A bankrupt Chesterfield biotech company has ousted its chairman after he tried to organize a mini coup.
Commonwealth Biotechnologies Inc. said late Tuesday that its board of directors voted Friday night to remove Bill Guo from his position as director after he filed a series of unauthorized communications on the company’s behalf with the Securities and Exchange Commission.
Commonwealth’s CEO still isn’t sure how Guo slipped those documents past the board to the SEC.
BizSense first reported on Guo’s attempts to gain control of the company’s board by asking the publicly traded firm’s shareholders to vote in an online meeting. Guo wanted to become the company’s lone director so he could carry out a plan he had devised to retain some value for its shares.
(You can read the original BizSense report here.)
But it turns out those SEC filings, which also included allegations against CBI’s CEO, weren’t approved by the company’s board of directors.
“The filings were replete with factual errors, misleading comments and baseless allegations,” CBI said in its release. “As a result, Mr. Guo has been removed from the board of directors as chairman and as a director.”
CBI said its board demanded that Guo retract his comments and inform the SEC of what was happening. But he apparently declined to do so, CBI said.
Guo lives and works in China and is still one of the company’s largest shareholders. His company, VenturePharm Lab in Beijing, owns around 26 percent of CBI’s stock or about 2.6 million shares, according to bankruptcy and SEC filings.
Those shares aren’t worth much these days. CBI’s shares are listed for just pennies apiece and rarely trade on the Over the Counter Pink Sheets market.
There’s not much left of the company, either.
According to bankruptcy filings, it listed $6.9 million in assets and $4.9 million in debt. CBI’s business these days consists solely of its real estate, a 32,000-square-foot industrial building on Biotech Drive in Midlothian, and the stock it owns in an Australian R&D firm called Mimotopes.
The real estate accounts for $5.9 million of its reported assets.
For the past several months, CBI has been working through a plan to sell off those assets.
The building, which is occupied by tenant Bostwick Laboratories, has been for sale for a couple of years. CBI said it had an offer for a party to purchase its shares of the Australian firm for the stock for $950,000.
Guo’s plan was to prevent what he thought is an attempted fire sale of those assets.
Its SEC filings show the company lost nearly $15 million between 2007 and 2009 and that it lost almost half a million through the first half of 2010. It had $4.7 million in income in 2009. That dropped to $612,850 in 2010.
Richard Freer, CBI’s CEO, who Guo claimed does not have the experience to run the company in its current state, spoke to BizSense by phone.
He wouldn’t say much more than what the company issued in its press release.
Though there are no specific answers, Freer did address how Guo managed to slip these unauthorized filings past the board and through the SEC.
“We’re still trying to figure out a lot of stuff as to how this sort of thing happened,” Freer said.
The company said it is putting safeguards in place to ensure it does not happen again.
Guo in his letters also wanted to Freer to retract claims that he is owed money by CBI.
According to CBI’s bankruptcy filings, Freer is listed among dozens of other creditors. Freer is asking for $52,000 in restricted stock earned but not issued and $94,000 in wages earned but not paid.
Freer, a PhD, scientist and former professor at VCU, was paid a total of $61,811 between Jan. 1, 2010, and July 30, 2010, according to the bankruptcy documents. Freer’s past total compensation packages were routinely in the six figures prior to 2010, though those figures included the value of stock awards which have since been drastically diminished.
CBI today operates out of a small office in Midlothian. Freer said CBI now has one employee in addition to himself and is using the services of a consultant. Bankruptcy filings show estimated monthly expenses of around $50,000.
Guo had hoped to reduce monthly expenses to no more than $7,500 per month.
Freer did say that CBI will continue to pursue its previously disclosed plan to sell off its remaining assets and become a debt free publicly traded shell company. From there it would look to be part of a reverse merger whereby another firm looking to go public could take over CBI’s public status on the quick and cheap.
“That’s currently where we’re heading,” Freer confirmed.
Andrew Chien of Connecticut, who was hired by Guo to manage the shareholder meeting, said the meeting would still take place despite Guo being ousted.
Guo has said he is covering all the costs for the meeting.
CBI’s other creditors listed in the bankruptcy filings include:
• $2.4 million to BB&T
• $622,000 to Fornova Pharmaworld of China
• $90,000 to a Lovelace Laboratories in New Mexico
• $75,000 to the Royal Bahamas Police Force
• $63,000 to Applied Biosystem in Chicago
• $25,000 to James Brenner of Richmond
• $23,000 to Chesterfield County Treasurer
• $10,000 to Dominion Power
• $9,000 to Brandywine Realty Trust
Michael Schwartz is a BizSense reporter. Please send news tips to [email protected].
A bankrupt Chesterfield biotech company has ousted its chairman after he tried to organize a mini coup.
Commonwealth Biotechnologies Inc. said late Tuesday that its board of directors voted Friday night to remove Bill Guo from his position as director after he filed a series of unauthorized communications on the company’s behalf with the Securities and Exchange Commission.
Commonwealth’s CEO still isn’t sure how Guo slipped those documents past the board to the SEC.
BizSense first reported on Guo’s attempts to gain control of the company’s board by asking the publicly traded firm’s shareholders to vote in an online meeting. Guo wanted to become the company’s lone director so he could carry out a plan he had devised to retain some value for its shares.
(You can read the original BizSense report here.)
But it turns out those SEC filings, which also included allegations against CBI’s CEO, weren’t approved by the company’s board of directors.
“The filings were replete with factual errors, misleading comments and baseless allegations,” CBI said in its release. “As a result, Mr. Guo has been removed from the board of directors as chairman and as a director.”
CBI said its board demanded that Guo retract his comments and inform the SEC of what was happening. But he apparently declined to do so, CBI said.
Guo lives and works in China and is still one of the company’s largest shareholders. His company, VenturePharm Lab in Beijing, owns around 26 percent of CBI’s stock or about 2.6 million shares, according to bankruptcy and SEC filings.
Those shares aren’t worth much these days. CBI’s shares are listed for just pennies apiece and rarely trade on the Over the Counter Pink Sheets market.
There’s not much left of the company, either.
According to bankruptcy filings, it listed $6.9 million in assets and $4.9 million in debt. CBI’s business these days consists solely of its real estate, a 32,000-square-foot industrial building on Biotech Drive in Midlothian, and the stock it owns in an Australian R&D firm called Mimotopes.
The real estate accounts for $5.9 million of its reported assets.
For the past several months, CBI has been working through a plan to sell off those assets.
The building, which is occupied by tenant Bostwick Laboratories, has been for sale for a couple of years. CBI said it had an offer for a party to purchase its shares of the Australian firm for the stock for $950,000.
Guo’s plan was to prevent what he thought is an attempted fire sale of those assets.
Its SEC filings show the company lost nearly $15 million between 2007 and 2009 and that it lost almost half a million through the first half of 2010. It had $4.7 million in income in 2009. That dropped to $612,850 in 2010.
Richard Freer, CBI’s CEO, who Guo claimed does not have the experience to run the company in its current state, spoke to BizSense by phone.
He wouldn’t say much more than what the company issued in its press release.
Though there are no specific answers, Freer did address how Guo managed to slip these unauthorized filings past the board and through the SEC.
“We’re still trying to figure out a lot of stuff as to how this sort of thing happened,” Freer said.
The company said it is putting safeguards in place to ensure it does not happen again.
Guo in his letters also wanted to Freer to retract claims that he is owed money by CBI.
According to CBI’s bankruptcy filings, Freer is listed among dozens of other creditors. Freer is asking for $52,000 in restricted stock earned but not issued and $94,000 in wages earned but not paid.
Freer, a PhD, scientist and former professor at VCU, was paid a total of $61,811 between Jan. 1, 2010, and July 30, 2010, according to the bankruptcy documents. Freer’s past total compensation packages were routinely in the six figures prior to 2010, though those figures included the value of stock awards which have since been drastically diminished.
CBI today operates out of a small office in Midlothian. Freer said CBI now has one employee in addition to himself and is using the services of a consultant. Bankruptcy filings show estimated monthly expenses of around $50,000.
Guo had hoped to reduce monthly expenses to no more than $7,500 per month.
Freer did say that CBI will continue to pursue its previously disclosed plan to sell off its remaining assets and become a debt free publicly traded shell company. From there it would look to be part of a reverse merger whereby another firm looking to go public could take over CBI’s public status on the quick and cheap.
“That’s currently where we’re heading,” Freer confirmed.
Andrew Chien of Connecticut, who was hired by Guo to manage the shareholder meeting, said the meeting would still take place despite Guo being ousted.
Guo has said he is covering all the costs for the meeting.
CBI’s other creditors listed in the bankruptcy filings include:
• $2.4 million to BB&T
• $622,000 to Fornova Pharmaworld of China
• $90,000 to a Lovelace Laboratories in New Mexico
• $75,000 to the Royal Bahamas Police Force
• $63,000 to Applied Biosystem in Chicago
• $25,000 to James Brenner of Richmond
• $23,000 to Chesterfield County Treasurer
• $10,000 to Dominion Power
• $9,000 to Brandywine Realty Trust
Michael Schwartz is a BizSense reporter. Please send news tips to [email protected].
Why do they owe $75,000 to the Royal Bahamas Police Force?
If I were a shareholder I would be very upset about this claim.