Steve Clarke steps down at Aqua Metals as hedge fund launches control bid
Steve Clarke stepped down as Aqua Metals CEO, chairman and director on April 23 to be replaced as CEO in an interim period by Selwyn Mould, company co-founder and chief operating officer.
The roles of CEO and board chairman will be separated in the future, to “create significant improvements in corporate governance and organizational leadership”, according to a company statement.
Independent director Vincent DiVito was elected by the board as non-executive chairman, and nominated for election to the board along with Thomas Murphy, Eric Prouty, Mark Slade and Mark Stevenson. Voting will take place at the annual meeting on June 5, and the company has urged stockholders to vote for all five nominees.
The changes appear to have come in response to a hostile restructure bid by 7.9% stockholder Kanen Wealth Management, a hedge fund based in Florida, issued a statement to stockholders on April 18, urging them to “stop, look and listen” before taking any action and to wait until they had received Kanen’s proxy materials (materials which must be issued before an AGM via the US Securities and Exchange Commission when soliciting shareholder views) — a clear indication that Kanen intended to launch a re-structure bid.
“Kanen is seeking to reconstitute the board with five highly qualified director nominees — Anthony Ambrose, Alan Howe, David Kanen, Jeffrey Padnos and Shariq Yosufzai,” the statement said.
“Aqua Metals is at a critical juncture, and we believe that meaningful board change is required to protect the best interests of all unaffiliated stockholders and reverse the recent path of value destruction that has resulted in the company’s stock price declining by 85% over the past year alone.
“We firmly believe that Aqua Metals is in urgent need of a refreshed stockholder-focused board who is committed to enhancing long-term stockholder value.”
In response, Aqua Metals said it had been plagued with problems for months, with lawsuits filed against the company and various technical issues, despite announcing Johnson Controls as its first recycling licensee in February 2017.
A year later it said it had solved a ‘sticky lead’ problem with lead left hanging on module exit chutes, with an electrolyzser retro-fit design successfully operating for more than 20 hours over a four-day period.
On April 24 Aqua Metals released a statement to say that three of its AquaRefining modules had completed a ‘conditioning’ period and entered production.
“Three AquaRefining modules have completed the conditioning period and have been transferred from technical control to production, where they are running consistently on a single shift,” the statement said. “A fourth module has entered the conditioning period and is expected to be transferred to production in the next week.”
“The team has worked tirelessly to address the technical challenge of the ‘sticky lead’ issue and fulfil the potential of our unique technology. We’re now seeing the results,” said Mould. “We are committed to sustaining our current momentum to bring the remaining modules on line and ramp up AquaRefining this quarter.”