Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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CHAD THERAPEUTICS, INC.
(Name of Registrant as Specified in Its Charter)
McDowell Investments, L.P.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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AN IMPORTANT MESSAGE TO THE
SHAREHOLDERS OF CHAD THERAPEUTICS, INC.
FROM
MCDOWELL INVESTMENTS, L.P.
| July 25, 2003 |
Dear Fellow Shareholder:
McDowell Investments, L.P. (“McDowell”) beneficially owns 420,200 shares, or approximately 4.2%, of Chad Therapeutics, Inc’s (“Chad”) outstanding common stock. We are concerned about the low and continual decline of Chad’s stock price and the inability of the current directors and officers to correct the situation. MGM Holdings, LLC, a Missouri limited liability company (“MGM”), is the general partner of McDowell and Monte McDowell is the sole limited partner of McDowell. Kevan D. Acord is the manager of MGM and Mr. McDowell is the sole member of MGM.
The reasons for our dissatisfaction is easily gleaned from Chad’s historical performance. On March 28, 2002 (the final trading day for the 2002 fiscal year), Chad’s stock closed at $3.35 per share. On March 31, 2003 (the final trading day for the 2003 fiscal year), Chad’s stock closed at $2.00 per share, a decline of more than 40%. During this time senior management was given almost $150,000 in bonuses, not including 15,000 stock options all while losing approximately $13,500,000 in shareholder equity. We strongly believe that such dismal performance should not be rewarded with incentives to continue to do such a lousy job.
To address the situation, we have nominated Monte McDowell for election at the upcoming Annual Meeting of Shareholders scheduled to be held on September 9, 2003, at the Hilton Woodland Hills Hotel at 10:00 A.M., Los Angeles time. We have filed with the Securities and Exchange Commission a preliminary proxy statement with respect to our nominee. We intend to use the proxy materials to solicit proxies from our fellow shareholders to elect Monte McDowell. If elected, he is committed to fulfilling his fiduciary duties on behalf of all shareholders of Chad. Monte McDowell will be a minority voice pleading for increased shareholder value versus current management’s self-enrichment at our expense.
When you receive our proxy materials, we urge you to read them carefully because they contain important information. We urge you not to return any management proxy until you receive our proxy materials. If you are unsure of the status of your proxy, please contact your broker or investment advisor.
You may access copies of our preliminary proxy materials at www.sec.gov. You also may call our proxy solicitor, N.S. Taylor & Associates, Inc., at 1.866.470.3400 to obtain a copy of the preliminary proxy statement filed with the SEC.
Thank you for your consideration.
| McDowell Investments, L.P. | |
| /s/ Kevan Acord | |
| Kevan Acord, | |
|
Manager of MGM the General Partner of McDowell |
|