ARI Network shareholder Park City Capital isues letter to shareholders
ARI Network shareholder Park City Capital, beneficial owner of approximately 5.7% of ARI Network0s shares, has initiated a proxy contest to elect two new directors to ARI's six-member staggered board at ARI's annual meeting on January 5, 2017. The letter states, among other things: "ARI has noted that two of three of its audit committee members are up for election at the upcoming annual meeting. Although the ARI board is re-nominating William C. Mortimore for election to the board and continued service as its audit committee chairman, ARI has failed to disclose that Mortimore was Chairman of the Board and an officer of a public company founded by him that was charged by the SEC with a massive multi-year accounting fraud" (...) "Merge was permanently enjoined from future violations of the internal controls, books and records, and reporting provisions of the federal securities laws" (...) "We are gravely concerned about Mortimore's role as overseer of ARI's financial accounting and internal controls. Even more concerning is the apparent lack of awareness on the part of Mortimore and the ARI board regarding his embarrassing track record on financial oversight" (...) "Since fiscal 2011, while management's growth strategy has resulted in cumulative net income to shareholders of only $3.0 million, management has received $5.8 million in cumulative executive compensation" (...) "We believe that ARI can be sold today for the same price that management aspires to achieve over the next 3-5 years through its growth strategy. We believe the ARI board should lock-in that premium for shareholders now and avoid the risk that management may fail to execute on its business plan or there is a decline in the M&A market or the economy in general" (...) "Park City Capital does not believe that the ARI board can be trusted to consider all available options to maximize value for shareholders-and not just those that benefit the board and management-or to be open and honest with shareholders about it. Park City Capital's nominees will represent the best interests of all shareholders. (...)"