SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.__)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Hemagen Diagnostics, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Jerry L. Ruyan, William P. Hales, Thomas A. Donelan, Christopher P. Hendy
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(14) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identity the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
THE REDWOOD GROUP
9468 Montgomery Road
Cincinnati, OH 45242
800-205-0407
August 11, 1999
Dear Fellow Hemagen Stockholders:
Our original statement in our consent solicitation material of July 20,
1999 contained an error as to the number of shares as to which we can execute
consents. The figure as originally given included warrants which were not
exercised for shares prior to the record date of June 29 and 5,000 shares
purchased after that record date. Accordingly, we intend to execute consents for
the 557,627 shares of common stock we owned at the record date in favor of all
proposals. As a result, written consents by owners of an additional 3,268,318
shares or 42.7% of the shares not owned by us, will be required to adopt and
approve each of the proposals. Under the Bylaw amendment purportedly approved by
the Board of Directors on July 2, 1999, the affirmative vote of 5,101,260 shares
(including 4,543,633 or 59.4% of the shares not known by us) will be necessary
to effect the proposals.
References have been made to statements made by us to the effect that
Hemagen had refused an offer involving the sale of the Company which would have
paid stockholders $2.50 per share. We had made this statement on the basis of
information provided to us by a stockholder of Hemagen who told us that he was
on the due diligence team of a company that, according to this stockholder,
would have resulted in such an acquisition of Hemagen. We have to date been
unable to obtain any other independent information concerning this alleged
offer, or to confirm that any of the statements made to us and then to Hemagen
shareholders are true.
We also wish to clarify our correspondence of August 3 as follows:
We believe you need only read Hemagen's response to our Consent Solicitation of
July 20, 1999, to know that the current management and directors couldn't care
less about the long suffering stockholders! We believe it is apparent that they
only care about the jobs of their four family members and lining their cronies'
pockets.
CHANGE WILL ONLY OCCUR IF YOU VOTE THE WHITE CARD!
If you want more red ink, more excuses, nepotism, and think it is acceptable
that four out of the five top executive positions are filled with members of the
Franzblau family -- who appear to have no business experience other than with
Hemagen . . . then do nothing and don't complain when your Hemagen stock goes
down.
If you want to allow the string of bad acquisitions, losses, and
underperformance to continue, and what we think is a "rubber stamp board" to
run roughshod over the stockholders . . . then do nothing and don't complain!
<PAGE>
If you want to allow Carl Franzblau who has repeatedly promised earnings but has
delivered losses resulting in an accumulated deficit today of $3.4 million
dollars since becoming a public company 6 years ago to continue . . . then do
nothing and don't complain!
Carl Franzblau, Chairman, President and CEO of Hemagen is also, according to
Hemagen's revocation materials, a Professor and Chairman of the Biochemistry
Department and Associate Dean for Graduate Affairs at the Boston University
School of Medicine.. Did you ever wonder which job takes precedence? We all know
the answer . . . it is obvious from Hemagen's financial performance. If you are
happy with the financial performance of your company, its stock price, and with
the fact that the company you invested in is run by a President and CEO with
other outside interests presumably demanding his time and attention . . . then
do nothing and don't complain!
HEMAGEN STOCKHOLDERS NEED AND DESERVE FULL-TIME PROFESSIONAL
MANAGEMENT WHO ARE COMMITTED TO SUCCESSFULLY OPERATING THE
COMPANY AND BUILDING STOCKHOLDER VALUE!
Jerry L. Ruyan, is a founder and former CEO of Meridian Diagnostics, Inc.,
("KITS" on the NASDAQ), who steered Meridian's growth from $0 to over $30
million in revenues and $140 million in stockholder value driven by 19
consecutive years of profits under his leadership. William Hales is a CPA and
Investment Banker who spent six years in Big Six accounting firms and the last
seven years in the investment banking field. Both of these individuals are
highly capable and possess the skills necessary to fix Hemagen. If you want
proven experienced business professionals . . . THEN VOTE THE WHITE CARD FOR THE
REDWOOD GROUP.
If you want us to assemble a management team capable of designing, implementing
and delivering a model for successfully operating a profitable diagnostics
company with extraordinary results like Meridian . . . THEN VOTE THE WHITE CARD
FOR THE REDWOOD GROUP AND LET US BEGIN TO FIX HEMAGEN!
<PAGE>
VOTE THE WHITE CARD TO END NEPOTISM!
If you want us to recruit the best and brightest industry professionals to make
Hemagen succeed and you want the reign of NEPOTISM to end . . . THEN VOTE THE
WHITE CARD FOR THE REDWOOD GROUP.
We believe NEPOTISM in any public company can destroy morale, create conflicts
and eliminate checks and balances within an organization. It can produce and
promote cover-ups and excuses. Could you fire your wife, son, or son-in-law if
they weren't performing? Are the Franzblaus -- with their business experience
apparently limited to Hemagen really entitled to the positions, salaries and
benefits which they enjoy? Hemagen's Chief Financial Officer, William Franzblau,
whose compensation is $113,300, is not even described as an accountant in
Hemagen's consent materials, and furthermore the Company does not list any other
financial reporting experience for him! Hemagen does not describe any prior
diagnostics experience in its materials for its top sales and marketing
executive, Scott Weiss, (Carl Franzblau's son-in-law), whose compensation is
$113,500. We ask Hemagen's stockholders to decide -- are these the best
qualified people for the job? Is there a conflict of interest with Carl
Franzblau on the Compensation Committee which determines the salaries for his
family members? Is there any potential conflict with the Chairman's son, William
Franzblau and wife, Myrna Franzblau, controlling the financial and treasury
function, respectively? WE ALL KNOW THE ANSWER! TELL THEM BY VOTING THE WHITE
CARD!
The Franzblau's reaction to our Consent Solicitation was predictable. We believe
that they bulldozed the board into changing the company's Bylaws thereby denying
the right of a simple majority of shares to determine who would manage your
company.
We believe that Hemagen has been run by the seat of its pants since its
inception. Since 1993, current management has continuously tried to re-invent
themselves, each time with a new acquisition that they promise will be the "key
to the future". As in the acquisition of Cellular Products, management obviously
failed to capitalize on the opportunity. Each time the stockholders get a new
spin! At the most recent annual stockholders meeting we were told that the
latest acquisition, the "ANALYST" is the "sleeper of the century" to quote your
Chairman, President and CEO, and a Professor and Chairman of the Biochemistry
Department and Associate Dean of Graduate Affairs at the Boston University
School of Medicine. This management group has used $15 million of public capital
raised in offerings in 1993, 1995 and 1996 and $5 million in debt only to end up
with an accumulated deficit of $3.4 million. With the four Franzblau family
members who pervade upper management of our company it is obvious that no amount
of money can make this current management succeed.
<PAGE>
LET US SET THE RECORD STRAIGHT
Hemagen's management would have you believe that if you vote with the Redwood
Group to remove and replace the current "RUBBER STAMP" directors, that you will
give the Redwood Group 15% of Hemagen for Free! THIS IS NOT TRUE! AS ALWAYS,
WHEN THE FRANZBLAUS SPEAK -- YOU MUST READ BETWEEN THE LINES!
We are not receiving any stock for free. When we are successful, we will have to
pay close to $2.4 million dollars to the company to exercise our options. That
is 33 1/3% more than we can purchase the stock for today in the open market.
THAT IS NOT FOR FREE! Furthermore, we have agreed not to exercise our option for
a period of eighteen months or until the stock trades above $5 for 20
consecutive days or unless there is a further change in control.
OUR OPTION IS PERFORMANCE BASED
IF WE CAN'T MAKE YOUR INVESTMENT APPRECIATE, OUR OPTION WILL BE WORTHLESS.
UNLIKE THE CURRENT BOARD AND MANAGEMENT, WE ARE ALIGNED WITH YOU. IF YOU MAKE
MONEY -- WE MAKE MONEY.
As your stock languishes and the company keeps losing money, the Franzblaus keep
getting paid, and the stockholder's value keeps eroding. ALIGN YOUR INTEREST
WITH OUR'S, VOTE THE WHITE CARD FOR THE REDWOOD GROUP TODAY!!!
Sincerely,
Jerry L. Ruyan William P. Hales Thomas A. Donelan Christopher P. Hendy
<PAGE>
YOUR VOTE IS EXTREMELY IMPORTANT
1. Please SIGN, MARK, DATE and MAIL you WHITE consent card in the
enclosed postage-paid envelope. If you wish to vote for our Nominees
and proposals, you must submit the enclosed WHITE proxy card and must
NOT submit Hemagen's blue card.
2. If you have already voted Hemagen's blue card, you have every legal
right to change your mind and vote FOR our Nominees and proposals on
the WHITE consent card. Only your latest dated consent card will
count.
3. If your shares are held for you by a bank or brokerage firm, only your
bank or broker can vote your shares and only after receiving your
instructions. Please sign, date and return the enclosed WHITE consent
card in the envelope provided or call your bank or broke and instruct
your representative to vote FOR our Nominees and proposals on the
WHITE consent card.
4. Time is Short. Please vote today!
If you have any questions or need assistance in voting your shares or in
changing your vote, please contact Beacon Hill Partners, Inc. at the toll free
number listed below.
BEACON HILL PARTNERS
90 Broad Street
New York, New York 10004
(212) 843-8500 (call Collect)
or Call toll-free (800) 755-5001
