DATATRAK International, Inc. (DTRK: OTCQX U.S.) | Arosa Investment Management Initiates Proxy Contest at Datatrak International, Inc.

OTC

Arosa Investment Management Initiates Proxy Contest at Datatrak International, Inc.

Oct 12, 2015

OTC Disclosure News Service

Arosa Investment Management LLC, the beneficial owner of approximately
9.9% of the shares of Datatrak International, Inc. (OTC:DTRK), today
announced that it has initiated a proxy contest to elect three new
directors at Datatrak’s annual meeting of shareholders scheduled to be
held on November 11, 2015. These director candidates would fill the
three director positions up for election on Datatrak’s five-member
staggered board.

Arosa Investment Management intends to nominate the following three
director candidates at the annual meeting:

Jack H. Jacobs is a principal of The Fitzroy Group, Ltd., a real
estate development firm. He was previously a managing director of
Bankers Trust, as well as a co-founder of AutoFinance Group, Inc. He has
held the McDermott Chair of Politics at West Point since 2005 and has
served as an NBC military analyst since 2002. Mr. Jacobs’ military
career included two tours of duty in Vietnam where he was among the most
highly decorated soldiers, earning three Bronze Stars, two Silver Stars
and the Medal of Honor. He is on the board of the Medal of Honor
Foundation and the USO of New York.

James R. Ward is the consulting chief information officer for a
large non-profit market research and promotion organization. He was the
founder and CEO of ClickFind, Inc., which conducted over 100 clinical
trials worldwide before being acquired by Datatrak. He is the original
inventor of the technology and past VP of Research and Development and
VP of Customer and Market Strategy for Datatrak. He pioneered several
web-based companies and software products beginning in 1994 and provided
economic and technology consulting for Eastern Europe and South America
governments at Texas AM University.

Alex Tabatabai is the Managing Member of Arosa Investment
Management LLC, the general partner of Arosa Investment Partners LP, a
private investment fund. He previously served as Managing Member of
Fernbank Partners LLC, the investment manager of Fernbank LLC, a private
investment fund.

Arosa Investment Management strongly believes that Datatrak is in dire
need of new leadership at the board level to address the following
problems that it believes exist at the company:

Dismal stock performance: Datatrak’s
stock has returned approximately -38% for shareholders over the past
five years and approximately -94% for shareholders over the past ten
years. Arosa Investment Management believes that shareholders deserve
better than this performance.

Continuing significant net losses:
Datatrak reported net losses of $1,292,834, $128,902, $1,539,348 and
$1,006,887 on revenues of $11,010,792, $10,900,711, $9,716,225 and
$7,926,342 in fiscal years 2014, 2013, 2012 and 2011. Datatrak reported
even greater net losses in fiscal years 2007, 2008 and 2009.

Excessive executive compensation: With
revenues of only $11,010,792 in fiscal 2014, Datatrak paid its CEO and
CFO combined cash compensation of $1,073,737. This information is
contained in Datatrak’s annual report filed with the OTC Markets on
March 13, 2015, but surprisingly it is not included in the abridged
annual report that Datatrak mailed to shareholders with its proxy
statement for the annual meeting. The CEO and CFO received similar
levels of compensation in 2013. These figures do not include the equity
awards that have been granted to the CEO and CFO on top of their regular
cash compensation.

Poor corporate governance: Datatrak
maintains a staggered board and an anti-shareholder poison pill, with a
specially granted exception under the poison pill to the company’s
Chairman/CEO. Datatrak has maintained a convicted felon on its board of
directors and as chairman of its audit committee since 2009 and has
failed to make the required public disclosures of this felony
conviction. Datatrak’s new proposed nominee for the board is a current
Datatrak employee. Arosa Investment Management believes that the
Datatrak board recently completed an internal investigation relating to
the conduct of its Chairman/CEO. Arosa Investment Management calls on
the Datatrak board to immediately release the results of this
investigation. Based on its review of the board’s decisions over many
years, Arosa Investment Management believes that the Datatrak board does
not act as an appropriate check against the Chairman/CEO’s actions and
desires.

Shareholder dilution: Although Datatrak’s
Chairman/CEO stated in his recent annual report cover letter that “this
management team has not raised capital through… highly dilutive equity
infusions in the last six years that we have managed this company,”
Arosa Investment Management believes this statement is false and
misleading. Since 2009, Datatrak’s shareholders have been diluted by
approximately 32.25% through stock awards to executives and
directors—shareholder dilution that brought little to no additional
capital to the company. In addition, Datatrak has reported in its own
annual report that “on July 1, 2010, the Company privately placed
357,857 Common Shares with certain members of the Board of Directors and
key employees.” This special offering for insiders was made at a 15%
discount and occurred over two years after the current Chairman/CEO was
appointed Chairman of the Board.

Minimal board share ownership: Datatrak’s
outside “independent” directors have little “skin in the game,” owning
only 0.79% of the company’s stock. Arosa Investment Management believes
that this provides the outside directors with little incentive to seek
returns for shareholders and exercise appropriate oversight over
management.

Shareholders will receive a proxy statement and proxy card from Arosa
Investment Management. You may also obtain a proxy card from Arosa
Investment Management’s proxy advisor as provided below. We urge you to
cast your vote on Arosa Investment Management’s proxy card.

Shareholders may have already received a proxy statement and proxy card
from Datatrak’s management. We urge you not to return management’s proxy
card. If you have already returned management’s proxy card, you may
revoke it simply by now voting on Arosa Investment Management’s proxy
card.

If you own shares of Datatrak, we would like to
hear from you.
We urge you to call
us so that we can provide you with additional information and our proxy
materials.
Please contact Alliance
Advisors, Arosa Investment Management’s proxy advisor, toll-free at
855-737-3183.

Arosa Investment Management calls on the Datatrak board to comply with
its legal obligations and not interfere with the right of the company’s
shareholders to elect three of five directors at the already announced
annual meeting to be held on November 11, 2015.

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