Maguire Asset Management, LLC, Francis Capital Management, LLC and Foxhill Opportunity Fund, L.P., together with the other members of iPass Shareholders for Change, intend to make a preliminary filing with the Securities and Exchange Commission of a proxy statement and an accompanying proxy card to be used to solicit votes for the election of a slate of director nominees at the 2015 annual meeting of stockholders of iPass Inc.
On April 16, 2015, iPass Shareholders for Change issued the following press release:
GROUP OF CONCERNED IPASS INC. SHAREHOLDERS COMBINE TO FORM “IPASS SHAREHOLDERS FOR CHANGE”
Issues Open Letter to iPass Shareholders
Expresses Profound Disappointment with the Current Board’s Apparent Failure to Protect and Enhance Shareholder Value
Has Attempted to Engage Constructively with iPass’ Board of Directors, But to No Avail
Seeks to Reconstitute iPass’ Board at the Upcoming 2015 Annual Meeting with Five Highly Qualified Director Candidates Who Have Strong, Relevant Backgrounds
LAGUNA BEACH, Calif., April 16, 2015 -- A group of iPass Inc. (NASDAQ: IPAS) (“iPass” or the “Company”) investors, led by Maguire Asset Management, Francis Capital Management, and Foxhill Opportunity Fund, who collectively own approximately 7.7% of iPass’ shares outstanding, announced today that they have combined to form “iPass Shareholders for Change” and that they will be seeking to reconstitute the Board of Directors of iPass (the “Board”) at the Company’s upcoming 2015 Annual Meeting, which is expected to be held in June. iPass Shareholders for Change also announced today that it has issued an open letter to iPass shareholders in which the group, among other things, details how certain of its members have attempted for many years to work constructively with the Board to improve the Company’s performance and governance, enhance value and restore investor confidence, but to no avail. Also in the letter, the investor group expresses its profound disappointment with the failure of leadership at iPass under the current Board, and the group’s belief that new leadership is not only warranted at iPass, but long overdue. To that end, iPass Shareholders for Change expects to file later today preliminary proxy materials with the Securities and Exchange Commission for the election of five new, highly-qualified director nominees at the 2015 Annual Meeting. iPass Shareholders for Change’s director nominees are Richard A. Karp, Brent S. Morrison, Damien J. Park, Norman J. Rice, III and Kenneth H. Traub. Bios for each of the director nominees are included in the letter below.
The full text of the letter:
Open Letter to iPass Shareholders
April 16, 2015
Dear Fellow iPass Shareholder:
We are a group of concerned investors of iPass Inc. (“iPass” or the “Company”) who have organized as iPass Shareholders for Change. We collectively own an aggregate of 5,090,221 shares of common stock of iPass, constituting approximately 7.7% of the Company’s shares outstanding. Over the past seven years certain members of our investment group have attempted to maintain a constructive and cordial relationship with the Company’s management and members of the Board of Directors (the “Board”) with the hope that our value improvement recommendations would be taken seriously and implemented for the benefit of all shareholders. The dialogue has covered many issues and serious concerns regarding, among other things, the Company’s business strategy, underperformance, strategic alternatives review process, poor capital allocation decisions, executive compensation, bloated expenses, and poor corporate governance practices, all for the purpose of helping to fundamentally improve the business.
We are writing today to express our profound disappointment with the outcome of this engagement and with the current Board’s apparent failure to protect and enhance shareholder value. Simply put, we believe that the problematic status quo and troubling underperformance at iPass is largely a result of a failure of the Board and that new leadership is not only warranted, but long overdue.
To that end, we expect to file later today preliminary proxy materials with the Securities and Exchange Commission in connection with our efforts to solicit your support to elect five new, highly-qualified director nominees to the Board at iPass’ 2015 Annual Meeting, which is expected to take place in early June.
Despite the multiple-failed attempts to sell the business since 2008, continually falling short of executing several different business plans, the ongoing operating losses and the alarming cash depletion, we remain confident that under the right leadership and direction iPass can generate significant value for shareholders. As the world’s largest commercial WiFi network with over 18 million access points across 120 countries, we believe iPass is a valuable yet underappreciated business supported by a dedicated group of exceptional employees. However, we believe the market will continue to apply a significant discount to iPass’ market value until investor confidence is fully restored.
In our opinion, the most effective way to enhance shareholder value and to restore investor confidence is by immediately reconstituting the Board with these five seasoned, professional business leaders who have deep, relevant operational and industry experience. If elected, our nominees will bring a fresh perspective into the boardroom, undergo a thorough examination of the recently abandoned strategic alternatives review, act as advocates for all shareholders, and ensure that management is compensated appropriately and ultimately held accountable for its performance.
iPass Shareholders for Change’s Highly Qualified Nominees:
Richard Karp is a cost-conscious, savvy business professional with extensive operating experience at numerous technology companies. Mr. Karp received a B.S. degree in science from the California Institute of Technology, a M.S. degree in mathematics from the University of Wisconsin, and a Ph.D. in computer science from Stanford University. Subsequent to this, Mr. Karp managed several private and publicly-traded companies, including Catapult Communications, a manufacturer of telecom test equipment, which he founded in 1985 and took through its IPO before it was sold to Ixia in 2009 for $105 million. Mr. Karp recently served as a director of Novatel Wireless, Inc., a leader in the design and development of MiFi technologies and M2M wireless solutions for the Internet of Things.
Brent S. Morrison is an experienced wireless technology investor. Mr. Morrison is currently the Managing Director of Zuma Capital Management (ZCM), an investment vehicle focused on the technology industry. Prior to ZCM, Mr. Morrison held several investment and financial consulting positions including Senior Research Analyst at the Strome Group, Research Analyst at Clocktower Capital, LLC, a global long/short equity hedge fund, and Vice President of Wilshire Associates, a financial consulting film. Mr. Morrison also serves as a director of AdCare Health Systems, Inc., a leading long-term care provider where he is a member of the Audit Committee. Mr. Morrison received an MBA from the University of California at Los Angeles, with an emphasis in Finance and International Business, and a B.A. in Finance from the University of Colorado at Denver. Mr. Morrison is a Chartered Financial Analyst.
Damien Park is a leading senior advisor to public company boards, special board committees, CEOs and several investment funds on issues relating to shareholder-led value improvement initiatives. Mr. Park has been the Managing Partner of Hedge Fund Solutions, LLC since its formation in 2004 and President and CEO of Hibernian Partners, a strategy consulting firm, since 1998. Mr. Park is Co-Chairman of The Conference Board’s Expert Committee on Shareholder Activism and he is often quoted in leading business publications, and frequently speaks at top business schools and professional conferences contributing his perspective on issues regarding hedge fund activism, corporate governance reform, effective stakeholder communications and shareholder value improvement initiatives. Mr. Park serves as a director of Deer Valley Corporation, a manufacturer of factory built homes, where he serves on the Audit Committee. Mr. Park earned a B.S. from Delaware Valley College and an MBA from Trinity College in Dublin, Ireland.
Norman Rice is a seasoned operating executive, investor and senior advisor within the technology sector. Over his distinguished career Mr. Rice has been a senior executive with several leading technology companies, including the Communications, Media and Entertainment (CME) Vertical Business Unit of CA, Inc. (CA), the Aprisma Management Technologies Business Unit of Concord Communications, Inc., a provider of network service management software solutions (before its sale to CA), Aprisma Management Technologies, Inc., a company that provided Network assurance solutions (before its sale to Concord Communications), and HoustonStreet Exchange, Inc., a subsidiary of BayCorp Holdings, Ltd. Mr. Rice previously served as a director of Nitro Security Inc. (n/k/a McAfee, Inc.), a then leading provider of security information and event management (SIEM) solutions that provides complete visibility and situational awareness to protect critical information and infrastructure. Mr. Rice also currently serves as a director of DSP Group, Inc. (DSP Group), a leading global provider of wireless chipset solutions for converged communications, where he also serves as a member of the Audit and Strategy Committees. Mr. Rice holds Masters Degrees in Engineering and Management from Dartmouth College and a Bachelor of Science from the University of Michigan.
Ken Traub is a well-respected, proven business leader with decades of experience operating and investing in technology companies worldwide. Mr. Traub previously served as a director of iPass Inc. pursuant to a settlement agreement with Foxhill Opportunity, L.P. from June 2009 to June 2013. Mr. Traub is currently the President and Chief Executive Officer of Ethos Management LLC, which specializes in investing in and advising companies to execute strategies to build and unlock stockholder value. Previously, Mr. Traub was the President and CEO of American Bank Note Holographics, Inc. (ABNH), a leading global supplier of optical security devices. During his tenure with ABNH, Mr. Traub managed the turnaround, growth and sale of the Company to JDS Uniphase Corp. Following the sale of ABNH, he served as Vice President of JDSU, a global leader in optical technologies and telecommunications. Prior to ABNH, Mr. Traub co-founded Voxware, Inc., a pioneer in Voice over Internet Protocol communication technologies. Mr. Traub currently serves on the boards of directors of the following SEC reporting companies: (i) Vitesse Semiconductor Corporation, a leading supplier of integrated circuit solutions for next-generation carrier and enterprise networks, (ii) MRV Communications, Inc., a leading provider of optical communications network equipment and network integration, where he serves as Chairman of the Board, (iii) DSP Group, (iv) Athersys, Inc., a biotechnology company engaged in the discovery and development of therapeutic product candidates, and (v) A. M. Castle & Co., a global distributor of specialty metal and plastic products and supply chain services. Mr. Traub previously served on the boards of directors of the following companies, all of which were sold for a significant premium: (i) Phoenix Technologies Ltd., a supplier of the basic input output system for the personal computer industry, (ii) MIPS Technologies, Inc., a leading provider of industry standard processor architectures and cores, and (iii) Xyratex Limited, a leading supplier of data storage technologies. Mr. Traub received a BA from Emory College and an MBA from Harvard Business School.
Following the filing of our definitive proxy materials, we will be sharing more information with you regarding our plans for the Company and our strategy to unlock substantial value for the benefit of all iPass shareholders. As representatives of one of the largest shareholdings in iPass, our interests are directly aligned with yours and we look forward to communicating with you throughout this process.
Sincerely,
iPass Shareholders for Change
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Maguire Asset Management, LLC, Francis Capital Management, LLC and Foxhill Opportunity Fund, L.P., together with the other members of iPass Shareholders for Change and the participants named herein, intend to file a preliminary proxy statement and accompanying proxy card with the Securities and Exchange Commission ("SEC") to be used to solicit votes for the election of its slate of director nominees at the 2015 annual meeting of stockholders of iPass Inc., a Delaware corporation (the "Company").
IPASS SHAREHOLDERS FOR CHANGE STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.
The participants in the proxy solicitation are Catalysis Partners, LLC (“Catalysis Partners”), Catalysis Offshore Ltd. (“Catalysis Offshore”), Francis Capital Management, LLC (“Francis Capital Management”), John P. Francis, Foxhill Opportunity Fund, L.P. (“Foxhill Opportunity”), Foxhill Capital (GP), LLC (“Foxhill GP”), Foxhill Capital Partners, LLC (“Foxhill Capital”), Neil Weiner, Maguire Financial, LP (“Maguire Financial”), Maguire Asset Management, LLC (“Maguire Asset Management”), Timothy Maguire, Zuma Capital Management LLC (“ZCM”), ZCM Opportunities Fund LP (“ZCM Fund”), Brent S. Morrison, Richard A. Karp, Damien J. Park, Norman J. Rice, III and Kenneth H. Traub.
As of the date hereof, Catalysis Partners directly owns 424,006 shares of Common Stock. As of the date hereof, Catalysis Offshore directly owns 275,994 shares of Common Stock. Francis Capital Management, as the managing member and investment manager of Catalysis Partners and the investment manager of Catalysis Offshore, may be deemed to beneficially own an aggregate of 700,000 shares of Common Stock owned by Catalysis Partners and Catalysis Offshore. Mr. Francis, as the managing member of Francis Capital Management, may be deemed to beneficially own an aggregate of 700,000 shares of Common Stock owned by Catalysis Partners and Catalysis Offshore. As of the date hereof, Foxhill Opportunity directly owns 663,296 shares of Common Stock. Foxhill GP, as the general partner of Foxhill Opportunity, may be deemed to beneficially own the 663,296 shares of Common Stock owned by Foxhill Opportunity. Foxhill Capital, as the investment manager of Foxhill Opportunity, may be deemed to beneficially own the 663,296 shares of Common Stock owned by Foxhill Opportunity. Mr. Weiner, as the managing member of Foxhill GP and Foxhill Capital, may be deemed to beneficially own the 663,296 shares of Common Stock owned by Foxhill Opportunity. As of the date hereof, Maguire Financial directly owns 3,269,964 shares of Common Stock. Maguire Asset Management, as the general partner of Maguire Financial, may be deemed to beneficially own the 3,269,964 shares of Common Stock owned by Maguire Financial. Mr. Maguire, as the managing member of Maguire Asset Management, may be deemed to beneficially own the 3,269,964 shares of Common Stock owned by Maguire Financial. As of the date hereof, ZCM Fund directly owns 5,600 shares of Common Stock. ZCM, as the investment manager of ZCM Fund, may be deemed to beneficially own the 5,600 shares of Common Stock owned by ZCM Fund. As of the date hereof, Mr. Morrison directly owns 3,500 shares of Common Stock. Mr. Morrison, as the managing director of each of ZCM Fund and ZCM, may be deemed to beneficially own the 5,600 shares of Common Stock owned by ZCM Fund.
As of the date hereof, Dr. Karp directly owns 76,439 shares of Common Stock. As of the date hereof, Mr. Park directly owns 15,000 shares of Common Stock. As of the date hereof, Mr. Rice directly owns 46,600 shares of Common Stock. As of the date hereof, Mr. Traub beneficially owns 309,722 shares of Common Stock, including 139,355 shares of Common Stock underlying certain call options exercisable within 60 hereof.
Contact
Damien Park
Hedge Fund Solutions, LLC
215-325-0514
dpark@hedgerelations.com