Investors in a London-listed medical technology firm are continuing their campaign to oust the company’s top brass as its share price languishes.
Truspine Technologies, which is looking to develop unique spinal medical devices, floated on London’s rival stock exchange Aquis back in 2020.
But the company has failed to produce any products or secure key approvals from the US Food and Drug Administration (FDA), and has run into financial difficulties. Its share price has plummeted as a result.
A number of investors are now calling for Laurence Strauss, the chief executive, and Norman Lott, the chief financial officer, to step down, in the hope that new management will help turn the company around.
Robert Turner, 53, a private investor from Portstewart Northern Ireland, first invested in the firm before the IPO.
“While the products were compelling, the company structure and finances are proving to be something else,” Turner told City A.M., who has invested a total of £180,000 in the firm.
“Norman Lott, as CFO from the outset, bears responsibility for this and must go. Laurence Strauss was brought in to shore up Lott’s control. The pair of them have to go,” he said.
A retail investor, who wished to remain anonymous, told City A.M. they had invested a total of around £25,000 in Truspine.
“The product can be good for humanity and a good investment… and it’s such a shame that it’s just not going forward,” they said. “Anything that can be done to save it would be good.”
Marcus Nicholls, another retail investor, told City A.M.: “I don’t trust the directors at Truspine.”
“These directors misinform the market at every opportunity; about financing that never arrives and FDA approval that never comes,” Nicholls claimed. “Norman Lott and Laurence Strauss have to go.”
Aquis has previously penalised the company for misleading the market. The firm was fined £215,000, part suspended, in August last year after the exchange found it had misled investors about securing a loan, which had a charge over its assets.
“As a result of the failure to announce the charge at the time of entry into the loan, the market had a false impression of the company’s financial position and risk profile,” Aquis said.
“These events are indicative of a failure of fundamental procedures, systems, and controls in the governance of the company,” Aquis said, adding that the firm “has failed to act with integrity towards its shareholders”.
Some investors previously attempted to oust Strauss and Lott during a vote in May, but were narrowly defeated.
While the vote to remove them was ultimately unsuccessful, those investors have criticised the way in which the vote, which was overseen by Doug Armour from Share Registrars Limited, was conducted.
Some shareholders claim they have repeatedly asked for the vote to be double-checked by Share Registrars Limited.
Responding to questions about the vote, Armour told City A.M.: “This matter is the subject of an external enquiry and therefore it would not be appropriate for me to comment at this time.”
A number of new directors have been brought in since the vote.
In February, Victoria Sena, a former Bank of England staffer, and Samuel Ogunsalu were appointed as non-executive directors, while Geoffrey Miller was appointed as non-executive chairman.
But investors remain unconvinced by the changes.
“Fairly recent changes seem to be having little or no effect on improving the way this business is run,” Stuart Moore, 50, another retail investor from the Midlands, who has invested “a five-figure sum” in Truspine.
“I am giving up hope with the new NEDs,” he said. “There’s no sign of a new regime yet.”
Responding to investors’ complaints, Strauss told City A.M.: “We cannot control the FDA.
“We are introducing groundbreaking new technology and the FDA has been very thorough in investigating it.
“I do not believe our submission is massively late in terms of the current average time from entering the FDA process to clearance.”
Commenting on the vote last year, Straus said that any “claims of a fix are quite disgraceful and a libel against Share Registrars – a very reputable company.”
“We’ve always been very disappointed that they actually attacked Share Registrars.”
Strauss added: “The new directors have been in place for under six weeks. They have already made a difference and given time will be valuable additions to the board.”
When asked what he would say to shareholders who have seen the value of their investments collapse following the drop in its share price, he replied: “Everything being done now will lead to investor value being created.
“That’s my job as CEO to firstly protect investors and create value, and that’s what we’re doing.”
Write to Ben Lucas at ben.lucas@cityam.com