Namaste Technologies said it has reached “a mutually agreed upon settlement” with former chief executive Sean Dollinger in which the firm’s co-founder will step down from all formal roles with the company, including as a director.
Dollinger will remain with the Toronto-based marijuana e-commerce company in an advisory role to provide transition support to the firm’s new leadership.
In connection with the findings of an internal investigation, the company said on Feb. 4 it was “commencing legal action” against Dollinger “for damages and disgorgement.”
However, a spokesperson for the company told Marijuana Business Daily that no legal action by the company had actually taken place.
“The company never did launch any full-blown lawsuits against Mr. Dollinger,” the spokesperson said. “Both parties realized it would be beneficial to discuss a settlement. As a result, that’s where we ended up.
“The company and Sean Dollinger effectively have settled any differences outstanding at this time.”
As part of the settlement, Dollinger has withdrawn his own legal application against Namaste and agreed to vote in favor of the election of management’s nominees to the board of directors for three years.
More specific terms of the settlement were not disclosed.
Namaste also said it would improve its corporate governance.
The company said the board has reconstituted the audit committee, which will be chaired by Laurens Feenstra and consist of Sefi Dollinger and board chair Branden Spikes. Sefi Dollinger is Sean’s uncle.
A nominating and governance committee headed by Kiranjit Sidhu was also established. Spikes and Feenstra will also sit on the committee.
Sean Dollinger acknowledged the settlement in his own news release.
“The last few weeks have been challenging for me personally and professionally,” he said, “and the terms of the agreement will allow me to continue working at the company in a senior advisory role.”
Namaste’s shares are traded on the TSX Venture Exchange as N and on over-the-counter markets as NXTTF.
