Contentious Proxy Battle Looms Between Broadfin Capital And Cardica, Inc. (CRDC)

Although Broadfin was able to elect three directors to the company’s board last year after sending a letter to the board expressing its intentions to avoid a proxy contest, the incumbent directors took steps such as expanding the board, which reduced the capacity of the three nominees to affect a meaningful change at Cardica, Inc., a change that is desperately needed given that the stock price has cratered by more than 47% in the last ten months and the enterprise value of the firm has crashed by 76% to just $8.5 million during the same period. Meanwhile, according to Broadfin, the Board has been wasting cash owing to its slow decision making processes and has also been missing milestones. Furthermore, after CEO Bernard A. Hausen resigned in early August, the board failed to come up with a succession plan and appoint an interim CEO despite the presence of some obvious candidates on the board with CEO experience.

Cardica, Inc. (NASDAQ:CRDC)’s board has apparently been playing a cat-and-mouse game with Broadfin, as it orchestrated the resignation of three directors so that at the 2014 shareholder meeting the directors that Broadfin had identified as problematic could not be removed. Similar tactics continued when the company denied Broadfin access to information pertaining to Cardica unless the fund signed a confidentiality agreement. When Broadfin finally entered into this agreement in August, the board announced the date of the next shareholder meeting just five days after rendering the Nondisclosure agreement null and void.

Tired of these childish games, which have resulted in nothing but further erosion of shareholder value, Broadfin is entering into a proxy contest with Cardica, Inc. (NASDAQ:CRDC). We’ll keep you updated on the proxy content as the battle progresses.

Disclosure: None