Richardson & Patel, LLP announced today that it is issuing the following
press release on behalf of Ki Yong Choi who is seeking support to
replace the Board of Cryo-Cell International, Inc. (OTCBB: CCEL) at the
Annual Meeting of the Stockholders.
The following is the text of the letter from Ki Yong Choi:
June 7, 2012
KI YONG CHOI WILL BE SEEKING YOUR SUPPORT TO REPLACE THE BOARD OF
CRYO-CELL INTERNATIONAL, INC. (OTCBB: CCEL) AT THE ANNUAL MEETING OF
Dear Fellow Cryo-Cell Stockholder:
I am the largest stockholder of Cryo-Cell International, Inc. I have
given notice to Cryo-Cell that I intend to nominate six individuals to
replace the existing Cryo-Cell Board of Directors. I have also filed
preliminary proxy materials with the Securities and Exchange Commission
for this purpose.
I expect to be sending out definitive proxy materials with proxy cards
in the near future, but time will be short and I will need the help of
all the Company’s stockholders to replace the current Board as the first
step in my efforts to maximize value for all stockholders.
I am writing this letter to inform you why I am seeking to replace the
Board, and why you should support me when you receive my proxy materials.
Information about me. I am an entrepreneur and an investor with a
keen interest in biomedical sciences. I am also Cryo-Cell’s largest
stockholder. I own, of record and beneficially, a total of 2,186,568
shares of Cryo-Cell common stock, which is approximately 18.4% of the
outstanding shares, based on the information included in the Quarterly
Report on Form 10-Q which Cryo-Cell filed with the Securities and
Exchange Commission on April 16, 2012. I am the President of Cathedral
Hill Associates, Inc., a company I founded in 1992, which owns and
operates full service hotels in the metropolitan areas of Seattle, Los
Angeles and Dallas. As a business owner and as an investor, I understand
business planning and operations and I have extensive experience in
business management and business development. As the single biggest
stockholder of Cryo-Cell, my primary objective is to ensure that the
company realizes its maximal potential and brings the greatest possible
value to all of its stockholders.
Why will I be asking for your support to replace the Cryo-Cell Board?
At the Cryo-Cell annual stockholders meeting that was held on August 25,
2011, a group consisting of David I. Portnoy, Mark L. Portnoy, Jonathan
H. Wheeler, M.D., George Gaines, Harold D. Berger, Partner Community,
Inc., uTIPu Inc., Mayim Investment Limited Partnership, Jamie H. Zidell,
Deborah Portnoy, Lynne Portnoy, Gilbert Portnoy, Capital Asset Fund #1
Limited Partnership and Charles W. Northcutt, Jr. succeeded in
challenging Cryo-Cell’s nominations to the Board of Directors and in
obtaining stockholder approval of the five persons nominated by them.
The proxy statement filed by these individuals promised, among other
things, to seek to eliminate any and all unnecessary costs expended by
Cryo-Cell, reduce executive cash compensation, increase revenues,
explore opportunities to expand Cryo-Cell’s product offerings to include
storage of other types of stem cells and other ancillary services and be
receptive to input from fellow stockholders and to work diligently and
intelligently to increase the value of all stockholders’ investments in
the Company. In my opinion, none of these stated goals has been achieved.
Following the 2011 annual meeting, Messrs. David Portnoy and Mark L.
Portnoy were appointed as “co-Chief Executive Officers” of Cryo-Cell.
These individuals have had approximately 10 months to put together a
business plan that would achieve the goals set out above. To date I can
see no evidence of any plan to improve Cryo-Cell’s prospects.
Cryo-Cell’s cash is being used at an alarming rate, revenues are
falling, expenses are rising and I see no evidence of Cryo-Cell’s
operations expanding. If my nominees are elected, I intend to recruit an
industry professional to lead the company.
Who are my nominees? Aside from myself, my nominees include Gary
Weinhouse, Esq., who brings over a decade of experience with
health care organizations and a deep understanding of the health care
and medical field, Michael W. Cho, Ph.D., who brings to
the Board a broad spectrum of scientific and research and development
experience in the biomedical field along with his experience in
overseeing three research programs funded by NIH with a budget of nearly
$14 million, Warren Hoeffler, Ph.D., the founder,
President and Chief Executive Officer of Xgene Corporation, who brings
to the Board extensive experience in business, medicine, and
biotechnology, Michael D. Coffee, the Chief Business
Officer for Medicinova, Inc., a publicly traded company, who brings to
the Board excellent skills relating to managing life sciences businesses
and developing businesses in the life sciences field, as well as public
company experience, and Ajay Badlani, a Chartered
Financial Analyst and a member of the Association for Investment
Management and Research, who brings to the Board extensive experience in
finance and investment and will be instrumental in assisting the Company
with capital raising and management. Among them, my nominees have
management, scientific, investment, finance and accounting expertise
which will give stockholders a Board that is qualified and incentivized
to make value maximizing decisions on behalf of stockholders.
What are my plans to enhance stockholder value? If my nominees
are elected we expect to, among other things:
Immediately stop spending money on unnecessary expenses, stock options
and incentives for unqualified executives;
Aggressively recruit one Chief Executive Officer that is qualified and
has relevant experience for the position. If my nominees are elected,
our goal will be to identify and recruit a qualified independent
Chief Executive Officer within 3 months;
Focus and improve the core business of cell storage. There are
currently available stem cell and cell freezing technologies that can
be licensed to potentially expand Cryo-Cell’s product line and I
believe these could expand operating revenue; and
Deploy capital in stockholder value enhancing projects.
What are the problems I perceive with Cryo-Cell’s current co-Chief
Executive Officers? I am unable to understand why a company the size
of Cryo-Cell needs two Chief Executive Officers. While Messrs. Portnoy
pledged to reduce executive cash compensation, in fact, by appointing
two Chief Executive Officers, Cryo-Cell now pays two salaries, provides
benefits to two executives (including commuting expenses for David
Portnoy and moving expenses for Mark Portnoy) and grants stock options
to two individuals. The expense related to this arrangement troubles me,
and I think it should be of concern to you as well.
Why should stockholders reject the response from Cryo-Cell’s
management to my campaign to replace the Board? Cryo-Cell’s current
Board has had approximately 10 months to make good on the promises they
made to us as stockholders at the 2011 annual meeting. Not only have
they failed to do what they promised, but the decrease in revenues and
increase in expenses seems to indicate that Cryo-Cell’s operations are
headed in the wrong direction under their management. Should you trust
this same Board to now turn this situation around? I don’t.
What should you do now? You should wait to receive the definitive
proxy materials and proxy card that I will send to you. You should
not return any proxy card furnished to you on behalf ofCryo-Cell.
Whom should you contact if you have questions? I have retained Alliance
Advisors, LLC as my proxy advisory firm. If you have questions,
please contact them at 200 Broadacres Drive, Third Floor, Bloomfield,
New Jersey 07003. Call Toll Free: (877) 777-2338; Banks and
Brokers Call Collect: (973) 873-7700.
I thank you and look forward to your support.
Ki Yong Choi
In connection with his intended proxy solicitation, Ki Yong Choi intends
to file a definitive proxy statement with the Securities and Exchange
Commission (the “SEC”) to solicit stockholders of Cryo-Cell
International, Inc. MR. CHOI STRONGLY ADVISES ALL STOCKHOLDERS OF
CRYO-CELL INTERNATIONAL, INC. TO READ THE PROXY STATEMENT WHEN IT
BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION,
INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN ANY SUCH PROXY
SOLICITATION. SUCH PROXY STATEMENT, WHEN FILED, AND ANY OTHER RELEVANT
DOCUMENTS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV.
In accordance with Rule 14a-12(a)(1)(i) under the Securities Exchange
Act of 1934, as amended, the following persons are anticipated to be, or
may be deemed to be, participants in any such proxy solicitation: Ki
Yong Choi, Gary Weinhouse, Michael W. Cho, Warren Hoeffler, Michael D.
Coffee and Ajay Badlani. Certain of these persons hold direct or
indirect interests in Cryo-Cell International, Inc. as follows: Mr. Choi
holds of record or beneficially a total of 2,186,568 shares of Cryo-Cell
International, Inc.’s common stock and Dr. Michael W. Cho is the record
holder of 14,166 shares of Cryo-Cell International, Inc.’s common stock.
Messrs. Choi, Weinhouse, Cho, Hoeffler, Coffee and Badlani each have an
interest in being nominated and elected as a director of Cryo-Cell
International, Inc. Information about the participants has been set
forth in the preliminary proxy statement filed by Mr. Choi with the SEC
on June 6, 2012 and will be included in Mr. Choi’s definitive proxy