The saga of Namaste Technologies Inc. (NXTTF) and its co-founder Sean Dollingers seems to have finally come to an end. The company announced that it has reached a settlement with Dollinger in which he will step down from all of his formal roles with the company, including that as a board member. Instead, Dollinger will enter into an advisory relationship with the company.
Earlier this month Namaste fired Dollinger and said it could be reviewing selling the company. Namaste came under a short seller attack by Citron Research in October 2018 which caused the board to form a Special Committee to investigate the allegations. The only one that was substantiated and required action according to the company was 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.
The company said it was also taking legal action against Dollinger for damages and disgorgement. In return, Dollinger filed a countersuit. As part of the settlement, Dollinger has agreed to drop his lawsuit.
“The events of the past few weeks have been difficult for everyone involved, but we are pleased to have reached a mutually agreed upon settlement that puts the interests of Namaste and our shareholders first,” said Interim CEO Meni Morim. “With this issue behind us, Namaste can focus on what matters most – growing our business and creating shareholder value. We have an excellent management team, a strong cash position, and a strategic plan that will drive innovation and growth. The future for Namaste is bright.”
The company also noted that as part of the Agreement Dollinger has agreed to a market standard standstill, under which, among other things, he will vote his Namaste shares in favour of the election of management’s nominees to the Board of Directors for three years. The company and Dollinger have also entered into standard non-solicitation and non-competition agreements.
Corporate Governance Update
Namaste also made the following announcements about the Board of Directors and its committees:
- Branden Spikes has been appointed the Chair of the Board.
- The Board has reconstituted the audit committee to be comprised of Branden Spikes, Sefi Dollinger and Laurens Feenstra. The Chairman of the committee is Laurens Feenstra.
- A nominating and governance committee has been established, comprised of Branden Spikes, Laurens Feenstra, and Kiranjit Sidhu. The Chairman of the committee is Kiranjit Sidhu.