed dissatisfaction with the lack of transparency and governance under CEO Joe Kiani. Politan supported a strategic review but criticized the Board's oversight. They proposed Dr. Darlene Solomon and William "Bill" Jellison as independent directors to address governance issues and enhance expertise. Politan urged engagement with shareholders to resolve concerns. Source
• On May 8, 2024, Politan Capital Management submitted a demand letter to the company seeking access to records regarding the company's consumer business separation and undisclosed joint venture partner.
• On May 9, 2024, Quentin of Politan Capital Management responded to Craig Reynolds of Masimo Corporation regarding proposals to avoid a proxy contest. Politan questioned the effectiveness of Masimo's approach and suggested adding Darlene Solomon and Bill Jellison to the board to address governance issues, emphasizing the need for a majority of independent directors. Source
• On June 14, 2024, Politan Capital Management filed proxy materials seeking support for its nominees.
• On June 26, 2024, Politan Capital Management updated its website, www.AdvanceMasimo.com in connection with the solicitation of stockholders of Masimo Corporation. Also, it posted a presentation, "Masimo Urgently Needs A Truely Independent Board" and released an open letter to the shareholders reiterating its concers and urges shareholders to vote for its nominees.
• On July 3, 2024, Politan Capital Management alerted the Masimo Board about a potential scheme to manipulate the Annual Meeting of Stockholders. They claimed a brokerage linked to an investor friendly with Mr. Kiani voted 9.9% of the company's stock, exceeding reported ownership and involving suspicious share movements. They urged the Board to set a new record date, investigate Mr. Kiani's involvement, and ensure SEC compliance. Source
• On July 12, 2024, Politan Capital Management sent a letter to the Board expressing concerns about alleged manipulation of the upcoming annual meeting through an empty voting scheme orchestrated by RTW Investments, a major shareholder linked to the company' CEO and Chairman, Joe Kiani. Despite RTW's claimed 9.9% voting stake, recent disclosures suggest they may have significantly reduced their economic exposure, raising questions about their influence on voting outcomes. Politan Capital criticized the Board for not addressing these concerns adequately, calling for independent investigation and shareholder protections to ensure a fair election process at Masimo.
• On July 12, 2024, Politan Capital announced that Glass Lewis has recommended that shareholders vote FOR the election of Politan’s nominees, Darlene Solomon and Bill Jellison, to the Company’s Board of Directors. Source
• On July 15, 2024, Politan Capital announced that ISS has recommended that shareholders vote FOR the election of Politan’s nominees, Darlene Solomon and Bill Jellison, to the Company’s Board of Directors. Source
• On July 15, 2024, the company  filed a complaint against the Politan Defendants and others, alleging violations including a declaration that Mr. Jellison and Dr. Solomon's nomination notice did not comply with the company’s bylaws, seeking an injunction against Politan from voting proxies due to misleading statements, and invalidating such proxies. Source
• On July 16, 2024, Politan Capital (8.9%) criticized the Board's decision to move the Annual Meeting from July 25, 2024, to September 19, 2024, and its lawsuit against Politan and founder Quentin Koffey, a Masimo Board member. Koffey condemned Masimo’s governance and CEO Joe Kiani's actions, claiming the meeting delay is a tactic to avoid shareholder votes and violates bylaws and Delaware law. Politan vowed to ensure the meeting occurs by September 19 and urged shareholders to vote for its nominees. Source
• On July 17, 2024, Politan filed a lawsuit in the Delaware Court of Chancery against Masimo Corporation and three of its directors, seeking to expedite the 2024 Annual Meeting and prevent further delays. Source
• On August 23, 2024, the company filed a Supplemented Memorandum seeking a preliminary injunction to prevent Politan from voting proxies until corrective disclosures are made. Source
• On August 30, 2024, Politan Capital deny all allegations in each of the Amended Complaint and the Preliminary Injunction Motion. Source
• On September 5, 2024, Politan Capital emphasized the urgent need for boardroom change ahead of the company's 2024 Annual Meeting. In a letter to shareholders, Politan reaffirmed the importance of electing its nominees, Darlene Solomon and William Jellison, to ensure independent oversight. Politan criticized Masimo's governance and legal tactics, asserting confidence in overcoming challenges to its nominations.

Riot Issues Open Letter to Fellow Bitfarms (BITF) Shareholders Ahead of Upcoming Special Meeting

Key Summary: On June 12, 2024, Riot Platforms criticized Bitfarms' 15% Poison Pill as poor governance and called for Chairman Nicolas Bonta's resignation. Riot also nominated three board candidates on June 24. On August 14, 2024, Riot raised its stake to 18.9% and requisitioned a special meeting to remove three directors.

Market Cap: $872 million | Bitfarms Ltd. engages in the mining of cryptocurrency coins and tokens in Canada, the United States, Paraguay, and Argentina.

•   On June 12, 2024, Riot Platforms (13.1%) criticized the company's  adoption of a shareholder rights plan (Poison Pill) with a 15% trigger, below the customary 20%, as disregarding good governance. Riot had urged the company to consult large shareholders and called for Chairman Nicolas Bonta's resignation to address governance concerns. Source
•    On June 13, 2024, Riot Platforms increased its stake to 14% and stated that it intends to requisition a special shareholders' meeting to nominate new directors due to concerns over corporate governance. Source
• On June 24, 2024, Riot Platforms (14.9%) sent a Requisition Letter to the board of directors to call a special shareholders' meeting aimed at electing new independent Board members.  Riot has nominated John Delaney, Amy Freedman, and Ralph Goehring as independent replacements to restore shareholder confidence and bring necessary experience to the board. The letter also stated the withdrawal of its previous acquisition proposal of US$2.30 per share and announced plans to apply to the Ontario Capital Markets Tribunal to cease-trade the shareholder rights plan (Poison Pill) adopted on June 10, 2024.
• On August 2, 2024, Riot Platforms increased its stake to 16.9% and issued a press release announcing its requisition for a special meeting to remove three directors from the board.
• On August 14, 2024, Riot Platforms increased its stake to 18.9% and issued a press release announcing its requisition for a special meeting to remove three directors from the board.
• On September 3, 2024, Riot Platforms (19.9%) issued an open letter to the company highlighting the need for governance reform to enhance shareholder value. Riot reduced its proposed slate of new directors from three to two in response to recent board changes and public pressure. The letter warned against further actions by Bitfarms to entrench its current board, emphasizing the importance of allowing shareholders a fair say

GAMCO Opposes Dril-Quip's (DRQ) Merger with Innovex

Key Summary: On August 7, 2024, GAMCO sent a letter to the Chairman, stating it will vote “Against” the merger with Innovex Downhole Solutions, Inc. at the September 5, 2024 Special Meeting of Stockholders.

Market Cap: $545 million | Dril-Quip, Inc., together with its subsidiaries, designs, manufactures, sells, and services engineered drilling and production equipment for offshore and onshore applications worldwide.  

•   On August 7, 2024, GAMCO (8.32%) sent a letter to the Chairman of the Board reiterating that it intends to vote “Against” the company’s merger with Innovex Downhole Solutions, Inc. at the company’s September 5, 2024 Special Meeting of Stockholders. GAMCO believes Dril-Quip is more valuable as a standalone company, with a potential 2025 PMV of $39 per share, versus $36 for the merged entity.
• On August 14, 2024, GAMCO issued a press release reiterating that it intends to vote “Against” the company’s merger with Innovex Downhole Solutions, Inc. at the September 5, 2024 Special Meeting of Stockholders. Source
• On August 20, 2024, issued a press release addressing the company's misleading claim that ISS supports its proposed merger with Innovex Downhole Solutions. The release clarified that ISS actually recommended against Dril-Quip's proposal to amend its certificate of incorporation, which is crucial for the merger's approval. GAMCO criticized Dril-Quip's management for attempting the merger without securing a control premium for shareholders, resulting in a significant decline in Dril-Quip's stock value. The document also highlights the excessive compensation that Dril-Quip's executives stand to receive as part of the merger process, emphasizing the detrimental impact on shareholder value.
•   On August 23, 2024, Glass Lewis recommended that shareholders vote "Against" all proposals at the company's special meeting of shareholders. Source
• On August 26, 2024, GAMCO  issued a press release reiterating that it intends to vote “Against” the company’s merger with Innovex Downhole Solutions, Inc. at the September 5, 2024 Special Meeting of Stockholders. Source
• On September 4, 2024, GAMCO published a post on X regarding the company’s pending merger with Innovex Downhole Solutions.

Outerbridge Capital Acknowledges Operational Improvements and SECaaS Expansion at Allot Ltd. (ALLT)

Key Summary: Between 2021 and 2024, Outerbridge Capital and QVT Financial supported Allot’s growth, particularly in cybersecurity and SECaaS, projecting strong revenue increases despite concerns over capital raises and shareholder value. They secured board representation in 2022 and praised the company's operational improvements by 2024. Meanwhile, Lynrock Lake Partners (21.8%) discussed board composition in March 2022 and was offered a board seat in November, pending shareholder approval.

Market Cap: $128 million| Allot Ltd. provides network intelligence and security solutions to protect and personalize the digital experience in Europe, Asia, Oceania, the Middle East, Africa, and the Americas. . 

Outerbridge Capital Management and QVT Financial

• On August 23, 2021, Outerbridge Capital Management and QVT Financial (collectively, the “Investor Group” which holds 7.3%) stated that they were pleased with Allot’s increased efforts to highlight its cybersecurity business to investors. They noted that the company has forecasted 400% revenue growth, to $25 million, for its Allot Secure SECaaS product line in FY 2022; based on this and on developments in the cybersecurity market broadly, Outerbridge believes that $100 million or more of Allot Secure revenue is attainable in the company’s FY 2024. They believe that NetProtect may also generate $100 million or more of annual revenue in the coming years and that the present value of these opportunities, combined with the company’s healthy core business and cash balances, significantly exceeds $1 billion. Source
• On November 15, 2021, the Investor Group stated that they remain encouraged by the rate and quality of new customer wins for the company’s burgeoning cybersecurity business, and they are pleased by the company's decision to showcase its security-as-a-service (SECaaS) annual recurring revenue (ARR) to investors on a quarterly basis. The Investor Group stated their belief that the share price remains deeply undervalued and, accordingly, they has held and plans to continue holding discussions with the management team and board on topics related to optimizing financial reporting, board composition, and enhancing value for all shareholders.. Source
• On February 18, 2022, the Investor Group (10.3%) delivered a letter to the Board reiterating their belief in the company’s potential and their support of the CEO and management team, but also noting certain concerns with worrisome actions taken by the company recently, including its recent dilutive capital raise and the Board’s failure to deliver shareholder value over the course of the prior few years. The Investor Group believes that the company’s share price is dramatically undervalued, particularly given the leading market share in network-based security as a service (“SECaaS”) solutions, recent deal signings, strategic partnerships, and profitable core business in deep packet inspection  (“DPI”) and network traffic management. Illustratively, and notwithstanding recent execution issues, the Investor Group believes the net present value of the company’s SECaaS business is between $10 and $20 per share, while the net present value of the company’s DPI business is between $10 and $15 per share, for a total sum of the parts valuation of between $20 and $35 per share, while the company’s closing share price today was just $7.62. They believe that this divergence between the current share price and the intrinsic value of the company signals the market’s significant lack of confidence in the Board and requires immediate attention. To this end, the Investor Group has proposed the appointment of a shareholder representative to the Board to strengthen the Board’s public markets acumen and shareholder alignment and to ensure that appropriate process and consideration are followed on important matters affecting all shareholders. Source
• On May 11, 2022, , the Investor Group (7.5%) entered into a Cooperation Agreement with the company and pursuant to it, the company agreed to immediately appoint Raffi Kesten (the “Agreed Nominee”) as a director to fill the vacancy on the Board created by the departure of Miron (Ronnie) Kenneth, a Class II member of the Board.
• On September 3, 2024, Outerbridge Capital (2.8%) acknowledged the company's cost reductions and operational improvements, resulting in positive free cash flow in Q2 2024 and a commitment to sustain it. They highlighted a recent SECaaS expansion with a Tier-1 European customer and expect more growth in traffic management and analytics due to favorable market trends. SourceLynrock Lake Partners
• On March 30, 2022, Lynrock Lake Partners (21.8%) stated that in light of a proposal by Outerbridge Capital to add a shareholder representative to the Board, a director of the company invited Ms. Cynthia Paul of Lynrock Lake Partners to have a discussion on March 28, 2022. The two parties discussed the composition of the Board in an effort to enhance value for all shareholders. Source
• On November 14, 2022, Lynrock Lake Partners (23.4%) announced that it was offered a Board seat subject to shareholder approval at the upcoming AGM. Source

Ted D. Kellner nominates Board candidates to AIM ImmunoTech Inc (AIM)

Key Summary: On September 3, 2024, Mr. Kellner submit a notice to nominate himself, Mr. Deutsch, and Mr. Chioini for election to the board at the 2024 AGM . In Aug 2023, AIM rejected Ted Kellner's board nomination. Subsequently, Kellner filed a lawsuit challenging bylaw amendments. Delaware Court invalidated four Board bylaws favoring Kellner on Dec 28, 2023, but found his nominations non-compliant. Kellner pursued an expedited appeal and sought to delay the Annual Meeting, while advocating for a vote on his nominees. At the AGM, shareholders elected all the company's director nominees.

Market Cap: $19 million | AIM ImmunoTech Inc., an immuno-pharma company, focuses on the research and development of therapeutics to treat multiple types of cancers, viral diseases, and immune-deficiency disorders in the United States. 

Update

• On August 14, 2024, Mr. Kellner stated that he intends to submit a notice to nominate himself, Mr. Deutsch, and Mr. Chioini for election to the Company’s board of directors at the 2024 annual meeting of stockholders well ahead of the September 13, 2024 deadline. Source
• On September 3, 2024, Mr. Kellner submitted to the Company notice of his intent to nominate himself, Mr. Deutsch and Mr. Chioini for election to the board at the 2024 AGM. Mr. Kellner also notified the Company that he would supplement the Notice no later than September 13, 2024 to identify an additional highly qualified and independent nominee. Source

Background

• On August 7, 2023, Ted D. Kellner (who, together with Todd Deutsch, owns 6.5%) stated that he had delivered a notice to the Company regarding his intent to nominate himself, Mr. Chioini, and Mr. Deutsch for election to the board at the 2023 AGM. Source
• On August 23, 2023, the Company rejected Mr. Kellner's Notice. On August 25, Mr. Kellner sued in the Delaware Court of Chancery seeking declarations that the bylaw amendments are unlawful and accuses directors of breaching fiduciary duties. He requested a quick trial before the 2023 Annual Meeting. Source
• On October 13, 2023, Ted D. Kellner filed proxy materials seeking support for his nominees. Source
• On November 1, 2023, Ted D. Kellner filed proxy materials seeking support for his nominees.
• On December 28, 2023, the Delaware Court of Chancery invalidated four advance notice bylaw provisions that had been adopted by the Board in March 2023, favoring Mr. Kellner. However, the Court found that Mr. Kellner's notice of nominations did not comply with some of the Company's remaining advance notice provisions. Mr. Kellner disagreed with the Court's opinion on this matter and pursued an expedited appeal while seeking to halt the Company's Annual Meeting during the appeal. AIM had announced that it would disregard Kellner Group's nominations, but stockholders still had the option to "withhold" votes for incumbent directors. Mr. Kellner had intended to pursue his appeal and seek relief for a stockholder vote on Kellner Group nominees, even if the Annual Meeting proceeded as scheduled.
• At the AGM held on January 5, 2024, shareholders have elected all four of the Company’s directors.  But two directors received more than 40% withheld votes. Source

Past

In July 2022, Jonathan Jorgl and his nominees, Robert L. Chioini and Michael Rice, collectively known as the AIM Stockholder Full Value Committee, notified AIM ImmunoTech Inc of their intention to nominate Chioini and Rice for the company's board, aiming to replace Directors William Mitchell and Stewart Appelrouth. The committee reiterated its commitment to this cause in August, and later, in September, filed proxy materials seeking support for their nominees. Disagreements arose as AIM considered the nomination notice invalid due to non-compliance with the company's bylaws. Jorgl sued AIM in Delaware's Chancery Court seeking validation of the nomination. In October, AIM's claims against the committee were dismissed, and the committee continued to voice its concerns, especially after discovering alarming statements made by incumbent directors during the ongoing legal proceedings. In November, the Chancery Court denied Jorgl's plea for a preliminary injunction. Although the committee disagreed with this decision, they opted against proceeding with a trial or seeking an appeal. Finally, at the AGM held on November 3, 2022, all three company's director nominees were elected to the Board.