Documents

8 pages
319 views

2017-10-26-MC-to-Petit

of 8
All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
Share
Description
2017-10-26-MC-to-Petit
Transcript
  Marc Cohodes P.O. Box 578 Penngrove, CA 94951 October 27, 2017 Via Federal Express Mr. Parker H. Pete Petit Chairman of the Board and Chief Executive Officer MiMedx 1775 West Oak Commons Ct. NE Marietta, GA 30062 Dear Mr. Petit: You and I have engaged in a verbal battle over the past few weeks and months about the business practices and accounting at the company you lead, MIMEDX. You have claimed that I am part of a conspiracy to deflate the MiMedx stock price and that I have made false allegations about the company. I, on the other hand, have reported on information provided to me by ex-employees, and I have read the analyses by Viceroy and Aurelius, two companies that you have now sued in what I believe is an attempt to stifle criticism of you and your company.  Now I have received evidence from a current employee, in the form of an email attached to this letter, that raises very serious claims about misconduct by Mimedx and its executives. The employee  –   who sent the email anonymously because of his or her fear of you  –   claims the following, among other things (full email attached, with sender’s name redacted): 1.   Management has deleted information and evidence from MiM edx’s computers. If true, and if it was done when MiMedx knew about an SEC investigation or inquiry, that may be a crime. 2.   You and other managers “ instructed people to avoid credits that would have destroyed most quarter sales and today ’ s [October 10, 2017] announcement is the final straw.”  3.   “ Mr. Petit was fully aware of the federal VA shelf stuffing in 2014, 15 and 16. By fully, he had dialogue with a number of us and also tasked Lou Roselli and others with avoiding a massive credit to avkare that would have destroyed the company report figures (I have the exact emails). ”  4.   “ Please stop lying. ”  5.   “ Mr. Petit knows the events about the revenue and the conduct of MM individuals is true including the distributors with obscene orders at the end of the quarters. ”  6.   There are emails from the US Veterans Administration reflecting concerns about consignments and shipments by MiMedx of unordered products.  Parker Petit October 27, 2017 Page 2 7.   MiMedx has engaged in channel stuffing by sending unordered products or consignments to doctors and others and then recording those shipments as sales. “ Mr. Petit knows about this, in one quarter alone there was $3M was shelving product to recognize sales when there was no sale. I can show other quarters with $2m+. … Since 2015 I know it ’ s false. ”  8.   The employee alleges that he/she has text messages reflecting orders from mangers to create fake sales at the end of multiple quarters, and was t old “it would be ironed out; we just had to hit the quarter.”  9.   You and other managers have retaliated against employees who raised concerns in the “Dear Pete” letter program that you established for complaints. “P eople stopped putting in the letters of concern (Dear Pete) when they became a trend of report a problem, get fired …. I and a few others have kept their mou ths shut and do as we are told.”  10.   “ I personally heard Mr. Petit state he would destroy them and their families when speaking about employees. ”  11.   “ When I read the Aurelius and Viceroy Reports [two analysts you have sued] they are sadly accurate. They miss lots of things that I can personally testify to .”  Mr. Petit  –   you have accused short sellers of improperly targeting your company,  but you don’t seem to understand that a well -run, financially responsible company has little to fear from short sellers or from analysts who write negatively about a company  because those companies’ stock prices are largely unaffected by negative cr  iticisms. Your company, on the other hand, has adopted the “attack the critics” tactics of such infamous and now defunct companies as Lernout & Hauspie, Media Vision Technology,  NovaStar Financial, AremiSoft, California Micro Devices, Network Associates, Concordia International Corp., Home Capital Group, Krispy Kreme Donuts, Boston Chicken, and others. I ask you publicly to stop attacking the critics and buckle down and respond to the criticisms. You may have to do it twice or more: once to the public and then again to government regulators and prosecutors. But, as Justice Louis Brandeis once wrote: “ Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most e fficient policeman.”  Very truly yours, Marc Cohodes  Parker Petit October 27, 2017 Page 3 -------- Original Message -------- Subject: HELP us please at mimedx Local Time: October 10, 2017 2:50 PM UTC Time: October 10, 2017 2:50 PM To: sjp@pbl-law.com <sjp@pbl-law.com>,  jsw@pgl-law.com < jsw@pgl-law.com>, lh@pbl-   law.com <lh@pbl-   law.com>, aduffie@scottswagnerlaw.com<aduffie@scottswagnerlaw.com>, info@nutechmedical.com   <info@nutechmedical.com>,  jml@jlclasslaw.com < jml@jlclasslaw.com>, brian@goldberglawpc.com<b   rian@goldberglawpc.com>, michael@goldberglawpc.com<michael@goldberglawpc.com>, LKandinov   @robbinsarroyo.com<LKandinov@robbinsarroyo.com>, dlbrown@sheppardmullin.com<dlbrown@she   ppardmullin.com>,  jwargo@wargofrench.com< jwargo@wargofrench.com>, dpernini@wargofrench.co   m<dpernini@wargofrench.com>, tmonahan@sheppardmullin.com<tmonahan@sheppardmullin.com>,   investigations@bespc.com<investigations@bespc.com>, bradley@blockesq.com<bradley@blockesq.   com>, editorial@thecapitolforum.com<editorial@thecapitolforum.com>, alowe@organo.com<alowe@o   rgano.com>,  john.carreyrou@wsj.com< john.carreyrou@wsj.com>, megan.twohey@nytimes.com<meg   an.twohey@nytimes.com>,  julie.tracy@wright.com< julie.tracy@wright.com>    Dear Attorneys, Journalists & Mr Petit, Sirs I appeal to everyone, anyone that can help us. I am an employee at MM (Mimedx) currently and I have been for some years. I cannot afford to be without an income and honestly fear raising these issues internally so reported them to regulators for fear I may end up prosecuted personally. I do not know where to start so apologize if it is erratic. There is enough information in this email to know I am still employed I include part of an email at the bottom so you will know its internal. We need help.  A southern raised person with southern values, I believe in the truth, people are really damaging our company by their wrong values and that includes Mr Petit. MM had no intention in cooperating with the SEC subpoena they mentioned, most of us saw evidence being deleted/changed, I was personally asked if I had deleted certain information verbally. IT are known for deleting evidence off servers. I printed it out instead and took backups. I am not going to be threatened and not have evidence to protect me. Others have placed information with their attorneys. Many of us have had enough. So some of us are now speaking out, justice department, anywhere giving evidence including emails. You will receive emails from other people all with corroborating evidence, but Mr Petit and his loyal seniors have gone too far. His law suits against some of our former coworkers is just the start. I have firsthand evidence he knows of the issues and the lengths he has instructed people to avoid credits that would have destroyed most quarter sales and todays announcement is the final straw. The large orders to distributors was the reason. Mr Petit was fully aware of the federal VA shelf stuffing in 2014 15 and 16. By fully, he had dialogue with a number of us and also tasked Lou Roselli and others with avoiding a massive credit to avkare that would have destroyed the company report figures (I have the exact emails). Mr Petit Sir, I urge you to stop these damaging actions against those that speak out internally. Its entirely consistent with your win at all costs format. Mr Petit Sir, I have emails I know you are aware of that show what is going on, you are included in some. Please stop lying. I would prefer it if you left, because maybe our jobs can be saved. I urge you to resign and ask for an audit, anything. The emails alone from the VA will show you are lying and you know of these emails personally and the problems with inventory at the VA and DOD facilities. Mr Petit knows the events about the revenue and the conduct of MM individuals is true including the distributors with obscene orders at the end of the quarters. I personally heard Mr Petit state he would destroy them and their families when speaking about employees. I and a few are now speaking out. I don’t want promotion, I don’t want a pay rise just not to live in fear and earn a living. When the subpoena arrived, not many in the company were aware until it was made public. However the company started changing a few things. Lexi was aware of this and had instructed other attorneys in  Parker Petit October 27, 2017 Page 4 the full knowledge MM are in trouble including suing the capitol forum. Senior management were certain the stock price would go up after issuing the legal claims against short sellers. Their only concern was the stock price. I reported my concerns to the regulator some time ago and do know they are investigating. I have protected status and do not wish to identify myself internally. It is guaranteed I will be fired. My naivety is I thought after the information myself and others filed with the regulators with telephone calls and emails they would arrest people. They have the evidence including VA emails about consignment stock and concerns about not ordering stock. That is not how it is done I’ve come to learn. I hoped the regulators who others and I reported things to would remove those ruining the company. There’s also an attempted cleanup operation going on but most people I know have printed out their emails. The company know the issues, Mr Roselli sent emails between June 2015 & Dec 2016 evidencing concerns and shelf stuffing well before my former colleagues were fired. Well before MM tried to ruin my coworker credentials. Lou I can prove stated. We were in a bad position, having to do consignment inventory checks. These emails included content about avkare noticing our federal inventory was way off. Avkare CEO involved that means our CEO is involved. If we cannot reconcile our federal inventory we cannot afford a credit. Many people read these emails, some still have hard copy including ex coworkers. Mr Petit is fully aware of the issues he had discussions with Avkare at the time. Please check the VA’s 100's of 7x7 shipped  2013 2014 2015 2016. Seattle and had stock on their shelves as well. The rep that worked that area was directed to. Yes they had serious concerns about certain VA. I was sent evidence that I have passed on to regulators that had massive inventory problems and physican clinics were complaining. I can vouch for a number of accounts having inventory on shelves of VA some that did not even use MM product. Drs were getting angry about us sending them stock / invoices, there’s a number of complaints I provided the names of the Drs to the regulators. Worse I can show inventory being on shelves still from 2013 14 15 16. Mr Petit knows about this, in one quarter alone there was $3M was shelving product to recognize sales when there was no sale. I can show other quarters with $2m+. I was not aware it was a false way, it was just keeping product on shelves. Since 2015 I know its false. The dates of these VA emails confirm what people have alleged about the sales practices, I personally have some and gave them to the regulators. I do not know what or how to define sales revenue but I do know working here the descriptions fit. I know there were many problems because of the sales practices towards the VA and Dept of Defense facilities. The VA sales are down as a result. In fact, how are we currently making sales. Internally we’re even confused its like orders are bypassing reps. Yes MM sales reps can’t work out why there is a need to bang our end of quarter shelf stacking if we’re so succes sful. Todays result was identical. If you do not have the emails please request them from the VA about consignment stock Mr Petit is threatening people that ask about them, his lawsuit against capitol forum was the start. He knows of the MM conduct at the VA he also has discussions with Mr Jerry Morrison directly about orders. People are being investigated because of MM rep conduct ordered by senior management. Those that know Bio healing will be wise to learn a new scheme was developed at MM that involves distributors. These distributors have no financial significance and serve one purpose all related in part to shelf stuffing and people earning extra off the sale.  At one stage they thought it was an internal employee telling short sellers. We want the company to at least survive not be ruined by them but sadly its mostly true what has been said. The shelf stuffing is real and distributor dr arrangements  As an employee and most employees knew avkare never had a rep in the VA. MM reps used Salesforce dot com to order any/all inventory for the VA's. VA volumes slowed significantly when consignment stock became an issue a big issue this presented new problems so llcs were formed by trusted staff Dr's got commission on the sales. This is when we heard about the shelf stuffing problems. It had been going on to my knowledge since 2012/13. Directions given to us by senior people. I have text messages to this as well. avkare never approved shipments it was all internal to
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks