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CLARITAS - DIRECTORS CUT EXTENDED HARDCOVER EDITION


DREW

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"I will never recover financially."

And so says one of the many victim statements from the Former Shareholders of Claritas who lost pretty much all they invested into  the Robert Farrell run company.

Now don't get me wrong, people should only invest what they feel comfortable with and, only invest after conducting due diligence as is explained in every press release the company published.

However, events and results of trials not unfolding as expected is one thing and, is completely different from incompetence and deliberate obfustigation of direction, trials and timelines.  Nobody would or should expect that company management would ever deliberately work towards sabotaging themselves and thereby ruin the entire investors block along the way.

The Former Shareholders of Claritas (FSHOC) have been trying to ascertain how the company has gotten to the state where it simply stopped working on everything and, company officials have ceased all communications.

After going over all the available sources of information short of questioning those responsible we have put this working brief together in order to explain and clarify whom we need to try to get information from as well as where to direct our attention for further information gathering and possible action.

So far, we seem to be in agreement that Dr. Andrew Salzman (Salzman) had a drug (R-107) that he was developing on behalf of the US Government on a grant which had expired.  Wanting to continue progressing he licensed it out to us in a collaborative effort to bring it to what both he and Robert Farrell (CEO of Claritas) both inferred could be an extremely lifesaving and financially lucrative drug.

Along the way we seemed to have been plagued by the same problem over and over – it being the inability for management too get our Phase 1 trial off the ground.  This trial was an essential one which was seen to be of paramount importance by all parties yet, for some reason, despite having the money to pay for it and get it moving management always reallocated those funds to other non vital areas which created a syndrome where our share price languished and experienced a terminal drop in value.

 Many readers will be somewhat familiar with this story and may already have preconceived ideas.  I know I did when I began writing this but they changed as I went along so hopefully, you will find something here to change your outlook as well.

 
THE CLARITAS STORY


Around March of 2020 Kalytera was floundering with its trading halted having lost complete momentum on its KAL 1816 GVHD program and, was unable to market this drug for further development.

Robert Farrell (Farrell) and Andrew Salzman (Salzman & Salzman Group etc.) came to an agreement on which a drug known as R-107 which Salzman had been developing under an $80 million grant from BARDA (US Government) could be continued to be developed by Kalytera as the funding had dried up after the first tranche of $16 million had been used.

They said they felt that the addition of this drug to Kalytera’s pipeline would help both parties and thus, the deal was struck that we are now apparently near the end of.

To explain the drug in a nutshell, lung injuries and afflictions frequently use inhaled nitric oxide gas to augment oxygen as treatment however, this requires machines and professional staff to induce it as the patient needs to be anesthetized and machines are expensive and in high demand. 

R-107 was thought to be able to provide nitric oxide by injection which only requires a needle and, would be viable for 24 hours requiring no staff or machine thus, it was anticipated that this  could be a big seller, change medical history and, make us a lot of money.

THE START

Mr. Farrell immediately set to work churning out Press Releases announcing the deal  explaining the benefits of the drug as well as implying the extreme markets and profits we could see. 

On June 15 2020 (1) Claritas pumped out its first Press Release on Phase 1 for R107 and immediately began the hunt for operating cash, talking to Obsidian LLC of New York who explained they required a share price of well above five cents to do business with us.  As our SP at the time was 3.5 cents it meant that we would need a reverse split to get this on track so, we began working towards that using in house private placements to carry us through.

On July 16 2020 we announced the formalization of the deal with Salzman to use his R-107 to develop it for COVID and, our program comes alive. (2) 

NAME CHANGE AND THE SALZMAN RELATIONSHIP

On February 26 2021 we begin trading again and on April 2, Kalytera changes stripes to Claritas which, I surmise was both Salzman and Farrell’s joint decision. And our really really expensive website went online. (12)

MR. FARRELL SELFLESSLY SACRIFICES HIS WAGES TO PUSH THE COMPANY FORWARD

Starting in July 2020 Mr. Farrell states his dedication to giving it all to ensure this moves ahead is so intense that he has self suspended his pay in order to get us on the road to success.  (3) (4) (5) (6) (7)
“Yeah I'm working for less than free.”  “The last time I got a paycheck was September and since then there's been no income.  On top of that I've been paying certain small expenses of the company on personal credit” (3) he proclaimed.

In September 2021 Farrell states again that he has not been taking a paycheck yet, in the MD&A of November 29, 2021 it shows that he and Victoria Rudman (Rudman) received $281,000 USD for the previous 9 months wages. (3)

The April 28, 2021 the MD&A announces that; (10)  the “Phase 1 safety and pharmacokinetic study of intramuscular R-107 will be conducted at CMAX and as of December 31, 2020, Claritas had made partial payments of the $1.2 million cash license fee to the former shareholders of Salzman Group in the total amount of approximately $764,000.”

So, with Farrell so confident that he is working for free, Salzman happy with a pile of shares and cash, CMAX is ready to accept our study - we’re moving!

(1)  JUNE 15 2020

KALYTERA ANNOUNCES DATA DEMONSTRATING THAT R-107 PREVENTS TISSUE DAMAGE AND INCREASES SURVIVAL IN A MURINE STUDY OF CHLORINE INHALATIONAL LUNG INJURY 

This became our first notice about phase 1.

“Kalytera plans to submit an Investigational New Drug Application (IND) to the Australian Therapeutic Goods Administration (TGA) and the U.S Food and Drug Authority (FDA) for a Phase 1 clinical study of R-107 in healthy middle-aged volunteers in order to establish that the drug is safe and well tolerated. This study is intended as a prelude to a definitive large animal investigation to prove the safety and efficacy of R-107 in a clinically relevant model of CILI.”

We were also informed that Salzman may also receive help from the US Government AKA BARDA;

“In 2016, BARDA awarded Salzman Group a USD $15.9 million contract to develop R-107 as a treatment for CILI as part of ongoing preparedness efforts to protect the nation from potential health security threats. An additional USD $69.9 million could be released to Salzman Group over the next 36 months, as developmental milestones are achieved. The results of the murine study presented above were obtained in 2016 prior to BARDA funding.”

(2) JULY 16, 2020

KALYTERA ANNOUNCES EXCLUSIVE LICENSE AGREEMENT WITH SALZMAN GROUP FOR DEVELOPMENT AND COMMERCIALIZATION OF R-107 FOR TREATMENT OF CORONAVIRUS AND COVID-19 INFECTION EXCLUSIVE LICENSE IS PART OF LARGER TRANSACTION TO ACQUIRE SALZMAN GROUP JULY 16, 2020

SOON AS THE CTO IS LIFTED, WE WILL PAY SALZMAN …

A “license fee of 130 million Kalytera common shares to Salzman Group.”

(3)  SEPTEMBER 9 2020 - INTERVIEW WITH BOB FARRELL

“How have we been able to survive the past few months – are you working for free?”

BOB: “Yes.  I have not received a paycheck since December and paid all fees out of pocket including the $6500 to apply with the TSXV for PP and other stuff.”

(4) JULY 8 2020 PHONE - CALL MR. FARRELL;

“yeah I'm working I'm working for less than free the last time I got paycheck was September and since then there's been no income.  On top of that I've been paying certain small expenses of the company on personal credit cards yeah so at some point I need to be reimbursed but it won't be out of this 450,000”

(5)   SEPTEMBER 13 2020 

INTERVIEW WITH BOB FARRELL

“It’s a lot of work putting something like this together and, as you know, It’s being done on a shoe string so, my renumeration has been self-suspended since December so essentially I’m working for free”

(6)  SEPTEMBER 2021 Farrell states that he has not been taking a paycheck yet, in the MD&A of November 29, 2021 it shows that he and Victoria Rudman (Rudman) received $281,000 USD for the previous 9 months wages.

(7) FEBRUARY 16 2022 PHONE CALL -  MR. FARRELL - 
Drew – “I'm kind of kind of waiting till I get paid by you Bob” 

Bob – “I'm waiting too”

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A SMALL DETAIL …

There were benchmark payments for the end of Phase 1, Phase 2 buying of the IP and sub licensing (61) So, since nobody knows the future and, there may be financial problems along the way,  FSHOC is curious as to why Salzman and Farrell, instead of immediately paying Salzman in total for the R-107 license when we were so low on cash, why didn’t they put in a clause stating ‘that when Phase 1 has been successful that we will pay that cash in the form of a milestone payment with interest’ as everybody knew that Phase 1 was paramount to our progression, advancement, share price … and survival.  So, a clause such as that would be prudent to ensure that nothing would be taking away funds needed to start Phase 1 so, why didn’t they amend the deal to read ‘later?’

FAMILY MATTERS

If anybody was confused as to our relationship with Salzman it was clarified many times such as on March 03, 2021 when it was announced that (10) (12)

“Claritas Pharmaceuticals, today announced that it has entered into a STRATEGIC COLLABORATION Agreement (the Collaboration Agreement”) with the Salzman Group, Ltd. (“Salzman Group”), and is in the process of entering into similar agreements with other companies, to expedite the development of the Company’s breakthrough nitric oxide-releasing compound, R-107.”

April 28, 2021 the MD&A announces that;

“Claritas and Salzman Group are working together to advance R-107 into Phase 1 clinical testing.” (10)  

In April 2021 to further confirm the Salzman partnership ‘THE TEAM’ (12) was introduced, all save Mr. Farrell were … and continued to be Salzman assets - Andrew Salzman, MD, Scientific Advisor, Yousif Sahly, Director of Quality Control, Gali Guzikevich, Director of Quality Assurance and Amos Rosenthal, Head of Chemistry.

These Salzman Group assets left no doubt in anybody’s mind that Salzman and his associates were working hand in glove with Claritas (the former Kalytera.)

So together, hand in hand we walk down the aisle to begin the workup to the reverse stock split in earnest during the start of 2021.  The Press Releases regurgitated the studies on NO and animal studies – all designed to increase interest by investors.  Salzman was excited and vocal;

“When the company announces start of Phase 1 clinical trials we should see a very different share price.”

“Come on Claritas, let's get the Phase 1 on the road. We will be unstoppable.”

Unfortunately the only ones this impressed were the shareholders which were mainly retail investors who had, over the years put their life savings into this stock and were still waiting for institutional investors to jump aboard. 

Salzman’s enthusiastic optimism is confusing as it is shown later that he is more than willing to throw the Phase 1 study under the bus to take as much money now as he can rather than allow our drug development to ‘run free’ so to speak.

FSHOC is curious, why was he so intent on making sure he got paid in the here with cash that the company desperately needed to conduct Phase 1 with?  It makes no sense to pump for a Phase 1 you cannot conduct because you continually reallocate the money which is necessary to pay for it to other things. 

“As of March 31, 2021, Claritas had made partial payments of the $1.2 million cash license fee to the former shareholders of Salzman Group in the total amount of approximately $1 million and issued during April 2021, 130,000,000 common shares.”

So here we were, April 21, 2021 on the verge of getting $1.4 million from Obsidian  and having given Salzman enough money to have paid for the Phase 1 study  (48)  we get the news ….

CMAX & BARDA

We will be conducting the much anticipated Phase 1 trial at CMAX. (14)  It is also explained that the payment for this trial will be by the tax refund. 

“Funding for the Company’s Phase 1 clinical study at CMAX will be provided from an R&D expense refund that the Company expects to receive next month from the Australian Tax Office (the “ATO”). The ATO provides refunds of up to 43% of qualifying R&D expenditures, and this was a factor in the Company’s decision to conduct much of its research activities in Australia.”

In the MD&A of April 28, 2021 we learn that we have some new blood on our BOD:

“The resignations of Mr. Hutchison and Mr. Erickson followed the recent appointment of Professor Salvatore Cuzzocrea, Ph.D. to the Company’s Board of Directors.

On March 26, 2021, the Company announced the addition of Perenlei Enkhbaatar, MD, PhD, FAHA as an independent member of the Company’s board of directors. (15)

As we are all aware, a good part of the responsibilities of the BOD is to guide the company forward, keep an eye on resources (including finances) and, watch out for the rights and interests of the shareholders (FSHOC) so we welcome these two knowing they will do a great job of protecting our interests and guiding the company to success.

The MD&A continues to remind us of how we will be shooting for the BARDA grant (some point put in the white paper quote from Bob)

“Following completion of a Phase 1 clinical safety and pharmacokinetic study, Claritas intends to apply for funding from the U.S. Department of Health and Human Services for the costs of Phase 2 and Phase 3 clinical studies of R-107 in coronavirus and COVID-19 infection. • If the application for a new BARDA contract (49) for development of R-107 for treatment of coronavirus and COVID-19 infection is successful, Salzman Group may receive an additional USD $20 million under this BARDA contract.” (15)

(10) MARCH 03, 2021

CLARITAS (FORMERLY KALYTERA THERAPEUTICS, INC.) TO COLLABORATE WITH SALZMAN GROUP AND OTHER COMPANIES TO ACCELERATE DEVELOPMENT OF R-107 FOR TREATMENT OF VACCINE-RESISTANT COVID-19, INFLUENZA, AND OTHER VIRAL INFECTIONS

“Claritas Pharmaceuticals, Inc. (formerly Kalytera Therapeutics, Inc today announced that it has entered into a Strategic Collaboration Agreement (the Collaboration Agreement”) with the Salzman Group, Ltd. (“Salzman Group”), and is in the process of entering into similar agreements with other companies, to expedite the development of the Company’s breakthrough nitric oxide-releasing compound, R-107.”

MD&A APRIL 28 FOR THE YEAR ENDED DECEMBER 31, 2020

“Claritas and Salzman Group are working together to advance R-107 into Phase 1 clinical testing.”

 

(12)  APRIL 2021

At this time, a new website had been made which detailed the Salzman Group’s involvement with Claritas.  It proudly listed ‘THE TEAM’

Robert Farrell
President and CEO

Mr. Farrell has more than 30 years of experience in the pharmaceutical, biotechnology, and medical device sectors. Mr. Farrell has had primary or significant responsibility for the completion of mergers & acquisitions, corporate partnerships, licensing transactions, and divestitures in both the U.S. and Europe. In addition, Mr. Farrell has many years of operational experience, including responsibility for all financial operations.

Prior to joining Claritas Pharmaceuticals (formerly known as Kalytera) in 2016, Mr. Farrell worked as an executive officer with the Institute for One World Health, an affiliate of the Bill and Melinda Gates Foundation. Mr. Farrell has also held senior positions with publicly listed companies, including Titan Pharmaceuticals, where he served as President and CEO from 2008 to 2009 and as Chief Financial Officer from 1996 to 2008. Previously, Mr. Farrell served as Chief Financial Officer, Corporate Group Vice President, and General Counsel at Fresenius USA and Fresenius Medical Care. Mr. Farrell received a law degree (J.D.) from the University of California, and his undergraduate degree (B.A.) from the University of Notre Dame. Mr. Farrell is a member of the California State Bar.

Andrew Salzman, MD

Scientific Advisor

Dr. Salzman is a physician, scientist, inventor, and biomedical entrepreneur with more than 20 years of experience in biomedical drug discovery and development. He studied psychology and English literature at Yale College and medicine at Harvard Medical School. After a pediatric internship and residency at Columbia University (New York, NY), he undertook  post-doctoral fellowships in pediatric critical care, neonatal critical care, immunology, epithelial biology, and pediatric infectious disease at the Weizmann Institute of Science in (Rehovot, Israel), Children’s Hospital Medical Center (Boston, MA), the Massachusetts General Hospital (Boston, MA), the University of Massachusetts Medical Center (Worcester, MA), and Beth Israel Hospital Medical Center (Brookline, MA). Prior to his entrepreneurial career in biotechnology, he founded and led the Division of Critical Care Medicine at Children’s Hospital Medical Center (Cincinnati, OH), one of the largest pediatric critical care programs in North America.

In 1999, Dr. Salzman left academia to found Inotek Pharmaceuticals, followed by the founding and leadership of a number of biotechnology companies in Israel and the United States, including Radikal Therapeutics, Salzman Capital Ventures, Salzman Lovelace Investments, and Respirometics. Over the past twenty years, Dr. Salzman has received funding for 135 NIH, DARPA, and BARDA grants totaling $160 million. This work has supported research activities resulting in 200 scientific publications and 50 patents, spanning work in ischemia-reperfusion injury, intestinal mucosal biology, pulmonary arterial hypertension, autoimmune disease, and mechanisms of pro-inflammatory gene expression.

His basic scientific discoveries include the identification of:

the enhancer region of the human inducible nitric oxide synthase gene

the principal microbial protein (flagellin) that activates inflammation in epithelial cells

the enzyme in bacteria that detoxifies nitric oxide (flavohemoglobin)

the first soluble nitric oxide donor that selectively lowers pulmonary hypertension

the first nitric oxide synthase inhibitor selective for the inducible isoform

the first ultrapotent selective A1 agonist

the first nanomolar-potent PARP inhibitor

Yousif Sahly, PhD

Director of Quality Control

Dr. Yousif Sahly received his doctorate in Organic Chemistry in 1988 from the Technion, Israel Institute of Technology followed by post-doctoral training at the Massachusetts Institute of Technology. He has over 25 years of experience in large and emerging pharmaceutical companies in the USA and Israel. He has worked at Pfizer as a Director of Drug Metabolism and Pharmacokinetics and at Merck as a Senior Scientist in the Department of Drug Metabolism.

Dr. Sahly joined Teva in Israel in 2009 where he served as the Senior Director and Head of Analytical Research and Development. There he managed a department comprised of senior and associate scientists responsible for analytical method development and qualification for drug candidates of small molecules, complex mixtures (such as Copaxone), peptides, and oligonucleotides in support of formulation, chemical development and regulatory submissions. Dr. Sahly manages both the Good Manufacturing Practice (GMP) analytical and Good Laboratory Practice (GLP) bioanalytical laboratories.

Gali Guzikevich, PhD

Director of Quality Assurance

Dr. Guzikevich is an organic chemist with more than 15 years of experience in the pharmaceutical industry. She earned her doctoral degree in structural biology and chemistry at the Weizmann Institute of Science, and has authored three peer-reviewed publications in Nature. Dr. Guzikevich is an expert in Quality Assurance and Regulatory Affairs, and has a profound knowledge in international pharmaceutical guidelines, including standards of Good Manufacturing Practice (GMP) and Good Laboratory Practice (GLP).

Dr. Guzikevich has successfully led dozens of FDA, European, Israeli, and other Health Authorities Inspections. She has played leading roles at major pharmaceutical firms, including Quality Assurance of commercial GMP facilities, Quality Control laboratories, development manufacturing plants, and Research & Development laboratories. Gali was the Global GMP QA Senior Director at Teva Pharmaceuticals for 8 years. Prior to that role, she served as the Director of Quality and Regulatory Affairs at Teva Pharmaceuticals. Gali also worked as a Product Manager for Agan Chemical Manufacturers.

Amos Rosenthal, PhD

Head of Chemistry

Dr. Rosenthal earned his Bachelors Degree at the VU University Amsterdam in the laboratory of Professor Koop Lammertsma on the topic of phosphorous chemistry. He then moved to the University of California, Riverside in the laboratory of Professor Guy Bertrand to work on carbene chemistry. He earned his doctoral degree in organometallic chemistry from the Swiss Federal Institute of Technology in Zurich in the laboratory of Prof. Hansjörg Grützmacher, where he developed new ligands, coordinated them to various metals, and demonstrated catalytic activities. In his post-doctoral fellowship at Université Toulouse III – Paul Sabatier in the laboratory of Professor Didier Bourissou, he synthesized new radical phosphino boranes, which show a reversible dimerization, novel for boranes.

Dr. Rosenthal has authored several peer-reviewed publications, including a manuscript in Science. As Head of Chemistry he leads the development of new target molecules from ideas to gram-scale proof-of-concept through to kilogram-scale commercial production.

(14)  APRIL 21, 2021

CLARITAS ANNOUNCES AGREEMENT WITH CMAX CLINICAL RESEARCH FOR PHASE 1 CLINICAL STUDY OF R-107 APRIL 21, 2021

Phase 1 Clinical Study to be Conducted by CMAX in Adelaide, Australia

“CMAX will conduct a Good Clinical Practice (“GCP”) Phase 1a study of IM injectable R-107. The study is expected to begin enrollment in early Q3 this year, and will have a duration of two months. The study will enroll 32 healthy middle-aged volunteers in 4 ascending dose cohorts.

Funding for the Company’s Phase 1a clinical study at CMAX will be provided from an R&D expense refund that the Company expects to receive next month from the Australian Tax Office (the “ATO”). The ATO provides refunds of up to 43% of qualifying R&D expenditures, and this was a factor in the Company’s decision to conduct much of its research activities in Australia.”

 

(15)  MD&A APRIL 28, 2021

“The resignations of Mr. Hutchison and Mr. Erickson followed the recent appointment of Professor Salvatore Cuzzocrea, Ph.D. to the Company’s Board of Directors.

On March 26, 2021, the Company announced the addition of Perenlei Enkhbaatar, MD, PhD, FAHA as an independent member of the Company’s board of directors.

Following completion of a Phase 1 clinical safety and pharmacokinetic study, Claritas intends to apply for funding from the U.S. Department of Health and Human Services for the costs of Phase 2 and Phase 3 clinical studies of R-107 in coronavirus and COVID-19 infection. • If the application for a new BARDA contract for development of R-107 for treatment of coronavirus and COVID-19 infection is successful, Salzman Group may receive an additional USD $20 million under this BARDA contract.”

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THE GOLDEN WEBSITE

On May 28 2021 Mr. Farrell announces he is paying for some web design work with a hefty share transaction of almost 7 million shares ($241,000). 

A few things are interesting about this transaction the first one being, what kind of a web site would cost a quarter million dollars?  We’re not mining for Bit Coin, running Google or Porn Hub, we’re a sleepy R & D that probably gets twenty hits a day.  So why the need for anything more than a $10 per month server with a two thousand dollar website?

The second strange thing is that Salzman’s daughter Natalie Lurie Salzman was in charge of the web sites and social media.  FSHOC would like to know how much of this money went to her and, how much was kicked back to Dr. Salzman? (19) (25)  (Perhaps Drs. Cuzzocrea and Enkhbaatar can shed some light on this as handing over 20% of our company for a web site surely would have come up on their radar.)

And even more financing is announced August 18, 2021.  This time it’s the highly anticipated tax refund and, the first tranche from Obsidian.  It’s explained that the former was going to be used to conduct the Phase 1 trial which, was also previously explained by both Salzman and Farrell to be essential for our progression and, to move the share price upwards.

“Claritas will receive aggregate proceeds of approximately CAD $1,980,000 (the “Aggregate Proceeds”) from the closing of the first tranche of the Offering and the receipt of a cash rebate of R&D expenses from the Australian Tax Office.” (20)

“The Aggregate Proceeds will be allocated primarily to the cost of the Phase 1 clinical study of R-107, as well as for general corporate purposes.”

Ok, so we’re going to have to use both of them now.  We must have already given them the entire tax rebate and only need some of the Obsidian money – ‘chump change.’

SUCCESS CHECKLIST

DRUG LICENSES – CHECK!

WINNING DEVELOPMENT TEAM – CHECK!

REALLY EXPENSIVE WEB SITE – CHECK!

FAITHFUL STOCKHOLDERS – CHECK!

SALZMAN AS A TEAM MEMBER/COLLABORATOR/PARTNER – CHECK!

POTENTIAL BARDA GRANT – CHECK!

PHASE 1 TRIAL – CHECK!

SOLID DRUG DEVELOPMENT PLAN – CHECK!

OBSIDIAN FINANCING – CHECK!

AUSTRALIAN GOVERNMENT TAX REFUND – CHECK!

As Salzman said;

“This stock is going to explode in value because of its fundamentals: great technology, world class science, excellent market with unmet medical need, and awesome team that is executing at the operational level.” (57)

And, added to the enthusiasm on 7 May 2021 with;

DREW:   “How excited are you about the upcoming Phase 1?”

ANDREW:   “Very excited.  After working in the nitric oxide field continuously for 31 years now and so, for me this is the culmination of a career in the field, and the pinnacle of that work is R-107 and so, I'm very excited about it.  I have every reason to believe that this drug will be well tolerated, saves lives and have good blood levels which is the purpose of the phase one. So, in my view the trial will be a resounding success based on the data”.  (16)

So, we were swimming in cash, paid for Phase 1 and, were about to get more.  Shareholders were excited as finally we were moving!  The chatter on social media was fast and furious as investors began to frequent the CMAX site looking for our study start dates and returning to speculate and chat.  

Xmas for Salzman – and … Friday the 13th for the shareholders because what followed was  …. Nothing but a … 

NIGHTMARE ON CLARITAS STREET 

See, we had received the tax refund but, instead of putting it towards the study as was stated we would, Farrell instead paid Salzman, himself, Tom, Dick & Harry instead because they were going to exclusively use the Obsidian money for the study we were extremely excited about.  The study that would move both Farrell’s and Salzman’s life’s work along and the guy who had put his wages aside to push this company up the hill of success, save lives, get us a $20 million BARDA grant, up the share price and his millions of shares.  Yes, and the BOD - Drs. Enkhbaatar and Cuzzocrea signed off on all this to help make sure the Phase 1 didn’t start then.

This might not have been a problem if things had worked right but, the TSXV stepped in and had some problems with the Obsidian financing.

 

(19) MAY 28 2021

CLARITAS ANNOUNCES SETTLEMENT OF DEBT TRANSACTION  CLARITAS TO SETTLE $241,009 OF DEBT WITH 6.88 M SHARES

“Mr. Robert Farrell reports Claritas Pharmaceuticals Inc. has entered into an agreement to pay amounts owing to a service provider for past services in common shares of the company. The transaction is subject to approval by the TSX Venture Exchange.

The debt owing is in the amount of $241,009.12. This debt is owed to Roni A. Cohen, doing business as RacTech, as compensation for website development and design, website hosting, support social media management, IT (information technology) services, SAP and SAS application licensing, installation and support, and various other IT-related activities. The company will issue 6,885,975 common shares to RacTech upon approval of the TSX-V.”

(20) AUGUST 18, 2021

CLARITAS ANNOUNCES PROPOSED FINANCING WITH OBSIDIAN GLOBAL GP, LLC, RECEIPT OF AUSTRALIAN TAX CREDIT, AND START OF PHASE 1 CLINICAL STUDY OF R-107

It’s announced we also had a tax refund from Australia which was explained was going to be used to conduct the Phase 1 trial which, was also explained by both Salzman and Farrell to be essential for our progression and, to move the share price upwards. “Claritas will receive aggregate proceeds of approximately CAD $1,980,000 (the “Aggregate Proceeds”) from the closing of the first tranche of the Offering and the receipt of a cash rebate of R&D expenses from the Australian Tax Office.”

“The Aggregate Proceeds will be allocated primarily to the cost of the Phase 1 clinical study of R-107, as well as for general corporate purposes.”

So we could have been swimming in cash, paid for Phase 1 and, were about to get more but, the deal was confusing to the TSX so they haggled over it for two months. 

(22) OCTOBER 19, 2021

THE COMPANY ANNOUNCES CLOSING OF CONVERTIBLE DEBENTURE FINANCING WITH OBSIDIAN GLOBAL GP, LLC (“OBSIDIAN”) FOR NET PROCEEDS OF USD $930 THOUSANDS.

(23) NOVEMBER 18, 2021

Despite the surety of the study being cancelled it is not formally announced until NOVEMBER 18 2021 CLARITAS TODAY PROVIDED AN UPDATE REGARDING THE EXPECTED TIME TO COMPLETION OF ITS PHASE 1 CLINICAL STUDY OF R-107, THE COMPANY’S PROPRIETARY, LIQUID, NITRIC OXIDE-RELEASING COMPOUND (THE “PHASE 1 STUDY”). PHASE 1 STUDY TO BE COMPLETED AT SCIENTIA CLINICAL RESEARCH

“Following completion of the Phase 1 Study, we (Claritas) will initiate our planned Phase 2a study of R-107 in treatment of pulmonary arterial hypertension (“PAH”), and apply for U.S. governmental grant funding for the further development of R-107 for treatment of COVID associated lung disease.” 

(24) NOVEMBER 29, 2021

CLARITAS PHARMACEUTICALS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF NOVEMBER 29, 2021

“Salzman Group has spoken with the U.S. Biomedical Advanced Research and Development authority (“BARDA”) regarding a new BARDA contract to support the development of R-107 for coronavirus and COVID-19 infection.  If awarded, the new contract would support a clinical trial in intubated and mechanically ventilated patients with COVID-19 associated pulmonary failure.

Planned Phase 1 Clinical Study to Evaluate Safety and Pharmacokinetics of R-107 Given the data demonstrating the antiviral activity of nitric oxide against coronaviruses, as well as the even greater body of data demonstrating the potential activity of nitric oxide in treatment of viral-associated lung disease, Claritas and Salzman Group are working together to advance R-107 into Phase 1 clinical testing.”

“This Phase 1 safety and pharmacokinetic study of R-107 using a single dose escalation design in 32 healthy middle-aged volunteers will be conducted at Scientia, a clinical research organization located in Sydney, Australia. The study is expected it to be completed by the first quarter of 2022.”

 

(25) DECEMBER 7 2021 EMAIL; ROBERT FARRELL 

“Hi Drew, Natalie Salzman, Andy Salzman's daughter, set up website and our social media accounts.

For the website, she hired a website designer who did the actual work. I think she set up the social media accounts (Facebook, LinkedIn and others) by herself.

She is in favor of adding you as an admin on the Facebook page and will do that right away.  Would it make sense for you to speak with Natalie about this directly?

Natalie and I will also work on updating the website. Bob”

 

(57)  APRIL 8 2022 LAST PRESS RELEASE AND POST ON THE CLARITAS WEBSITE GOES UP

CLARITAS ANNOUNCES APPROVAL FROM OTC TO UP-LIST TO OTCQB

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THE OBSIDIAN SAGA

Mr. Farrell opined to me about the trials of haggling with the TSXV over getting them to release the Obsidian funds so we could carry out our Phase 1 trial saying they tried and toiled over it for two months.  He explained it in a phone call September 28 2021; (21)

MR. FARRELL:  

“We asked the lawyers to try and talk to the TSXV today because exchanging emails is very inefficient.  They sent us some e-mails listing all their questions, comments and concerns and then the next day after all the lawyers have reviewed it we sent the response back and 48 hours goes by.  Then the response to the response and next thing, the whole week has gone by and nothing has been accomplished and we're kind of going down that path right now.”

(The details the TSXV needed to be addressed are lengthy and contained in the reference.)  (21)

SOYANARA CMAX

During this time, CMAX, the Australian facility where we were going to conduct Phase 1 had enough.  They sent us a final warning saying shit or get off the pot because they had other companies who need to do their Phase 1 so pay up.  Mr. Farrell explains:  (21).

“I told CMAX we didn't make the payment last week and now we're into this week and I haven't heard back from TSXV so, it's really possible they may say ‘well you know, we tried the contract with you guys again boys, you said you would pay it - you didn't and, we're going to terminate the contract and give this spot to somebody else’ and, it's entirely possible that will happen.”

On top of that, one would think that having close to a million dollars from the Australian tax refund would have been enough to at least hold our seat at CMAX but nope, we spent it on something else..  (Salzman, Farrell’s wages for driving us into the ground)

LOOKING FOR LOVE

Around the start of October we actually lost that position which, brought us to the next part of the Claritas Follies - the search for our next Phase 1 facility.  My efforts to help find a place be it Topeka, Tijuana or Timbuktu fell on deaf ears as it had to be Australia as we would get a tax refund of 43% the following year.  My reasoning was that 'who cares about $430k when our share price would go up to a dollar from twenty cents’ (an increase in $30 million) but no, it had to be an Australian company.

In phone calls with Mr. Farrell over the next few weeks I explained to him of our need for Phase 1 to which he agreed over and over.  It came to  the point where if I wanted a ‘YES’ I merely brought up the need for Phase 1 and he chirped out an emphatic ‘YES’ like a dog doing a trick.  Salzman agreed in his quotes (57) and, in the phone calls as Farrell explained to me what Salzman said.  We all knew that time was of the essence to get this off the ground, yet Salzman would only deal with an Australian facility. 

As Mr. Farrell put Dr. Salzman’s Australia demand to me in frustration ‘It’s like the rebate is wagging the dog.”  (73)

PERFECT STORM

For the previous few months I had a plan that I had run by Farrell a few times that he was quite enthusiastic about which I called it the PERFECT STORM (29) (39) And, every now and then I would run it by him and every now and then he would turn it down.

It basically runs on the theory that after looking at the level 2 on Claritas, it would only take a small amount of cash to temporarily move that share price up to some fairly good heights – possibly enough to cause a short squeeze, get some day trading action and institutional investing going on.  Possibly sustain it enough to have some warrants exercised.

He was all for it but when I asked him to pay us debenture holders out so we could do this he suddenly was all thumbs and then carried on crying the blues about how the company had no money to pay for Phase 1.

Anyhow, we chatted about that multiple times as well as July 16 2021 The day before Salzman took his wife on a vacation with our money. (69)

HELLO SCIENTIA

After a couple of weeks they settled on Scientia, nice enough place I guess and so, began to work with them, against them, they against us or Salzman against everybody depending on how you look at it. (73)

Finally on October 19 2021 we get the money from Obsidian. (22)  Getting this announcement was taken by FSHOC as a ‘whatever’ instead of the momentous occasion Farrell thought it was as he proudly announced;

“We are delighted to announce this transaction with Obsidian, which will enable the Company to move forward with and accelerate our Phase 1 clinical study of R-107,”

We were all pretty much shaking our heads knowing that if somebody had thrown a couple hundred thousand dollars at CMAX to hold our spot we would be in the middle of the third or fourth cohort at that time.  Instead, it’s still another month before we get news of any progress with Phase 1. (23)

After a few weeks (remembering that this is a year after we were supposedly ready for our Phase 1 with CMAX) Salzman sent in those same trial parameters to Scientia and, their Ethics Committee had some questions – most were pretty simple and mainly dealt with items that should have been included with the original submission like typos such as days ‘57’ vs ‘5’, using subject between the ages of 25 – 45 so remove the term ‘middle-aged,’  text cut off by figures needing correction and clarifying the percentage of R100 and R107 that was used in rats and dogs among others.(62)  

Mr. Farrell explains that Dr. Salzman was angry about them asking for corrections but seriously, this isn’t Salzman’s first rodeo so what gives, why was it so much of a problem to deal with such simple questions as to how many people in the study and why only males? (67)

MR. FARRELL:  “Andy wasn’t too concerned but was pissed off – he was angry about it and said ‘most of those questions are already answered in the documents, maybe I need to kind of rub their nose in it and refer them to a particular page and paragraph and sentence.’”  (62)

ALUMINA

Around this time Alumina also provides a small financing deal with us but, our share price is so low that their enthusiasm is considerably less than stellar.  It is a total $5 million deal, but, we have to provide them with free trading shares whereas simply giving them shares means they have to hold them for four months.  So now Mr. Farrell goes out and tries to find shareholders to borrow the shares off of as Dr. Salzman, (the guy who is so certain Claritas is headed for the moon) 57. is not enthusiastic about his shares being used for this purpose, and Farrell doesn’t have enough unencumbered to even make a dent in it.  (44)

In the end, Dr. Salzman puts up a small amount and the funding comes to a hundred fifty  thousand dollars.   It comes as no surprise that it would supposedly be eaten up by the cost of the Phase 1 that was supposed to have been already paid for by the Obsidian financing that was supposedly paid for by the tax refund.

Press Release February 22, 2022:  “The net proceeds from the initial tranche were spent primarily for costs associated with the Company’s Phase 1 clinical study of R-107.”  (51)

Remember this one - “The net proceeds from the initial tranche were spent primarily for costs associated with the Company’s Phase 1 clinical study of R-107.”  

My take on that is that we paid say …. $500 k and this $150 adds onto it to make it $650 or maybe even higher.  But we’ll let this slide until the end as I don’t want to give away the surprise.

(21) SEPTEMBER 28, 2021 PHONE CALL – MR FARRELL -  CMAX  GIVING UP OUR SEAT TSX AND DEBENTURE WITH OBSIDIAN

Strange that an organization who does deals everyday with companies like Obsidian and Claritas are unable to endorse our deal yet, somehow our deal was not accepted. 

On top of that, one would think that having close to a million dollars from the Australian tax refund would have been enough to at least hold our seat at CMAX but nope.  We lost that position which brought us to the next part of the Claritas Follies - the search for our next bogus facility for Phase 1.

Anyhow, hindsight shows that we had ‘issues’ with the financing.  Obsidian, the guys whom we had gone through the months long lead up to - and conducting of the big ‘AGM’ where we did the reverse split of 20:1 and the Keystone Cops routine with the TSX over the warrants escapades of 20:1 or 1:20 question, finally gave their approval on the cash for shares deal.  Problem was, despite being drawn up by Farrell and BGL, the TSX guys in Calgary who rule on this didn’t like the percentages and amortization of payments so stalled us for a couple of months while the formulas were clarified.

“I told CMAX we didn't make the payment last week and now we're into this week and I haven't heard back from TSXV so it's really possible they may say ‘well you know we tried the contract with you guys again boys you said you would pay it you didn't and we're going to terminate the contract and give this spot to somebody else’ and, it's entirely possible that will happen.”

“It's really very difficult position because of what the TSXV is doing right now”

FARRELL:   We asked the lawyers to try and talk to the TSXV today because exchanging emails is very inefficient.  They sent us some e-mails listing all their questions, comments and concerns and then the next day after all the lawyers have reviewed it we sent the response back and 48 hours goes by.  Then the response to the response and next thing, the whole week has gone by and nothing has been accomplished and we're kind of going down that path right now.

One of the issues has to do with the interest rate. The debenture is a is a loan and they say that the maximum interest rate that they will allow is 24% and, that 24% is not found anywhere in the policy.   The way this debenture works is the investor buys it from us for $1,000,000 and it has a face value of a million 175 and we have to pay that million 175 off in monthly installments beginning next year and all one million 175 has to be paid off by the 12 month maturity date so if you borrow a million and over the course of 12 months you pay back a million 175 that is like a simple interest rate of 17 1/2%.

So let let's say that the TSXV actually accepts that, then the next thing they do is they say  there's a 10% interest rate 10% default interest rate so if the original interest rate is 17 and a half percent and then you add the default rate to it - now you're at 27 1/2% which is in excess of the 24% that they will allow.  They want us to put together an excel spreadsheet that shows how much money the company will pay every month and the lawyers said ‘look, that excel spreadsheet doesn't make any sense for a whole bunch of reasons #1, if the company defaults on the payment then it's not going to make it a larger payment including the default interest rate.’   

#2 is that the loan is collateralized with shares that Salzman and I own and in the event of default the lender would take the shares and sell the shares to apply the proceeds against the principal to reduce the principal so no need for 10% unless the proceeds from the sale are insufficient so they want they want us to include that in the spreadsheet  the repayment of principal from the sale of these collateral shares and we have no idea what the what the shares are going to be sold for.

I don't want to get too deep in the weeds in this but they have to reduce the default that the lender would have to reduce the default interest rate from 10% down to about 5.4% OK right and the lender I think is willing to do that if we make some other concession to them.

During this time, CMAX, the Australian facility where we were going to conduct Phase 1 had enough.  They sent us a final warning saying shit or get off the pot because we have other companies who need to do their Phase 1 so pay up.

So, in my phone calls with Farrell over the next few weeks I explained to him of our need for Phase 1 to which he agreed over and over. 

My efforts to find a place where we could to this in Timbuktu fell on deaf ears as it had to be Australia as we would get a tax refund of 43% the following year.  My reasoning was that 'who cared for $430k when our share price went up to a dollar from twenty cents (an increase in $30 million) but no, it had to be an Australian company.

It came to  the point where if I wanted a ‘YES’ I merely brought up the need for Phase 1 and he chirped out an emphatic ‘YES’ like a dog doing a trick.  Salzman agreed in his quotes (supplied above) and, in the phone calls as Farrell explained to me what Salzman said.  We all knew that time was of the essence to get this off the ground, yet Salzman would only deal with an Australian facility. 

As Bob put Salzman’s Australia demand to me in frustration ‘It’s like the Australian tail wagging the dog.”

They settled on Scientia, nice enough people I guess and so, began to work with them or, against them or, they against us or Salzman against everybody depending on how you look at it.

(22) OCTOBER 19, 2021

THE COMPANY ANNOUNCES CLOSING OF CONVERTIBLE DEBENTURE FINANCING WITH OBSIDIAN GLOBAL GP, LLC (“OBSIDIAN”) FOR NET PROCEEDS OF USD $930 THOUSANDS.

(23) NOVEMBER 18, 2021

Despite the surety of the study being cancelled it is not formally announced until NOVEMBER 18 2021 CLARITAS TODAY PROVIDED AN UPDATE REGARDING THE EXPECTED TIME TO COMPLETION OF ITS PHASE 1 CLINICAL STUDY OF R-107, THE COMPANY’S PROPRIETARY, LIQUID, NITRIC OXIDE-RELEASING COMPOUND (THE “PHASE 1 STUDY”). PHASE 1 STUDY TO BE COMPLETED AT SCIENTIA CLINICAL RESEARCH

“Following completion of the Phase 1 Study, we (Claritas) will initiate our planned Phase 2a study of R-107 in treatment of pulmonary arterial hypertension (“PAH”), and apply for U.S. governmental grant funding for the further development of R-107 for treatment of COVID associated lung disease.” 

(44)  JANUARY 12, 2022

CLARITAS SECURES $5 MILLION EQUITY FINANCING FACILITY WITH ALUMINA PARTNERS (ONTARIO) LTD.

The Agreement will provide Claritas with two-years of working capital, with initial proceeds allocated to the remaining costs of the Phase 1 clinical study of R-107, which the Company expects to complete in Q1 2022.

“Claritas intends to seek non-dilutive governmental grant funding to develop R-107 for the treatment of COVID-related ARDS and COVID-related sepsis.”

“The Company will apply for such funding with the Biomedical Advanced Research Development Authority (“BARDA”), an agency within the U.S. Department of Health and Human Services.”

“The resources available to the Company under the Agreement with Alumina will be used to move forward with the development of R-107 for treatment of both PAH and PPHN, advancing R-107 into Phase 2a clinical studies next year in both indications.”

"We are excited that Alumina recognizes the potential of R-107, our proprietary nitric oxide-releasing compound being developed for pulmonary disease in adults and newborns, as well as for COVID-related lung disease. Alumina is prepared to provide up to $5 million of working capital to ensure that the Company can deliver on this potential. This strong financial backing will provide us with the flexibility and resources we need to achieve expected value-driving milestones over the next 2-years,” stated Robert Farrell, President and CEO.

Mr. Farrell went on to say, “The advantage of this transaction structure is that the Company will not take down the entire $5 million at this time, while our share price is low, and the Company is undervalued. Rather, in order to minimize shareholder dilution, we will only judiciously access this financing facility over time as funds are required. If, as expected, we achieve the value-driving milestones mentioned, and if our share price and valuation reflect this value, we will be issuing fewer shares and warrants per dollar of funding accessed under this facility. We view Alumina as a partner in helping us to build value, and we view this financing facility as a win-win transaction for the Company and its shareholders.”

“We are delighted to support Claritas as they work to bring R-107 to market,” said Adi Nahmani, Alumina’s Managing Member. “We are certainly not the first to recognize the need for a nitric oxide-releasing therapeutic for a number of applications, both chronic and acute. Indeed, much of the early development was funded by BARDA, the DARPA of life sciences. In the face of the evolving challenges posed by COVID, however, the need for R-107 is that much more urgent, and the applications that much more promising. We are pleased to be investors in this technology, and look forward to seeing management progress through the clinical trials required to add this compound to the modern medical pharmacopeia.”

(62) FEBRUARY 21 2022 ETHICS COMMITTEE QUESTIONS & CONCERNS

PHONE CALL MR. FARRELL

MR. FARRELL:  “When I read it I was quite concerned about a few things here and there.

Andy wasn’t too concerned but was pissed off – he was angry about it and I said ‘what about this what about that and other things’ and he said ‘most of those questions are already answered in the documents maybe I need to kind of rub their nose in it and refer them to a particular page and paragraph and sentence’ and so it shouldn’t be a bit of work and it shouldn’t take all the rest of the week to answer that properly.”

 

ETHICSCOMITTEEREPLY.jpg.b3831515faa0d6cc4d8563faff417fa0.jpg.59534693297b082eb0bc3a174d3b966c.jpg

 

(69) JULY 16  2021  PHONE CALL - MR. FARRELL – DR. SALZMAN ON VACATION

“Drew:  I'm trying to do an interview with Salzman on Phase 2 for COVID and he's said ‘yeah let's do it’ but then when I try and nail him down for a date and a time he's incommunicado.  Is he that busy right now doing stuff that I can't get ahold of him?”

“He's taking his wife on a vacation she read him the riot act as he was working while they were on their last vacation and she wasn’t happy with that.”

(73)  MAY 1 2022 PHONE CALL WITH FARRELL – HOLD UP AT SCIENTIA:  


FARRELL:   Anyway, Salzman thinks we owe him a whole bunch of money and I’m telling him we don’t.  We owe him a little money but not a lot of money anyway he's all pissed off - so he is  more or less on strike here until we pay him some more money which, is impossible because we don’t have more money.

So anyway, that’s one thing that's causing a delay – another is just the personalities involved in Australia.  So in Australia we're working primarily with two separate companies one is called Scientia where the patients will go for two days …. three days whatever … a week …

And then the other one is called Data Farm … and Data Farm is the one that kind of manages the collection of all the data and they’re both involved.  Data Farm is very easy to deal with, they're trying to push everything along as fast as they can and it's going great.

At Scientia there's a woman named Souk and Souk is just impossible.  She's just trying to find every fucking problem that you know - this is a problem that's a probably big problem and so between Salzman sort of dragging his feet and Souk finding problems were kind of bogged down.

I'll give you one example and you heard this before and that's to do with the injection … the dosage injection for the first cohort and maybe for the second as well.  So what their practice at Scientia is when they administer a dose according to some protocol what they do is they draw the drug into the syringe and then they look at it and this syringe has graduation marks on it and so if you're supposed to administer a half or a milliliter whatever you know you can draw the drug in and then you like squirt some out to the end of you the needle and that's the way they do it.  And so beginning about two months ago she said that they weren't going to be able to administer the low dose at all because the low dose is so small when you draw it into the syringe you can't see it actually and therefore, she said there was no way to know if you're giving the correct dose or not.

So anyway her and Salzman had a big debate about that and Salzman got some sort of special syringes from some company in the Netherlands and those got sent to Souk at Scientia but,  the syringes from the from the Netherlands, the way you’re supposed to measure the dose is not by visual, not by you know visually looking at this syringe but instead by weighing it on some very accurate device.

So Salzman said that he could solve the problem for the first cohort and maybe for the second since you are going to have potential problems determining the dose visually we are going to do it by weight.

So Souk got back to him and said they don’t do it that way and in order to do that it would take them two or three months to get the protocols approved and bring in people trained and all that so could take two or three months.

So I called the people at Data Farm and said I don't know what the hell she's doing.  We're paying her company Scientia - we’re her clients and she's doing everything she can to throw road blocks in the in the way here and I asked the guy at Scientia, guy named Luke, asked him to talk to her boss to straighten it out.  So it seems like that may have got straightened out

 But it looks like we're going to have to buy for them this special weighing device but it looks like we're past that problem and now she's onto the next one and the one after that she problems and this one has to do with this one has to do with documents.

There's two documents that they need one called the Laboratory Manual and one called the Pharmacy Manual.

The Pharmacy Manual, from my understanding of it is the drug is shipped from Israel to Australia and gets delivered to the pharmacy where it is supposed to like it out of the package and put it into the refrigerator etc.

And then the laboratory manual, I think what that says is that when you administer the drug to the patient you need to take blood from the patient periodically over the next 48 hours.

And with those blood samples you are supposed to deal with those by packing them on dry ice in a special kind of box and send it to the laboratory for analysis.  And so both of those manuals have been written (the laboratory and pharmacy manual) and Souk is nitpicking them to death saying something like ‘on page four it says this and it should say that blah blah blah’ so now we're all wrapped up in that.

Salzman is saying ‘fuck it’ he’s very angry with her, she’s angry with him and they’re angry with each other and they’ve got a little battle about something and they don't like each other and Salzman is saying screw this, I'm not going to deal with this bitch until you pay me and all that kind of stuff

So anyway right now we’re in ‘stupidland’ and, that's not going to be helpful to tell anybody that I mean to say ‘Oh well the Phase 1 is being delayed because these two doctors are battling with each other over how to determine the proper dose and over some fucking documents.

Right now what I got to do to get finish this accounting thing to show Salzman that he got paid more than he thinks he did and when I finished that there’s a bunch of emails between Salzman, Souk and this guy Luke and I’ll send you a couple of screen shots to give you a better sense of what’s going on as it's just stupid other stupidity.

If you told them the truth like I just told you it sounds like a gong show, like you have the  Keystone Cops running the thing.

This whole problem that we're talking about kind of goes back like three months four months maybe longer than five months it goes back to this Ethics Committee.  so Salzman wrote up the protocol and I think he said originally there's going to be 4 cohorts patient states for total of 32

and then the Ethics Committee said no, your starting dose is too high so they added a fifth  cohort in at the bottom and an ultra low dose and the dose is so low that Souk can’t even see it in the syringe.

Souk, what her solution is she wants us to go back to the Ethics Committee and ask them to drop  the bottom dose and Salzman said we might as well shoot ourselves in the head because the Ethics Committee will be mad about that.  It'll take them at least a couple months to figure out how to deal with it and then, he said, ultimately, they'll tell us ‘no.’ They'll say that they are the Ethics Committee and they think they need to start at a lower dose and that means it's asking for this ultra low dose.  Which in reality is kind of stupid because it's so low that you may not even be able to detect in the person's blood.  Salzman said that that dose is so low that when you do the blood draws and send it to the laboratory it'll probably show no drug in the body.

I mean it all starts off with the stupidity of the Ethics Committee going through this ultra ultra low dose now and then then Souk saying it’s so small that you can't see it and then Salzman saying OK well let's weigh it and then Souk saying well if we're going to weigh it that's going to take us two or three months to learn how to do that properly and incorporate it into our standard operating procedures and training the personnel

DREW:   Can we just get our money back?

FARRELL:   I don't want to do that because it didn't you and you have to go find another hospital to do that it's going to take months and months and months

DREW:   how much did how much could we get back from these guys?

 FARRELL:   Not a lot cause we never paid them a lot.  We paid Scientia I think $34,000.  Going back further even before the Ethics Committee there was the decision to do this in Australia and it's because of the rebate so you kind of get this thing where the rebate is the tail wagging the dog here.

"I possess a device, in my pocket, capable of accessing the entirety of information known to man. I use it to look at pictures of cats and get in arguments with strangers"

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THE LAST PAYMENT TO SALZMAN

But, just in case anybody thought that we didn’t have any money, on April 4 2022 we hand over another $75k to Salzman in the form of tradable shares. (54)  This I believe is another Claritas milestone – the last payment to Salzman. 

“Robert Farrell, President and CEO of Claritas stated that, “Salzman Group is manufacturing R-107, has assisted with the design of our Phase 1 clinical study, and is assisting with our interactions with regulatory bodies in the U.S., Australia, and the EU.”

“their long-standing commitment to Claritas, and their belief in the potential of the Company”

A question, rhetorical of course as Salzman is now incommunicado along with Mr. Farrell;

The way I read that last quote “their long-standing commitment to Claritas, and their belief in the potential of the Company”  is that Salzman would fall on his sword before he would fail Claritas and, knows that the company is profitable sooner or later. 

So why the requirement that he continually be paid upfront with cash that would have saved the company by allowing us to use it to conduct our Phase 1 trial?

And also wondering, since he was so committed, why did he not provide the EC with the proper information to begin with back in February?   (62) (67)


The back and forth between Salzman and the EC in Australia goes on for a while longer and then things die down.  On April 5 2022 we get the news that the Ethics Committee has approved our Phase 1 study.  (55)

OUT OF THE PAN …

This is touted as great news but, it’s simply a case of ‘into the fire’ as the Ethics Committee, before turning this over to Scientia have stated they now need a low dose cohort added onto the existing four cohort study.  This creates huge problems both external and internal as Mr. Farrell explains in a phone call May 1 2022;   (73)

FARRELL:   “Salzman thinks we owe him a whole bunch of money and I’m telling him we don’t.  We owe him a little money but not a lot of money,  anyway he's all pissed off - so he is  more or less on strike here until we pay him some more money which, is impossible because we don’t have more money.”

“At Scientia there's a woman named Souk and Souk is just impossible …  so between Salzman sort of dragging his feet. She said that they weren't going to be able to administer the low dose because it is so small that when you draw it into the syringe you can't see it and there was no way to know if you're giving the correct dose or not as the way you’re supposed to measure the dose is not by visual, but instead by weighing it on some very accurate device.”

“Souk said they don’t do it that way and in order to do that it would take them two or three months to get the protocols approved and bring in people trained and all that so could take two or three months.”

“There's two documents that they need one called the Laboratory Manual and one called the Pharmacy Manual and Souk is nitpicking them to death saying something like ‘on page four it says this and it should say that blah blah blah’.”

“Salzman is saying ‘fuck it’ he’s very angry with her, she’s angry with him and they’re angry with each other and they’ve got a little battle about something, and they don't like each other and Salzman is saying screw this, I'm not going to deal with this bitch until you pay me and all that kind of stuff.”

“So anyway right now we’re in ‘stupidland’ and, that's not going to be helpful to tell anybody that I mean to say ‘Oh well the Phase 1 is being delayed because these two doctors are battling with each other over how to determine the proper dose and over some fucking documents.”

Unknown to any of us it actually got worse as recounted to myself by an FSHOC investor who spoke with Mr. Farrell in June 2022.  He recounted an argument with Salzman who asked to be paid monies owed to him (approximately $180k) prior to proceeding with Phase 1 Trials. Mr. Farrell stated he did not have that kind of money to pay Dr. Salzman, also at that time from the Shareholder’s understanding they were no longer on speaking terms.

Back to my chat with Mr. Farrell, I was shaking my head and threw up my hands .. “Can we just get our money back?  “How much could we get back from these guys?”

Let’s pause for a moment and go back to where I said to remember this quote

“The net proceeds from the initial tranche were spent primarily for costs associated with the Company’s Phase 1 clinical study of R-107.”

And I said it was probably something like a half million or maybe $750 .. or even more?  Well, you’re going to find out right now how much Farrell and Salzman over the past two years and various financing gigs have put towards Phase 1.

What came out of Farrell next was reminiscent of that scene from the Shinning where Wendy finds the hundreds of pages of ‘All work and no play makes Jack a dull boy” that her husband had been working on for the past five months.

I was expecting something like $700,000 but he said;

 FARRELL:   “Not a lot because we never paid them a lot.  We paid Scientia I think …..

$34,000. 

It’s been two years, we went through reverse splits,  Private Placements, debentures, a couple of financings and a couple of tax refunds and all we’ve managed to throw at this essential study, the one thing that would bring our share price out of the gutter and move us forward is $34,000.

 

(54)    APRIL 4 2022

CLARITAS ANNOUNCES ISSUANCE OF SHARES FOR SETTLEMENT OF DEBT

“Claritas today announced it has submitted to the TSXV for approval the terms of an agreement entered into today between the Company and a creditor of the Company under which it will issue shares to such creditor in settlement of amounts owed to such creditor, subject to TSXV approval.

Claritas will pay to Salzman $75,000 of common shares of the company in payment of approximately 45 per cent of the amount currently owed to Salzman under the service agreements and has submitted the terms of the Salzman shares for debt agreement to the TSX-V for approval. “

“Robert Farrell, President and CEO of Claritas stated that, “Salzman Group is manufacturing R-107, has assisted with the design of our Phase 1 clinical study, and is assisting with our interactions with regulatory bodies in the U.S., Australia, and the EU. These agreements provide Claritas with access to Salzman Group’s research scientists and drug development experts on an as-needed, part time basis, thereby providing a lower cost structure than Claritas would incur by hiring its own team of such experts.”

Fair enough .  No cash. But wondering, why did he not provide the EC with the proper information and PCI was originally doing this for us so why were we not informed they were not?

(55)   APRIL 05 2022

CLARITAS ANNOUNCES APPROVAL FROM AUSTRALIAN ETHICS COMMITTEE TO BEGIN PHASE 1 TRIAL OF R-107 APRIL 05

SAN FRANCISCO, CA and TORONTO, ON, April 05, 2022 (GLOBE NEWSWIRE) -- Claritas Pharmaceuticals, Inc. (TSX VENTURE EXCHANGE: CLAS and OTC: CLAZF) (the "Company" or "Claritas") today announced that the Australian Human Research Ethics Committee has approved the Company’s submission for the Phase 1 clinical study of R-107 to be conducted at Scientia Clinical Research in Sydney, Australia. Claritas will now immediately begin enrollment in the study.

Claritas has received approval of its Phase 1 clinical study of R-107 from the Australian Human Research Ethics Committee (the “HREC”).

HREC approval is the final regulatory step prior to initiation of the clinical study.

Enrollment of subjects in the clinical study will begin immediately.

“More than $15M of the $20M cost for the preclinical development of R-107 was funded by the U.S. Department of Health and Human Services under a contract with the Biomedical Advanced Research and Development Authority (“BARDA”). Following completion of the Phase 1 study, Claritas will again seek such funding for the costs of Phase 2 studies of R-107 in the treatment of sepsis and ARDS. The worldwide market for treatment of sepsis was valued at more than USD $600 million in 2020 and is projected to grow to USD $1.6 billion by 20313, and according to an analysis by Reports and Data, the global ARDS market was valued at USD 583.8 million in 2018 and is expected to reach USD 934.8 million by the year 2026.”

 

(62) FEBRUARY 21 2022 ETHICS COMMITTEE QUESTIONS & CONCERNS

 

PHONE CALL MR. FARRELL

 

MR. FARRELL:  “When I read it I was quite concerned about a few things here and there.

Andy wasn’t too concerned but was pissed off – he was angry about it and I said ‘what about this what about that and other things’ and he said ‘most of those questions are already answered in the documents maybe I need to kind of rub their nose in it and refer them to a particular page and paragraph and sentence’ and so it shouldn’t be a bit of work and it shouldn’t take all the rest of the week to answer that properly.”

ETHICSCOMITTEEREPLY.jpg.b3831515faa0d6cc4d8563faff417fa0.jpg.cb586ec39c6db08d39cb3ec0902eec37.jpg

(67) FEBRUARY 21 2022 - PHONE CALL - MR. FARRELL

QUESTIONS FROM SCIENTIA

I asked Mr. Farrell how our Phase 1 was coming along and he said that the Ethics Committee had sent us some questions.  He explains;

“When I read it I was quite concerned about a few things here and there

Andy wasn’t too concerned but was pissed off – he was angry about it and I said ‘what about this what about that and other things’ and he said most of those questions are already answered in the documents maybe I need to kind of rub their nose in it and refer them to a particular page and paragraph and sentence and so it shouldn’t be a bit of work and it shouldn’t take all the rest of the week to answer that properly.  He and he called up Scientia to rant grave about it.”

"I possess a device, in my pocket, capable of accessing the entirety of information known to man. I use it to look at pictures of cats and get in arguments with strangers"

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THE MAGNIFICENT 4 DON’T RIDE AGAIN

Around the beginning of May, our share price spiraling downwards and facing an existential challenge Mr. Farrell reached out to me to rollover a debenture myself and a few others had taken part of the previous year.  Mr. Farrell was quite enthusiastic about it and, was also attempting to get us to put in more cash.  When I explained that this wouldn’t be possible the deal was made, and we were about to sign and then, Mr. Farrell went dark. 

he shut the process down and went incommunicado for a couple of months.

Our very expensive website built by Dr. Salzman’s daughter had been taken down somewhere around April along with our Facebook Page which still exists but, is offline and Mr. Farrell and Salzman both had gone incommunicado.  The Cease Trade Orders came in starting June 10, 2022 (58)  soon followed by the announcement that Phase 1 is, for all intents dead.  (59)

And then some truth;

JUNE 24 2022 CLARITAS PLACES PHASE 1 R-107 STUDY ON HOLD  (75)  

HF Bob.  Been two years and you’ve literally paid yourself and handed our ‘collaborator’ Salzman the cost of Phase 1 twice over so now you finally admit it isn’t going to happen?

“The company's lack of financial resources has also impacted the company's research and development activities.”

“Specifically, the company has not been able to pay fees due to the third party service provider, the Salzman Group, that the company retained to provide certain research and development activities, including manufacture of drug substance and overall management of the company's phase 1 clinical study of R-107.

Consequently, the Salzman Group has stopped work on the phase 1 clinical study, and the company has placed the phase 1 clinical study of R-107 on hold. “

Yes, like he really seemed dedicated to see R-107 developed.  Gets questions from the Ethics committee on HIS Phase one study and he leaves half the questions blank.

“The company will not be able to complete the annual documents and Q1 filings, nor will it be able to restart the phase 1 clinical study of R-107, until it either raises additional capital or sublicenses to a third party pharmaceutical company its rights to develop R-107 for the treatment of pulmonary arterial hypertension (PAH). The company is seeking to raise additional capital and is working with a United States-based firm that advises clients on private debt, equity capital, and merger and acquisition transactions.”

Investors, those who faithfully gave their hard earned savings to Salzman and Farrell were left wondering what was going on.  This was people’s lives. Certainly there is risk but one expects a minimum level of competence and direction rather than management using our life savings as their slush fund while they do NOTHING to forward drug development.

To this author and the group he represents, it’s one thing to not be able to perform but quite another to just leave those who placed their trust in you and your dreams to hang, without telling them what is going on.

I tried to contact Mr. Farrell for months and no reply then, I emailed him stating I was going to attempt to arrange for a deal with our license if I heard nothing back, he sent me this;

NOVEMBER 16, 2022,  EMAIL 

“Hello Drew, Yes, we have tried and failed to sublicense to pharma companies the rights to R-107 that the Company received from Salzman Group. (60)

“Claritas has no working capital and has not had any for many months.  We tried to raise funds to continue operations but did not succeed. As of today's date, we have not been able to find a pharma company willing to take a sublicense for any market or any indication.  We approached many potential licensees, some of which conducted preliminary due diligence, but in the end all of them decided to take a pass. At this point, it is likely that Salzman Group will require that we return the license to them, after which Claritas will cease operations. - Regards,  Bob”

We took a look see around the internet and, lately Salzman has been busy with his role at Wonderfeel and even dabbled in another company for a bit  (71)

August 11 2022

INNOVATION1 BIOTECH APPOINTS CHIEF SCIENTIFIC OFFICER ANDREW L. SALZMAN, M.D. TO ITS BOARD OF DIRECTORS

And two months later - October 19 2022

INNOVATION1 BIOTECH INC. ANNOUNCES RESIGNATION OF ANDREW SALZMAN

In and out like Ron Jeremy, he’s even made a movie.

I’ve tried to connect with him but he turned me down.  (68)

I’ve so far been unable to locate Farrell.  I did send him an email recently asking to speak with him to ask a few questions but so far, he has yet to respond which is no surprise as he had previously pulled this trick and then said that there was something wrong with his email functionality.

JANUARY 23 2023 Robert Farrell  (72)

Hi Bob, Hope things are going well with you. Myself I’ve been getting some questions from the shareholders about the company and they are looking for some information.

I was hoping that we could set up a phone call so you could clarify a few things.

Let me know, take care,  Drew.



And that’s about it.  No announcement, no explanation, just silence.

Which is why I wrote this – because the FSHOC wish to have an explanation and since the company officers and ‘TEAM’ are not providing anything remotely like an explanation.

 

(60) NOVEMBER 16 2022 EMAIL: MR. FARRELL

“Hello Drew, “Yes, we have tried and failed to sublicense to pharma companies the rights to R-107 that the Company received from Salzman Group.” 

“Claritas has no working capital, and has not had any for many months.  We tried to raise funds to continue operations, but did not succeed. As of today's date, we have not been able to find a pharma company willing to take a sublicense for any market or any indication.  We approached many potential licensees, some of which conducted preliminary due diligence, but in the end all of them decided to take a pass. At this point, it is likely that Salzman Group will require that we return the license to them, after which Claritas will cease operations.

Regards,  Bob”

 

(68) MAY 18 2022 EMAIL DR. SALZMAN:

On May 18, 2022, at 16:09, drew bedson <drewbedson@hotmail.com> wrote:
 



“Hi Andrew, was wondering if we could have another brief half hour chat about how Phase 1 is going, where we should find ourselves in six months or so and any other new things you might have on the drawing board.

I understand you are probably extremely busy but, only a half hour - please 😇 Drew”

Andrew Salzman

Wed 2022-05-18 8:11 AM

Drew

 

“Bob is handling all the interviews now.“

Andrew L. Salzman, MD

 

(72)  JANUARY 23 2023 Robert Farrell

Hi Bob, Hope things are going well with you. Myself I’ve been getting some questions from the shareholders about the company and they are looking for some information.

I was hoping that we could set up a phone call so you could clarify a few things.

Let me know, take care,  Drew.

 

"I possess a device, in my pocket, capable of accessing the entirety of information known to man. I use it to look at pictures of cats and get in arguments with strangers"

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  • DREW changed the title to CLARITAS - DIRECTORS CUT EXTENDED HARDCOVER EDITION
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Thank you for that excellent history and roundup of facts.  I’m no less angry or depressed, but at l we sat in more informed. 
 

it makes me wonder just how much faith Bob and Andrew actuayhad in the product to make them lots of money and save lots of lives, considering how much more effort was put into feathering their own nests rather than aiming for the big payday.  Certainly seems in other company had any faith in 107 either as they could have brought Claritas for next to nothing.

 

thanks again for all the work and effort Drew

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Just laying the base for the action to follow so everybody is on the same page.  Patience, things should begin in a few days.

"I possess a device, in my pocket, capable of accessing the entirety of information known to man. I use it to look at pictures of cats and get in arguments with strangers"

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And yesterday, 23 May 2023 Dr Cuzzocrea sent an email to both Joan Fancy and myself stating that he was NOT an active member of the BOD but rather there as a figurehead and had only attended two meetings (presumably online and brief) and did not get any money or was privy to any of the goings on at the company.

"I possess a device, in my pocket, capable of accessing the entirety of information known to man. I use it to look at pictures of cats and get in arguments with strangers"

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You bet. Wish the others were more active but,  oh well.  
 

I’m done. Best of luck.  

"I possess a device, in my pocket, capable of accessing the entirety of information known to man. I use it to look at pictures of cats and get in arguments with strangers"

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