MassRoots (MSRT) founder Isaac Dietrich has regained control of the company he founded. Dietrich spoke to Green Market Report minutes ago to confirm that the company filed an 8K with the Securities and Exchange Commission.
The filing states that the current Chief Executive Officer Scott Kveton has resigned, along with the board members that only recently forced Dietrich to resign. Dietrich has installed his choices as new board members.
“Scott will have no role in MassRoots going forward,” said Dietrich. “I’m excited to get back to work for the shareholders.”
How Dietrich Lost The Company
The drama began a few months back when Dietrich announced he was acquiring the legal company CannaRegs for $12 million. He named CannaRegs CEO Amanda Ostrowitz as the new MassRoots President amid rumors swirling that she would eventually take over the role of CEO. Instead, the board grumbled about the price being paid for CannaRegs, even though the deal was immediately accretive and began taking steps for a boardroom coup.
In October, Kveton approached Dietrich with unsavory details of the leader’s behavior and suggested he resign or the allegations would be made public. Dietrich did so and the CannaRegs deal was called off.
Dietrich Fights Back
Dietrich though wasn’t ready to walk away. He began making waves publicly and this triggered Kveton to file a lawsuit alleging illegal drug use and improper sexual behavior in the workplace. Rather than back down, Dietrich rallied shareholders to his side.
Over the past week, Dietrich approached the board and demonstrated that he had 70% of the shareholders willing to vote in his favor and remove the current board. Once the negotiations were settled and the dust cleared, Dietrich got the company back. He also noted that the lawsuit against Dietrich has been withdrawn.
What This Means For CannaRegs
Dietrich said Ostrowitz has a great business in CannaRegs. “She has been crushing it on her own,” he said. “If she’s interested we’d love to have her company. MassRoots investment in CannaRegs was one of the best we’ve ever made. It would pay off immediately.”
It’s certainly been a rollercoaster year for Ostrowitz. She had to defend the price being offered for her company after the deal was announced. Rather than bask in the joy of the acquisition, she was immediately forced to defend the deal. After weeks of defending the price being offered for CannaRegs, she learned of the board coup while on vacation in Italy. That’s when she pulled out and continued to sign more and more new clients to her company.
MassRoots shareholders have suffered tremendously this year. The stock plunged from a 52-week high of $8.25 to a low of 12 cents. It was lately trading at 31 cents. The loss of the charismatic Dietrich and the immediately accretive CannaRegs acquisition soured investors on the company’s prospects. The drama of the battling CEO’s also spooked shareholders that were wanting stability at the company.
Now, the onus is on Dietrich to bring value back to the shareholders and convince them that they weren’t wrong to reinstate him as CEO.