Namaste Technologies (CVE:N) (OTCMKTS:NXTTF) said Tuesday that it has reached a legal settlement with ousted CEO Sean Dollinger.
Under the deal’s terms, Dollinger has dropped his lawsuit against the Canada-based cannabis e-commerce platform and will act as a senior advisor.
News of the settlement with Dollinger came as Namaste announced it has tapped its director Branden Spikes, former chief information officer at Elon Musk’s SpaceX, as chairman of the board.
Investors applauded the news, sending Namaste shares up 5.6% to C$1.13 in morning trade on Tuesday.
“I am pleased to announce that Namaste Technologies and I were able to put aside our differences in order to achieve an agreement that both parties believe is in the best interest of the Company's stakeholders,” Dollinger said in a statement. “During my advisory period, I will focus on providing resources and skills that will contribute to the future success of the company and its new management team.”
As part of the deal, Dollinger has agreed to step down as a director and from a formal role at the company as he looks to pursue other opportunities. Meni Morim will remain at the helm of Namaste as interim CEO.
“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 Morim. “With this issue behind us, Namaste can focus on what matters most -- growing our business and creating shareholder value.”
As part of the board changes, Namaste has shaken up its audit committee to include Spikes, Sefi Dollinger (who is Sean Dollinger's uncle), and Laurens Feenstra. The chairman of the audit committee is Feenstra.
A nominating and governance committee has also been established, which will be comprised of Spikes, Feenstra and Kiranjit Sidhu. Sidhu will chair the committee.
Separately, the date for Namaste’s annual general meeting for shareholders will be May 28. Norton Rose Fulbright Canada LLP has been brought on as Namaste’s special legal counsel.
Under the settlement, Dollinger has agreed to vote his Namaste shares in favor of the election of management’s nominees to the board of directors for three years.
Earlier this month Namaste said that following an investigation by a special committee of the board of directors, it terminated Sean Dollinger as CEO. The board also launched a strategic review to consider “all value-maximizing alternatives,” including selling the company after receiving interest from a potential bidder.
Dollinger, in turn, moved to sue the cannabis company over his departure.
Contact Ellen Kelleher at [email protected]