Exhibit 17.1
September 16, 2015
VIA EMAIL
Board of Directors
Abakan, Inc.
2665 S. Bayshore Drive, Suite 450
Coconut Grove, FL 33133
Dear Abakan Board:
I resign from the Board of Directors (the “Board”) effective immediately. While I am certainly resigning
for “good reason”, since I am not providing 60 days’ notice I hereby waive any claim on unexercised stock
options as well as several thousands of dollars in unpaid travel expenses.
I have struggled to perform my responsibilities’ as a director these past six months due to the unrelenting
harassment from Robert Miller, the Abakan CEO (“Miller”). I have witnessed the dramatic destruction of
shareholder and enterprise value by Miller. Once again I urge the Board to remove Miller immediately to
salvage any remaining enterprise value.
You have all witnessed the Miller incompetence and harassment culminating yesterday in the release of the
10K with inadequate disclosures and in violation of internal control policies. I informed the Board several
times that, as Head of the Audit Committee, I needed to be included during the audit review process. I also
shared these concerns with Abakan’s new auditor, Allen Waddle of Maloney & Novotney (the “Auditor”).
Instead, I received an email 33 minutes ahead of a Board meeting yesterday to approve the 10K, with a
draft attached (to clarify I had never been shown a draft 10K or any other supporting or interim documents
or work product despite repeated requests). Since I was in a meeting, I did not receive this email until after
11:30AM, I was unable to participate in the call but still quickly glanced at the document and noticed the
Board and Auditor of (a) inadequate disclosures contained in the 10K and (b) that the Audit Committee had
no time to perform an adequate review. I have attached the Abakan Audit Committee Charter that was
flagrantly ignored by the Board and outside Auditors.
I refer each of you to section 9 of the Abakan By Laws (I have attached this document for your review –
please also note the requirements on Annual Meetings which I believe this Board views as a mere
suggestion rather than a requirement since no meeting has been held since I have been a Director), calling
for 24 hours notice before a Board Meeting. Let’s review the advance notice I have received on the past
four Board Meetings:
Meeting Scheduled
Notice Sent
Notice Provided
9/15/15, 11:30AM
9/15/15, 10:57AM
33 minutes
8/10/15, 9AM
8/9/15, 5:05PM
16 hours (overnight)
7/22/15, 5PM
7/22/15, 9:53AM
7 hours
7/7/15, 9AM
7/6/15, 9:56PM
11 hours (overnight)
In addition to receiving deficient notice of Board meetings, I was not provided with appropriate underlying
materials to review. In fact, on the July 7th Board call, Miller told me to “get a lawyer” if I wanted him to
turn over copies of the new convertible debt documents that he had negotiated. Perhaps because the terms
were so outrageous, he did not want them to see the light of day (Footnote 18 to the 10K filed yesterday
discloses interest rates “up to 44%” and conversion at “between 60% to 100% of the lowest trading price
for 20 prior trading days”.
It was only after the July 7th Board meeting (approving the Abakan-Powdermet exchange) that Andrew
Sherman sent me the valuation for Powdermet. The Board was asked to vote on this complex transaction
involving a Company insider without the benefit of this key document or a Fairness Opinion.
On June 25th Sonoro Invest S.A. (“Sonoro”) sent the Board a detailed letter demanding the Board take
action to remedy breaches of fiduciary duties and violations of law by Abakan officers and directors. On
July 22nd Ryan Owen was appointed the head of an independent committee to investigate these allegations
(even though Mr. Owen is a paid consultant to Abakan) and an attorney was hired. Shortly thereafter the
attorney resigned for non-payment.
I encourage you all to re-read the Abakan Code of Business Conduct & Ethics that I have attached. I
attended all Board meetings overlapping 2.5 years of Jeff Webb’s directorship and never heard his voice
nor saw his face. He was indicted in May 2015 by the DOJ in the FIFA scandal. Costas Takkas (whom
Miller represented to be his “best friend”) served as the Company CFO from February 7, 2014 through May
29, 2015. He is also under indictment by the DOJ in the FIFA scandal. With an indicted CFO having served
during fiscal year 2015, the Company still refused to allow the Audit Committee to perform its job.
Regrettably,
/s/ Raymond Tellini
Raymond Tellini
