Israel directors win control of pot stock eSense after bruising boardroom fight
Health & Biotech
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The months-long fight over who will control pot stock eSense Lab is over — and team Israel has won.
The four Israel-based directors won control of the company (ASX:ESE), beating the four Australian and Israeli contenders by a margin of 20 million votes.
New chairman Ilan Saad, chief Haim Cohen, Eran Gilboa and Benny Karasik were re-elected. Galit Shenhar continues as a director.
Brendan de Kauwe, who resigned as chairman in February, former MMJ Phytotech (ASX:MMJ) managing director Andreas Gedeon, Timothy Wise and Otsana Capital boss Faldi Ismail were not elected or re-elected to the board.
The AGM also ratified 2.5 million 20c shares given to MMJ Phytotech in November last year, when it became a strategic investor in the company.
Investors did not approve the second half of the deal, which gave MMJ Phytotech 1.25 million options exercisable at 30c.
MMJ Phytotech says this means eSense Lab must now pay it $199,000 in lieu of those options.
eSense Lab is a “life sciences” play trying to reverse engineer high-value compounds from plants such as cannabis in a cost effective and sustainable way.
Bitter boardroom fight
eSense Lab has been the subject of an increasingly vicious war of words and legal maneouvres over the last six months.
The AGM on Thursday was the result of a court case launched by the Australian directors to force a date for the meeting, after it had been postponed three times.
The Australian directors claimed the Israeli board members were signing deals that created no value for the company or shareholders.
The Israeli directors accused the Australians — two of whom work for the company’s now-ex corporate advisor Otsana Capital — of working for their own interests and trying to take control of the company.
Mr de Kauwe went so far as to create his own website to rebut the accusations.
Where is the money?
In 2017 eSense Lab made $84,000 in revenue.
The company started delivering terpenes to Allow Vaporizers in April last year.
However, by September said it only had receipts from that deal worth $US85,000.
The deal itself is supposed to be worth $US470,000
It made a loss of $2.1 million, having spent about half of that sum on general and administrative fees.
The company has negative cash flows $1.9 million.
However, the company says it will make at least $US1.1 million in the 12 months after September this year from Emirati company IC Access.
It says it will make at least $US540,000 from Singaporean company Advanced Technology Management Private Limited (ATM) in the 12 months after that contract starts.
ATM has until July to get the necessary approvals, after which eSense is allowed to cancel the deal.
eSense has been contacted to see if this deal has started.