B.O.D. decision to file for voluntary bankruptcy

by | Jun 20, 2023 | SQI Memos

To:          Gerry Connor

cc.           W. Matthews, C. Beddoe, C. Ricks, E. Zwisler

From:    Michael Markowski

Re:          B.O.D. decision to file for voluntary bankruptcy

Date:     June 20, 2023

After SQI announced its intention to file a voluntary bankruptcy on 6/16/23, I conducted my research.  L learned from the CEO of Pivot Financial, Dan Flaro on 6/19/23 that Pivot has been and continues to be interested to convert all of its outstanding debt into equity. 

You are aware that I produced and published a research report on SQI on March 30, 2023.   You are aware of the following:

  1. I have offered to help the company and that I have large investor contacts. You were forwarded an email that I sent Looking Glass Capital, SQI’s largest outside shareholder on 6/15/23.  They provided me with your contact information.  The email was about one of my contacts attempting to purchase 5 million shares of SQIDF.  
  2. Looking Glass has an investor who is interested to invest $1,000,000.

Based on my findings, the only logical conclusion is that the decision by the Board for SQI to file for voluntary bankruptcy was made for the best interest of the three members of the Board who are also secured lenders.  Filing a voluntary bankruptcy will result in the three members of the board of directors who constitute a majority of the five-member board to continue to have a significant stake in SQI’s products and intellectual property.  It’s because they also a significant portion of the debt. 

The majority of SQI’s secured lender directors utilized the “notice of intention to enforce security” (“notice”) received by SQI from Pivot Financial as their rationale for the decision for SQI to file a voluntary bankruptcy petition.  The bankruptcy filing will result in the shares of SQI to instantly become worthless.  It will also wipe out the severance that is due to the key employees who were recently terminated.   

Should SQI continue on with the voluntary bankruptcy filing my plan will be to:

  • Produce and publish a research report that will provide details of the Board of Directors self-serving-decision. My report will be published and sent to my contact at the Wall Street Journal.  Her specialty is writing scathing articles on the world’s most prominent individuals in business.  See “Copying Peter Lynch, Investors Bought a Stock, Watched It Tank”, Wall Street Journal, 10/14/2004. 
  • Assist my crowd of contacts who are shareholders to file a class action lawsuit against the three members of the Board of Directors who are conflicted.

The majority of SQI’s board of directors being exclusively in Canada’s investments industry and collectively holding the majority of its shares was the only reason why I made the following statements in my March 30, 2023 report:

  • SQI has the best risk reward ratio of any stock that I have ever recommended throughout my 46-year career”.
  • “Three of Canada’s most prominent professional investors, who are members of SQI’s Board of Directors, together hold 75.4% of SQI’s shares, 86.2% of its outstanding warrants and a majority of its debt.  Because of its all-star investors SQI will not fail.”
  • “When SQI is successful from becoming significantly profitable and reaching a billion-dollar valuation each of the three will have:
        • Established or added to their legacies- SQI is a “change and improve the world” project.  
        • Protected or enhanced their reputations- A failure for any company in which they are board member would hurt their reputation.  
        • Increased their net worths by at least $174 million”
  • “Thus, these whales provide an extremely rare opportunity for suckerfish or whalesuckers to have a free ride on their backs (purchase shares in open market near all-time low)to make approximately 20 times their investment. 

My declaration that SQI represented the best investment opportunity throughout my career was because the three board members, based on their positions and stellar careers were above reproach.  Each are very prominent leaders of Canada’s investment industry.  Each are well aware that investors base their investment decisions and amounts to invest on the track record of those who are the fiduciaries of a company, etc.  That they are directors of a publicly held company distinguishes them even more from those who do not have track records, especially in the investments industries.   Board members because of their prominence and visibility in the investments industry must adhere to the highest ethical standards.

Since the majority of SQI Diagnostics Board members have provided secured loans to the company the outside shareholders have no representation.  The following must be immediately ratified by the existing Board of Directors:

  1. Cease all activity to file a voluntary bankruptcy petition
  2. Issue a press release, “based on new developments, the decision to file for a voluntary bankruptcy has not been finalized. SQI remains in discussions with Pivot”.        
  3. elect Dr. David Weill, Deborah Picou Markowski and David Markowski to the Board of Directors

Upon the three new directors being elected  two of the three existing and conflicted directors, Connor, Beddoe and Matthews, must resign.