DJohnson Holdings Inc.

July 03, 2008 20:17 ET

DJohnson Holdings Acquires Control of 15% of the Shares of MIGENIX Inc. and Intends to Seek Board and Management Changes

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 3, 2008) - DJohnson Holdings Inc. (the "Company") announces that it acquired voting control and direction over 9,003,400 common shares of MIGENIX Inc. ("MIGENIX"). The Company now has beneficial ownership of and/or voting control and direction over an aggregate of 14,042,400 common shares (the "Shares"), representing approximately 15% of the total issued and outstanding common shares of MIGENIX.

In the Company's view, the current board and management team have consistently failed to act in the best interests of shareholders and have lost credibility through their chronic failure to achieve their stated goals. To date, no product candidate developed by MIGENIX has been approved to be marketed commercially and MIGENIX has been unprofitable since its formation, incurring significant operating losses each year and incurring a cumulative deficit of $124.7 million to April 30, 2007. Largely under the stewardship of the present board and management, MIGENIX's common shares have lost more than 86% of their value over the past five years, falling from $1.50 to $0.21 currently. As a result of the board's and management's fiscal irresponsibility, MIGENIX's cash position is at critically low levels. Immediate changes to the board and management and cost reductions are required in order to salvage MIGENIX, not to mention the shareholder's investment in MIGENIX.

Despite these failures and the significant destruction in value incurred by shareholders, executive compensation paid by MIGENIX is well beyond levels justified by management's achievements or industry norms. As MIGENIX produces no revenues, payment of executive compensation has been at the expense of MIGENIX's shareholders, namely through repeat equity financings of MIGENIX's common shares resulting in serious dilution to the ownership position of shareholders.

The Company is greatly disturbed at the results achieved under the leadership of the incumbent board, but believes that under new leadership MIGENIX can be turned around. As a first step, the Company believes that MIGENIX's absentee directors and officers must be removed. The most significant portion of MIGENIX's senior management team reside other than the location of MIGENIX's principal place of business in Vancouver, British Columbia, including:



NAME RESIDENCE POSITION
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James DeMesa Florida Chief Executive Officer and President
AnnKatrin Petersen-Japelli California Vice President, Clinical Development
David Campagnari California Vice President, Operations


Clearly, an absentee management team is not in the best interests of shareholders.

The Company is also convinced that a new board of directors is critical to align the interests of shareholders and management. The Company therefore intends to work to install a new slate of directors, which will include Douglas Johnson. Mr. Johnson is the indirect beneficial owner of over 5 million (5%) of MIGENIX's issued and outstanding common shares.

The Company has also determined to requisition a meeting (the "Meeting") of shareholders of MIGENIX to remove a majority of the directors of MIGENIX and replace them with nominees that the Company will identify prior to the Meeting and has acquired its interest in the Shares to effect such change. The Company will provide formal notice of its director slate in a forthcoming communication.

Additionally, the Company intends to evaluate its investment in MIGENIX and may make additional investments in or dispositions of shares of MIGENIX in the future, depending on price, availability and general market conditions.

In connection with this news release, the Company will file an early warning report on SEDAR. Copies of the early warning report may be obtained from SEDAR (www.sedar.com) or without charge by contacting the President of the Company.

Contact Information

  • DJohnson Holdings Inc.
    Douglas Johnson
    President
    (604) 682-7335