Shareholders Group announces release of proxy materials for the replacement of the Board of Directors of Nerium Biotechnology, Inc.

-          The current Board of Directors and Management Team are destroying shareholder value
-          Shareholders are urged to vote for change by voting the YELLOW Proxy in support of the slate of new Directors proposed by the Shareholders Group

SAN ANTONIO, TX and TORONTO, June 8, 2017 /CNW/ - A group of shareholders (the "Shareholders Group") of Nerium Biotechnology, Inc. ("Nerium" or the "Company"), today released the Shareholders Group's proxy materials relating to the replacement of the current Board of Directors of the Company (the "Board") at the upcoming Annual General Meeting of Nerium Shareholders to be held on June 29, 2017.  The Shareholders Group encourages shareholders to support change at the Company by voting their YELLOW form of proxy (the "YELLOW Proxy") in support of the new directors proposed by the Shareholders Group (the "Shareholders' Nominees").

Management and the Board's Interests Are Not Aligned with Shareholders

Management and the Board have become entrenched and are engaged in a self-serving arrangement designed to benefit only themselves and other insiders.  Dennis Knocke, the Company's current Chairman and Chief Executive Officer, appointed the Board and, in turn, the Board ensures that Mr. Knocke keeps his job to the clear detriment of shareholders.

The members of the Shareholders Group own or control more than 2.3 million shares of the Company's stock, which is more than double the approximate 1.1 million shares owned by the current management ("Management") and Board combined.  Management and the Board's interests are not aligned with those of shareholders, as evidenced by the more than 1 million stock options that management and the Board have let expire and become worthless over the last several years. Conversely, the Shareholders Group is comprised of individual shareholders, like most of you, and believes in operating the Company solely for the benefit of its shareholders.

Critical Reasons to Replace Ineffective Board

The reasons for replacing the Board with the Shareholders' Nominees are numerous, and at a high level include that the current Management and Board have:

  • Implemented "strategies" that have, when comparing 2016 to 2015, resulted in:
    • 69% decline in revenue ($14.3 million vs. $45.8 million);
    • 53% increase in general and administrative expenses ($10.2 million vs. $6.7 million); and
    • 234% decline in operating profit (-$7.8 million vs. $6.8 million).
  • Depleted the Company's cash reserves to $6.99 million as of March 31, 2017, which, when considering that the Company lost $7.8 million from operations in 2016, puts the Company's survival at risk.

  • Failed to communicate with and provide regular updates and disclosure to shareholders over the course of the Company's ten years of existence. In fact, even though the Company could hold its Annual Shareholders Meeting in Texas, where the majority of its shareholders are located, the current Board and Management chose to do so in Toronto, Canada. This limits the chances of shareholders actually attending the meeting, and therefore discourages shareholder input.

  • Failed to meet their minimum legal disclosure requirements as it relates to material events. More specifically, the Company failed to fully disclose a potential $22.6 million liability. As a result, the Company, the Board and Management are now the subjects of both a shareholder oppression lawsuit and a complaint filed with the Ontario Securities Commission.

  • Failed to properly consider and disclose to shareholders a proposal to purchase certain assets of the Company for $100 million, or nearly $3 per share, in 2015. This potentially could have provided shareholders with much needed and desired liquidity. In fact, since 2012, the Board and Management have let well in excess of 1 million stock options expire and become worthless at exercise prices between $1.17 and $1.50. These actions stand in direct contrast to Management's claim that the proposal to acquire the Company for nearly $3 per share "UNDERVALUED" the Company.

  • Entered into an operating agreement with Nerium International, the Company's partner and only significant customer, which lacked even standard minority shareholder protections. This one sided agreement had little to no minority shareholder protections, which would be, at best, very difficult to enforce through litigation, which the Company commenced in 2015.

  • Rejected numerous business proposals as well as Nerium International, that likely would have saved the Company millions of dollars per year in costs and allowed it to focus on its true mission as a healthcare biotechnology company.

  • Initiated more than 70 legal actions around the world against Nerium International, the Company's partner and only source of revenue. Then, shockingly, engaged in a negative public relations campaign designed to destroy its partner, of which the Company owns a 30% interest. In the Shareholder Group's opinion, Management and the Board commenced this litigation without fully considering the consequences of their decision, including the cost and length of time typically associated with complex litigation, as well as the damage the litigation would do to the Company's business.

  • Caused the Company to take actions that have, in the Shareholder Group's opinion, placed the Company in clear breach of the operating agreement governing Nerium International by attempting to market products competitive to those exclusively licensed to NI, under the trademarked Nerium Brand, in Germany, Mexico and, most recently, the United States. These actions have potentially exposed the Company to millions of dollars in damages.

IT IS TIME FOR CHANGE. VOTE THE YELLOW PROXY TODAY.


The Shareholders Group believes the Company can be saved and has provided a detailed plan to accomplish their singular goal of implementing strategies that will increase shareholder value.  The nominees proposed by the Shareholders Group include new, qualified individuals with broad business experience in science, finance and law, as well as a track record of success in restructuring companies and returning value to shareholders. The six nominated highly experienced directors to replace the current, ineffective Board are Brad J. Buscher, Randal R. Whitaker, DeeDee Drays, J. Louis Kovach, Murray Nye and Fred Beruschi, collectively the Shareholders' Nominees.

Detailed information regarding the Shareholders' Nominees and the Shareholders Group's plans regarding the future management of the Company can be found in the Shareholders Group proxy materials.

Shareholders Group's Proxy Circular

Further information relating to the Shareholders' Nominees and other important information on voting is set out in the Shareholders Group's proxy circular (the "Shareholders Group Circular") mailed to shareholders of the Company. The materials have also been filed on SEDAR at www.sedar.com. A copy of the materials can also be requested by contacting the Shareholders Group's proxy solicitation agent, Laurel Hill Advisory Group, at the contact details provided below.

The Shareholders Group urges you to review the Shareholders Group Circular and vote the YELLOW Proxy, accompanying the Shareholders Group Circular. Your support is important for the future of your investment in the Company.  

How to Vote 

Due to the essence of time, shareholders are encouraged to vote by scanning and emailing or faxing their YELLOW Proxy as set out in the Shareholders Group Circular and voting materials. DO NOT use the proxy provided by Management. Shareholders are urged to discard that proxy and follow the instructions on the YELLOW Proxy, and submit it by June 27, 2017 at 8:00 AM (Eastern Time) in order to ensure that your vote for change is counted at the meeting. 

If you have already voted using Management's proxy form but wish to support the Shareholders Group, simply vote using the YELLOW Proxy. A later dated YELLOW Proxy will supersede a previously submitted vote. 

Shareholders who require assistance with voting or have questions should immediately contact Laurel Hill Advisory Group at 1-877-452-7184 toll-free (416-304-0211 collect), or by email at assistance@laurelhill.com

About the Shareholders Group

The Shareholders Group is comprised of a number of shareholders of Nerium Biotechnology, Inc. who collectively own or control more than 2.3 million shares of the Company's common stock.  The Shareholders Group was formed in June of 2016 for the sole purpose of removing the Company's current management team and replacing them with individuals who will act in accordance with their fiduciary duty to the Company and its shareholders.

Proxy Solicitation

Proxies for the meeting will be solicited by or on behalf of the Shareholders Group pursuant to the Shareholders Groups Circular. Proxies may be solicited by mail, telephone or other electronic means, as well as by way of public broadcast, including press release, speech or publication and any other manner permitted under applicable law. The Shareholders Group has retained Stikeman Elliott LLP as their legal advisor and Laurel Hill Advisory Group as their proxy solicitation agent. 

Proxies are being solicited and the Shareholders Group's Circular is being provided by and on behalf of the Shareholders Group, in its members' capacity as shareholders, and is NOT being provided by or on behalf of the Board or Management of the Corporation. 

Except as otherwise disclosed in the Shareholders Group's Circular or any documents referenced therein, to the knowledge of the Shareholders Group, none of the Shareholder Nominees or any of their associates or affiliates has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting. 

Further Information or Assistance

For more information or if you require assistance with voting, please contact the proxy solicitation agent for the Shareholders Group: 

Laurel Hill Advisory Group

North America Toll Free:  1-877-452-7184
Collect Calls Outside North America: 1-416-304-0211
Email:  assistance@laurelhill.com

SOURCE The Shareholders Group of Nerium

For further information: Laurel Hill Advisory Group, North America Toll Free: 1-877-452-7184, Collect Calls Outside North America: 1-416-304-0211, Email: assistance@laurelhill.com

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The Shareholders Group of Nerium

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