(July 25, 2019). Morganti & Co. is pleased to announce that, on behalf of Canadian and German investors, it has reached a settlement valued at CAD $2.8 million with Namaste Technologies, Inc. to resolve claims that it released investor documents omitting material facts about its divesture of “Dollinger Enterprises US, Inc.”, between November 29, 2017 and July 23, 2018.
The Canadian and German shareholders alleged that the omitted material facts about this divesture were released on October 4 and 16, 2018, when Citron Research Inc. published reports that Sean Dollinger sold Dollinger Enterprises US, Inc. at an artificially low price, kept an undisclosed financial interest in it, and watched the value of his position increase by multiple times within months renamed as Lifted Innovations, Inc.
“Settling these class action lawsuits removes a major business and capital markets distraction, while clearing our path ahead to increase resources and focus on what will grow the Company,” said Meni Morim, Interim CEO of Namaste Technologies. “We’re on track to becoming the world’s most customer focused cannabis marketplace, and this settlement is a win-win for Namaste Shareholders and business partners alike.”
Under Canadian provincial laws, the amount of damages recoverable from corporations is limited to 5% of its market capitalization. Morganti & Co. measured the 5% limit to be CAD $5.6 million. Albert Pelletier, the lawyer representing the shareholders, stated that, “A recovery of CAD $2.8 million represents a 50% recovery; and the best possible outcome for the class of shareholders. We believe that many shareholder class members are still investors in Namaste and, as such, they have a vested interest to see Namaste succeed.”
Subject to court approval, the settlement funds will be distributed to investors that purchased Namaste’s equity securities listed on the Frankfurt and Toronto stock exchanges after November 29, 2017, and held some of all of those shares until after February 3, 2019.