01.12.09

Maxlife Fund Corp makes it easy; no comment necessary (but I’ll make one anyway)

Posted in All Categories at 5:32 pm by Michael Goode

From a letter to Maxlife Fund Corp from director Daniel Kahan attached to today’s 8k filing:

Gentlemen:
This letter shall serve as notice that as of the date hereof, I hereby resign from the Board of Directors of Maxlife Fund Corp. (the “Corporation“).
My resignation is the result of my disagreement with the Corporation relating to the value of the options it granted me in April 2008 to become a director.  Although these options have now vested, I have recently discovered that I cannot exercise them without the shares purchased, being restricted for a 6 month period.

Sincerely,

/s/ Daniel Kahan

Daniel Kahan

What this seems to indicate is that Mr. Kahan, even though he could buy the shares of Maxlife Fund Corp for below current market value (by exercising the options he was given for being a director) does not wish to exercise those options because he would have to hold those shares for 6 months before selling. The most likely explanation for this is that he believes (correctly) that Maxlife Fund Corp shares are wildly overvalued and at risk of falling greatly in the next 6 months. Because of this, he is quitting.

Of course, if Mr. Kahan had read my blog, he never would have signed up to be a director of Maxlife Fund Corp in the first place.

Disclosure: I have no position in MXFD. I believe the company’s fair value to be about 3 cents per share, the company’s book value.


2 Comments

  1. daniel kahan said,

    January 18, 2009 at 3:47 pm

    I am sorry to disappoint you but I have no idea (as I am not a prophet) whether IBM’s shares will be up in 6 months time,let alone Max Life. If you check up you will see that my stock options were expensed at around 100K using Black Scholes at the time they were awarded and that would have been a fair valuation, if there had not been a 6 month restriction in place which I only discovered in October after they vested.
    I had no problem in becoming a director of Max Life in April and would have been prepared to stay on if I had been given restricted shares rather than options. As I said in my previous comment the underlying business of Max Life is sound and if its incubation period is taking longer than expected due to the current market conditions then I would suggest a little patience is in order.
    In the meantime I am at looking creating a new secondary market for “untapped” Canadian life policies in Nova Scotia through my own company Scotia Life Line and any of your readers is welcome to contact me for more details.

  2. michael said,

    January 18, 2009 at 5:19 pm

    Thank you for your comment. Good luck in your new venture.