Protogroup/Regen / Refusing to return investments
History of my dealings with Mr CHRISTOS FOTIADIS
I first met CHRISTOS FOTIADIS in on the 13th Dec ’06 and was introduced to him by Mr Bob Bernal, who was a trusted friend. At the time of meeting CHRISTOS FOTIADIS he was having an office deal dispute with Mr. John Holton and because of this was considering sub renting an office from Mr Bob Bernal, to solve his Office dilemma. I had heard from a friend of bob bernal, Mr Richard Cane, that Mr Bob Bernal was delinquent in his rent and that it may be wise for Christos Fotiadis to consider checking before going into another sub letting situation. Because of the opinion of Richard Cane I believed Mr Bob vernal to not be so honest. Due to my adive, Mr CHRISTOS FOTIADIS found that it would have been very dangerous to enter into such an arrangement with Mr Bob Bernel, so he backed down. This left him without an office to move to, so I tried my best to help him through this situation and offered use of my office to him. No financial remuneration was requested or expected. I did this because I felt sorry for him and wanted to help him. I know know I made a misjudgement and am having to live with this fact.
Due to both his enthusiasm in his product and also his bad luck I offered my office to Christos Fotiadis to use until he was able to recover from his situation and get some sales. As I mentioned previously, I did not ask any financial renumeration and he never paid me a single Yen for any facilities he used in my office neither did he contribute any money towards the rent. I was however promised a favorable share buying price, if and when I invested in his company, Protogroup.
During the time Mr Fotiadis was using my office, he was having financial problems and at one time did not have money to pay one of his employees, Mr Fumito Takahashi. Since I could sense that Mr Takahashi needed this money, I kindly loaned that money to him (Y50, 000). At another time he invoiced Y5M to Microsoft and I pointed out that he did not include consumption tax. Due to my intervention I saved him Y250, 000, since without me mentioning it, the invoice would have gone out without the tax being added. He also needed a timely translation done, for which I arranged, paid for (Y75, 600 on the 6th Feb ’06) and had delivered to him within his deadline. Mr CHRISTOS FOTIADIS also did not have enough money to pay for an apartment, which he was arranging via a real estate company, so I lent Y436, 000 on the 9th Feb ’06. Mr Fotiadis was also was having very serious problems paying his developers in the US so we came to an arrangement, where I would pay him a total of Y4, 162, 600 yen and he would extend an additional amount as goodwill for services rendered (Y141, 000), bringing the total to Y4, 303, 600 for which he would give me 72, 427 shares in his company. The make-up difference of Y3, 498, 000 was paid to his Mr Fotiadis’ Chase Manhattan account, by bank transfer on the 22nd Feb ’07. Since I had to pay a processing feel for getting this money from my bank, to pay to him in a timely manner, Mr CHRISTOS FOTIADIS agreed to pay the bank fees of Y157, 500. Mr Fotiadis told me his shares were being valued at $1 per share but he would sell to me at $0.75 per share. Mr Fotiadis also promised me an additional bonus of 25, 000 shares, I felt I was possibly getting a good deal, since he seemed hopeful that his company would return revenue before the end of the year. The total amount I paid him in actual money was Y4, 303, 600, for which he promised me 72, 427 share units.
During the time Mr CHRISTOS FOTIADIS was using my office I was privy to many of his outbursts, rambling and non professional childlike behavior that he often exhibited. At one time he said, “I will have tremendous power with my product (Regen), since clients will give me confidential data and this could be very valuable, imagine what I could do with such information”. At the time, I considered him a friend and I just discarded it as a frivolous childlike remark but due to his future actions and behavior towards me, I have to consider that he is capable of doing possible harm, towards potential and/or existing clients if he has a dispute with them, since he is treating me with the same type of contempt and lack of gratefulness despite that amount of kindness and help extended to him. Also, despite me being an investor, his behavior towards me has been, crude, rude, unprofessional and without any feeling of respect for the fact that I extended money to him and his company. I am confident and have proof that he treats other investors with the same distain.
On 9th Sept 2007 I sent a mail to Mr Fotiadis saying that I really do not want to be an investor anymore (he knew I was having second thoughts about the investment and was not happy) and I politely asked if I could get my money back since I was having my own set of financial problems with other people I extended money to. I only asked for the money I put in and did not ask for any additional money for services or help rendered. This is what he wrote back to me on the 10th Sept 2007:
“In any case, your email couldn’t come at a worse time. Shiomi has yet to put more money in and his money that he put in has nearly run out. We have a couple weeks worth left, then it’s gone
He’s sort of being a dick and trying to get a super-duper sweet deal, beyond what I think is reasonable…but I am negotiating with him as we speak. I think we can come to an agreement, but I will probably have to sweeten him a little somehow. I hate the way people get with money and greed when they see a lot of it on the horizon.
I was actually going to ask you if you knew anyone else we might approach for funding? “
I then sent another mail on the 14th Sept ’07, as follows:
“Is there any possibility of me getting any of my money back or have I lost it like I have with FURRer?”
To which he responded on the 14th Sept ’07:
“Listen marc, until the company gets money and on its how the hell do you expect me to buy the units back???!!! When I am in a position to take the units back, I will.”
I then sent a response on the 16th Sept ’07 saying:
“Do you think that is a nice response to someone who has does as much as I have done? Howl the ###ing hell do you think I earn the money to help you, shake a ###ing banana tree. You are now on the same ###ing page as FURRer. Thanks a lot.”
To which he responded on the 16th Sept ’07 saying:
The reason you got a short reply like that is because your previous email was not nice, and you really pissed me off.
You wrote: “To date I have been nothing but supportive and without my initial advance you would not even be were you are today” – don’t be disillusioned Marc. Your investment didn’t create the idea or the IP and that is the most important part of the company; but it did help keep things going in Japan…which has been nothing short of a money vacuum. If you didn’t invest then I would have packed up and left Japan in the wind, and instead focused on America. You have lots of contacts at customers who have Lotus and we could possibly help them, but you have refused to make any introductions. Don’t say you’ve been nothing but supportive.. you have been supportive, but not on an absolute level.
Then you wrote: “perhaps not a good idea to take holidays during such times and put 100% effort into making this company work for the sake of people who have helped you.”. Let me set something straight right now – I put in 1000% effort into this company every day, 24/7, and I am entitled and needing of a holiday (which the company did NOT pay for). How dare you suggest that I not take a break? Everyone in Japan, US and EU are on holiday in August so that is a good time to break. You took a break, and so did everyone else so what makes you think that I am some damn machine that can work thousands of hours without a mental rest?!
Then you wrote: “Since I have lost confidence in what you are selling it is not possible for me to recommend anyone…” - This is “nothing but supportive”?! yeah, right. You haven’t recommended anyone before you “lost confidence” anyway. So just what the hell and I supposed to think about that statement you made? The product hasn’t changed so what has? I am beginning to doubt that you never had any confidence from the beginning. You obviously have never created anything new in the market and aren’t aware of how hard it really is to break into a market. The company is making steps and continue to do so in an area dominated by large corporations. And if you’re going to continue on about how much you’ve helped, why don’t you consider what you’re writing first? I appreciate everything you’ve done but your help is definitely tempered – for example, I haven’t been able to connect the phone system (or have a number) because you didn’t want me to power up that hub. Well preventing me from having a phone number tempers the help.
I still believe in the product, even if you don’t. When we are successful, I will make certain that you get your money back, whether you have confidence in the product or not. You know I feel like this, so why do you send provoking emails like “Is there any possibility of me getting any of my money back or have I lost it like I have with FURRer?“ . Do you really think that helps?
Oh, and by the way… thanks for equating me to FURRer. You’re a real gem for that one…and I can’t believe you actually think that. Is very telling…
So let’s stop bickering so I can focus on getting things moving. I’ll just consider this exchange as one of the emotional outbursts which you seem to have every couple months. I am doing the best I can, and more than any single man could do otherwise. Be patient, companies don’t have explosive growth overnight, and I have never heard of an investment that in a start-up that returns in 6 months. So please stop distracting me and focus on helping instead”
From the mail received above things started going from bad to worse:
To give you an idea of how spiteful and immature he conducts himself; he mentioned to me that because I would not allow his noisy tel hub in my office (I would have allowed a quite one without problem) it has hurt his ability to generate business because he could not use the phone system. This despite him never offering a single yen to me in rent payment. Also I introduced him to the miyako hotel and he became flea infected, for which he blamed me. Although I did help him get a full refund due to that incident, the gesture to help him was turned against me. I also helped him find modest accommodation by sub letting from a Russian lady and even let him futons and delivered them to him. He told me that I am hampering his operation by not introducing him to clients despite me sending his information to every single client of mine and I proved this by showing a mail to Mr Fumito Takahashi showing him proof that I sent mails to every single clients of mine introducing his products to them, He also dismissed the fact that I introduced him to Mr Shiomi, Tsutomi who made an investment in his company of Y10, 000, 000.
In fact almost everything I have done for Mr CHRISTOS FOTIADIS as been either discounted or been unappreciated. As an investor, as someone who extended money to him when he was in a desperate way and someone who helped him as much as I did, his behavior shows me clearly that I am dealing with a contemptuous man who is both spoilt and has no idea of showing appreciation towards anyone that helps and assists him. The very fact that he treats me with contempt, as an investor, shows that his moral compass on life is completely damaged. He seems to have no reality on life and does not realize how hard I worked for the money I entrusted him with and he has demonstrated no appreciation for anything I have done for him. The last correspondence he sent me told me to stop all communication with him and his staff and never contact them again and that we would refund what I had paid, when he feels like it.
I have received rude and distasteful mails that would shock anyone who is entrusting them with protecting their investment.
Mr Christos Fotiadis has bad mouthed many people to me, people who have helped him with his company, this included a doctor friend that he has in Chicago. I believe this Doctor invested more than $500, 000 and all Christos ever did was criticize him and say what a ### and greedy person he is. He also did the same to the investor I introduced to Mr Fotiadis, Mr. Tsutomu Shiomi. What he said about these people and others should have made me realize that I am dealing with someone who has no appreciation for anyone who has helped him.
I did what I did for Mr CHRISTOS FOTIADIS to help him and although financial gain was not my sole intention, I did hope to make some money from my investment and effort made towards Mr Fotiadis. However he has put me thru 1 year of abuse and hell and is still holding my money and is offering only to return it when he feels like it without any gain for me. Is that the actions of an honest man?
The last mail he sent me on the 8th Jan ’08 is as follows:
It continues to be a mystery as to why you continue to persist in such dialog, knowing full well that everything below is frivolous and incorrect.
As you know full well, it is printed on each bit of documentation that you were given, that you purchased units into the company. This is not a loan, nor will it ever convert into a loan.
Your request for a 'repayment schedule' is denied and the company is under no such obligation. The company is also under no obligation to purchase back from you the units you originally purchased.
You are careless with your words, just as you are with your documentation. In the documentation, you can easily see in all documents you signed state what the terms and marketability of your units are.
Since you've already lost these documents at least once in the past, and we had to provide again for you the only evidence you have of actually owning these units, we expect you to conduct yourself with professionalism and confidence required as a member of the company. You can review all of this in the PPM, the NDA, the Operating Agreement and your Unit Purchase agreement, assuming you continue to have them in your possession and haven't lost all of those as well.
However in the interest of extricating ourselves from your relationship, at the time I deem the company can afford to repurchase your units for what you paid, we'll be more than happy to revisit this discussion and attempt to make arrangements to repurchase your units back from you. I am just as anxious to fully distance from you, as you are of me. But sending these emails and phone calls will accomplish absolutely nothing for you to that end.
Until such time that you hear from me directly, you are not to contact or call Fumito. He can do nothing for you and is instructed to avoid your phone calls. When you finally do hear from me, we will conclude this.
Until such time, I suggest you spend your energy trying to find ways of getting money into the company, since then we'll be able to get you out faster that way.