SITO Mobile Ltd (STTO)

[subslover]

Of course they are shills and the intent is to gain control and sell or merge SITO with another one of their Companies. They would make a fortune. Now you want 2 Board members thrown out! They want 4 thrown out. Yup here is the PR bellow. And imho the SEC is gonna investigate the charades here. Question is when.

SITO Mobile’s Largest Stockholder TAR Holdings LLC Calls on Four Members of Board to Resign
Four-member faction including directors Brent Rosenthal, Michael Durden, Itzhak Fisher and CEO Thomas Pallack acting against the interests of stockholders
Faction has shutout certain directors from decision-making process in order to ram through exorbitant compensation packages and rubberstamp approval of existing conflicts of interest
Questionable statements by CEO and unwillingness to work from SITO Mobile’s headquarters mean he should resign

JERSEY CITY, N.J.--(BUSINESS WIRE)-- TAR Holdings LLC and TAR SITO LendCo LLC, SITO Mobile Ltd.’s (NASDAQ:SITO) largest stockholder owning approximately 10% of the company and senior secured lender respectively, addressed the revelations in the July 27, 2017 letter by SITO Mobile directors Matthew Stecker and Thomas Thekkethala by calling on the four member faction of the Board and management to resign.
The allegations made in the July 27 letter appear to confirm the numerous concerns TAR has repeatedly stated and should be of serious concern to all stockholders. TAR believes that the current Board and members of management of SITO Mobile are not competent to manage the company’s business.
“Just eight weeks ago stockholders were promised change when this new Board was elected to clean up SITO Mobile. Instead, we have seen more of the same — more conflicts of interest, more exorbitant handouts, and more incompetent management,” said Karen Singer, representative of TAR Holdings. “It’s time for the conflicts of interest and handouts to friends to end. The only way for SITO Mobile to get back on the right track is for the four-member faction of the Board and management to resign.”
If the allegations made in the July 27 letter are true --that a four-member faction of the Board has emerged, and is now excluding two other directors from the company’s decision-making process by failing to give them proper notice of proposals and consider their input at Board meetings-- TAR believes that this four-member faction, and the counsel advising them, are in serious breach of their legal and ethical obligations to SITO Mobile, its stockholders and fellow directors.
A troubling pattern has emerged with this four-member faction governing for themselves and their friends, not for all stockholders:
Endorsing a long-standing conflict of interest and pattern of inadequate governance: Brent Rosenthal, the Chairman of the Board, has serious conflicts of interest resulting from, for example, Mr. Rosenthal’s service on the board of directors of comScore, Inc., which TAR understands is a direct competitor of SITO Mobile. In fact, TAR believes that Mr. Rosenthal’s conflict of interest and relationship with comScore may have already led Mr. Rosenthal to favor comScore over SITO Mobile in connection with various contracts, including comScore’s collaborations with xAd1 and Tru-Optik,2 each of which were entered into while Mr. Rosenthal was a member of the Board.
Additionally, Mr. Rosenthal, while chairman of comScore’s audit committee, presided over comScore’s continued failure to hold an annual meeting for over two years and failure to release audited financial statements over the same period, leading a significant shareholder, Starboard Value LP, to initiate litigation against the company.3 These particular legal and ethical violations further evidence Mr. Rosenthal’s lack of transparency and concern for the best interests of SITO Mobile’s stockholders.
Moreover, Mr. Rosenthal has demonstrated a profound inability to govern public companies adequately. By way of example only, Mr. Rosenthal has presided over a more than 40% decline in the stock price of RiceBran Technologies during his tenure as chairman of RiceBran’s board of directors (after being installed by Stephen Baksa, RiceBran’s third largest stockholder). Mr. Rosenthal lacks the experience or, apparently, the ethics necessary to manage a public company’s business effectively.
Questionable claims by and qualifications of CEO Mr. Thomas Pallack: TAR is aware of a letter from Mr. Thomas Pallack, the current CEO of SITO Mobile, addressed to the stockholders, that contains various unfounded and inaccurate statements. Among other things, the letter states that Mr. Pallack is wholly responsible for SITO Mobile’s recent entry into a material contract by the company. TAR, however, understands that the negotiation and entry into such agreement on behalf of SITO Mobile was in the process for a number of months, long before Mr. Pallack was installed as CEO by the current Board.
In addition, TAR questions the veracity of the statements made in the CEO’s letter regarding Mr. Pallack’s impact on the success of Oracle Corporation. Mr. Pallack may well be a competent salesman, but TAR seriously questions whether he has shown the experience or aptitude to govern a successful public company.
Remarkably, it is also TAR’s understanding that Mr. Pallack has no intention to relocate to New Jersey, where SITO Mobile’s corporate headquarters are located. In addition to making it difficult for Mr. Pallack to properly observe his duties as CEO, his apparent refusal to move to New Jersey would cause the company to take on unnecessary costs and burdens in arranging travel, room and board for Mr. Pallack and his team.
In light of these concerns, as well as the additional misconduct described in the July 27 Letter, TAR believes that the immediate resignation of Mr. Pallack as CEO and certain other members of the new management team is necessary and appropriate at this time.
Exorbitant compensation packages for incompetent management: As substantiated by the allegations made in the July 27 letter, TAR continues to believe that the compensation packages recently approved by the Board are egregious, non-market, and not in the best interests of the company and its constituents. Further, none of the recipients of such exorbitant compensation packages have any track record of effectively managing public companies. TAR believes that the terms of the compensation packages demonstrate that members of the Board and management are acting to further their individual interests at the expense of stockholders.
TAR believes payment to conflicted counsel constitutes a default under Secured Note and Loan Documents: As set forth in TAR’s prior 13D amendments, TAR believes that various defaults and events of default have occurred and are continuing under the Secured Note and the Loan Documents. After the proceeds from SITO Mobile’s recently closed equity offering are used to pay down the principal, interest and fees on the Secured Note, as SITO Mobile has stated it would do, it will still have outstanding obligations to TAR under the Loan Documents, including, but not limited to, a covenant to monetize its patents. In addition to the defaults previously asserted by TAR, TAR believes that the payment by SITO Mobile of significant legal fees and expenses of Pepper Hamilton LLP, incurred as counsel for Stephen Baksa in connection with his proxy contest, also constitutes a default under the Loan Documents and evidences both a clear conflict of interest for Pepper Hamilton as well as a waste of corporate funds.
As to Pepper Hamilton’s role here, TAR questions whether the Board retained independent counsel to review the propriety, under the circumstances, of such significant payment to Pepper Hamilton for its representation of Mr. Baksa during the proxy contest. Similarly, TAR believes it is important to consider whether Pepper Hamilton advised the Board as to the permissibility, specifically with regard to their fiduciary duties to the company and its stockholders, of excluding two directors from its deliberative process by failing to provide proper notice of material Board decisions, as alleged and suggested in the July 27 letter. TAR submits that, if the allegations set forth in the July 27 letter and described above are true, Pepper Hamilton cannot represent SITO Mobile in an appropriate manner and should resign as counsel immediately.
1 See https://www.mediapost.com/publications/article/278987/xad-teams-with-comscore-for-mobile-attribution-sol.html.
2 See http://www.prweb.com/releases/2017/07/prweb14530244.html.
3 See https://www.bloomberg.com/news/articles/2017-07-25/starboard-takes-stake-in-comscore-sues-to-force-annual-meeting.

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Source: TAR Holdings LLC
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