MedCap's selective use of these third party sources is especially disturbing because they are based on limited distribution reports, usually only available to professional investors. Hence, MedCap's selective use of such information could easily mislead many or most of VaxGen's stockholders who do not have access to the full text of those reports. The ISS recommendations and their rationale are discussed in the addendum to this letter.
VaxGen believes these recent communications from MedCap show a flagrant disregard for accuracy. We have reason to believe that MedCap has made even more inaccurate and misleading claims in its conversations with other stockholders and third parties. We can only conclude that MedCap cares not about the truth; but rather about defeating the proposed merger at any cost.
In summary, MedCap and its principals have apparently determined to
sway the VaxGen-Raven merger vote any way they can. VaxGen believes this
includes the use of flawed arguments as well as false and misleading
information. As the CEO of VaxGen, I urge stockholders to examine the facts
objectively. If you do so, I continue to believe the correct outcome is to
vote "Yes" in favor of the merger.
James P. Panek
President and CEO
Detailed Discussion Regarding Financial and Liquidation Claims; ISS Recommendations
MedCap's Financial Analysis is both Incorrect and Shallow.
MedCap represents that VaxGen spent $56.1 million in 2007, or $40.1
million, before impairments or restructuring. In fact, neither of these
figures (which are drawn from the profit and loss account) are accurate
representations of the Company's cash burn in 2007. The best measure of
this is to be found in the Consolidated Statements of Cash Flows on page 39
of the Company's 2007 Annual Report
|SOURCE VaxGen Inc.|
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