Deep Dive This is a segment of the Deep Dive on Robbie. Concerns with the CEO of Abattis
The final bone of contention that we currently have with Abattis Bioceuticals, is the chief executive officer Robert Abenante. Typically, we at The Deep Dive don’t address specific members of management that we have issues with. However, there are a number of red flags that have stuck out to us. Here’s the rundown.
- CEO of two listed public companies, Abattis Bioceuticals and Marifil Mines
- Pending lawsuit with a former company he headed
- Excessive “compensation for services”
- Unable to reign-in his management team on equity selling
First and foremost, the man currently helms two public companies. In addition to the demanding nature of Abattis Bioceuticals, he was recently named the CEO of Marifil Mines, a firm listed on the TSX Venture in November. Due to this appointment occurring during his tenure at Abattis, it brings in to question the focus he has on leading the company. With the many developments currently occurring for Abattis, does he truly have time to effectively manage both corporations?
Next on the list, is a lawsuit that was filed in September against Mr. Abenante by his former employer. The company, BLOX Inc, claims that while in the role of CEO for the firm, Abenante made several unsubstantiated transactions with company money. This includes paying off personal credit cards in addition to transferring funds to a private company in which he controls, Emerald Power Consulting Inc. The news report, published by Stockwatch Daily, goes on to state, “Among other things, he took no steps to develop the company’s business, did not devote sufficient time to his duties, acted in a manner of self-interest, did not maintain proper financial records and failed to assist the company after his resignation, the suit states.”
This in turn circles back to our initial concern related to helming two companies. It has been stated in the past that insufficient efforts were made by Abenante to further the interests of the firm. Will this occur again now that he has to split time amongst two lead roles?
Third on the list, is the excessive compensation for services in which Rob Abenante has claimed. On February 27, he was awarded 6,500,000 common shares of Abattis at a price of $0.263 as a form of compensation. In dollar terms, this equates to a paycheck of just over $1.7 million. Twelve days later, he was awarded a further 3,000,000 shares at $0.27, or $810,000 cash equivalent, as compensation for services performed. During this time, the $25 million acquisition of 90% of Gabriola Green Farms occurred. However, this is hardly with compensating the CEO of Abattis $1.7 million.
Lastly is the issue of Abenante’s management team itself, which he appears unable to reign in. In additional to the promotional material for which the firm has been flagged for, Abenante has failed to stop his management team from selling company shares. This would not be an issue during the normal course of operations.
It’s understood that insiders, including directors and members of management, may have a plethora of reasons to sell shares of the company. However, these sales should not occur while an open financing exists. Further to this, it is horrendous optics when these open market sales occur at price points below the financing price. Based on the reported insider transactions, this occurred five times during the course of a single raise.