It's early in the day and the OTC Markets PR machine has just started up. Namaste is a Canadian reefer company which had a pump and dump event last year or the year before. It's been downhill since then. Apparently there has been some controversy.
TORONTO, Feb. 4, 2019 /CNW/ - Namaste Technologies Inc. ("Namaste" or the "Company") (TSXV: N) (FRANKFURT: M5BQ) (OTCMKTS: NXTTF) announced today that, following a recent expression of interest in the Company, the Board of Directors of the Company (the "Board") has launched a strategic review process to consider all value-maximizing alternatives.
Namaste Technologies Inc. (CNW Group/Namaste Technologies Inc.)
Namaste also announced that following an investigation by a Special Committee of the Board of Directors, the Board has terminated the employment of Sean Dollinger as Chief Executive Officer of the Company for cause and removed him from his position as Director, effective immediately. Meni Morim has been appointed Interim CEO of the Company. To help strengthen our strategic partnerships, the Company has also appointed Darren Gill as Chief Strategy Officer.
Strategic Review Process Initiated
The Board has initiated a formal strategic review process to consider all value-maximizing alternatives, which could include exploring a potential corporate transaction that may, but not necessarily, result in the sale of the Company. We are in the process of engaging an investment bank to advise a Special Committee of the Board overseeing the process.
The Company does not intend to set a definite schedule to complete its evaluation or process and cautions that there are no assurances or guarantees the process will result in a transaction or, if a transaction is undertaken, of the terms or timing of such a transaction.
Namaste remains in a strong financial position, with cash balances intact, and will continue to execute on its unique and effective business strategy. The Company will provide an update regarding the outcome of the strategic review process once it has concluded.
Special Committee Investigation
In October 2018, the Board was informed of certain allegations regarding the Company made by a short seller. In response, the Board determined it was in the best interests of the Company to form a Special Committee, comprised of an independent Director, Branden Spikes, to investigate the allegations. Subsequently, Laurens Feenstra was added to the Special Committee as a second independent Director. Miller Thomson LLP was engaged as legal advisor to the Special Committee, and Miller Thomson LLP retained Ernst & Young LLP to conduct a detailed investigation and report back to the Special Committee.
The Special Committee's thorough investigation examined all material allegations against the Company. The only one that was substantiated and required action, as recommended by the Special Committee, related to the sale of Namaste's US subsidiary, Dollinger Enterprises US Inc., in 2017, and subsequent transactions involving its assets and companies in which Sean Dollinger and Namaste's head of marketing David Hughes have a beneficial interest, as well as breaches of fiduciary duty by Sean Dollinger and evidence of self-dealing. In light of these findings and the Special Committee recommendations, the Board concluded that it is in the best interest of Namaste that Sean Dollinger be terminated from his role as CEO for cause and removed as Director of the Company. In connection with the findings of the investigation, the Company is commencing legal action against Sean Dollinger for damages and disgorgement.
The Nasdaq's third tier, the AMEX can be just as bad, and last but not least, the OTC, it seems, are financial venues that reward failure.
