(a)(1) As stated in this current report, William Dempsey, who resides in Dublin, Ireland, resigned as a director and each other position held in the Company or any subsidiaries, during a meeting of the Board of Directors held on January 24, 2012. The Company received written confirmation regarding that resignation in a letter dated January 27, 2012 and received today, which is attached as an exhibit.
That letter raises a number of issues on which the Company makes the following comments.
Mr. Dempsey alleges that insufficient information regarding Board meetings and minutes reflecting those meetings had been circulated to the Directors prior to Board meetings. In fact, as a policy and in reality, draft minutes of the prior Board Meeting and an agenda are circulated to the members of the Board in advance of the Board meeting for review and comment. Prior minutes are presented to the Board for approval at the onset of each meeting. Mr. Dempsey actually joined the unanimous vote of the Board on January 24, 2012 in approving the last minutes prior to submitting his resignation. He also has approved all prior minutes during his tenure.
As to allegations of potential financial reporting irregularities, the question raised was promptly put before the independent Audit Committee. Their preliminary determination that all reporting had been in accordance with all applicable rules and regulations was delivered to the Board at the January 24 meeting only after discussions with the Independent Auditor for the Company. Notwithstanding that preliminary determination, the Audit Committee confirmed at the meeting to all directors including Mr. Dempsey that they would complete a full review of the issue and provide a written presentation for the Board.
It also should be noted that Mr. Dempsey tendered his resignation and left the Board meeting during the discussion and prior to any vote regarding the board of the Company’s wholly-owned subsidiary, Vaso Diagnostics, Inc. d/b/a Vaso Healthcare. His decision to resign and remove himself from the Board and in all other positions with the Company was made at a time that alternate proposals, including maintaining a subsidiary board with Mr. Dempsey remaining as chairman, were being considered.
Item 8.01 Other Events
On January 24, 2012, the Board of Directors approved the appointment of an Executive Committee to function, as necessary, when the Board of Directors was not in session. The Committee consists of a minimum of three regular members of the Board. The Committee shall act only on the affirmative vote of a majority of its members at a meeting or by unanimous written consent. During the intervals between meetings of the Board, the Committee shall have and may exercise the powers of the Board except as may be limited by Delaware statute. The initial members of the Committee are its Vice Chairman – David Lieberman, the Chairman of its Audit Committee – Peter C. Castle and the Chairman of the Compensation Committee – Behnam Movaseghi.