Great question as I believe Elite/Mikah is a unique situation. For publicly held companies when there appears to be a non-arms length transaction or related party transaction the BOD has to sign off. In today’s world, BOD’s are RARELY independent. It has become much more of a scratch each other’s back situation or position used as a stepping stone to open other doors rather than the independent judgment to manage the company appropriately, especially if it contradicts the CEOs actions. In my experience, I have seen more weak BODs than anything. Unique is not your crème of the crop type organization able to recruit great talent to the Board either.
On a separate topic, I think Nasrat is managing the company as a lawyer and less as a strategist. Hindsight is always 20/20, but selling off the opioids/Methadone was done purely out of fear to protect his ownership in Elite. Judgment was rushed, but who knows what rumors were flying in the legal circles around the risk of mfg opioids. His decision to sell allows Elite to limp along another day.
In all honesty, I’m not sure if Elite would have been able to find an opioid marketing/distribution partner anyway. How many CRLs did they receive? By the time first one was approved I believe the opioid crisis was in full force negating any potential partner. However, I think holding them would have been a better option than $300K/each. I am no Wall Street pharma M&A analyst, but this was clearly a terrible deal where Nasrat’s back was against the wall (I’m sure a position of strength in his view), to keep the lights on another day.
Like it or not, Nasrat is married to Elite. I’m not sure any new CEO would want to lead this company with the significant ownership he has. The company is FINALLY starting to stabilize after 7 years and 3x OS increase. That alone helps me sleep a little better at night, but 1 step forward 1 step back year after year gets frustrating. The lack of transparency is frustrating, but without significant (or any) fund ownership in this stock, shareholder activism is extremely difficult and Nasrat knows that.
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