TORONTO, Sept. 6, 2021 /CNW/ – Imran Khan makes the following comments in response to recent public statements by Facedrive Inc. (“Facedrive”) (TSXV: FD) and Sayan Navaratnam.
I co-founded Facedrive in 2016. Recognizing that Facedrive needed more capital, in late 2017 I had discussions with Mr. Navaratnam about making an investment in Facedrive.
Mr. Navaratnam’s company, Malar Group Inc. (“Malar”), entered into a subscription agreement with Facedrive dated January 31, 2018, under which Malar subscribed for shares of Facedrive. At the same time, a shareholders’ agreement was entered into, pursuant to which Malar acquired the right to appoint two of three directors, and Mr. Navaratnam replaced me as president of Facedrive.
At the time, I believed that relinquishing control of Facedrive was in the best interests of Facedrive and its shareholders. I later left the board of Facedrive, and ceased to have any involvement in the day to day management of the company.
Through a reverse takeover, Facedrive became listed on the TSX Venture Exchange in September 2019. In connection with that listing, my company entered into a lock-up under which it agreed not to sell any Facedrive shares for a period of 18 months, and agreed to limits on share sales after the end of the 18 month period.
As the 18 month period was about to expire and subsequently, I came under pressure from Facedrive and Mr. Navaratnam not to sell Facedrive shares held by my company. Like other shareholders of a public company, I chose to retain my right to sell shares as I see fit, subject only to the share sale limits I agreed to in September 2019.
Following my decision to retain my right to sell, I have been publicly and privately criticized by Facedrive and Mr. Navaratnam for selling shares. Each has sued me. I have been criticized for selling some of my shares when, it is claimed, I was not responsible for whatever was achieved under Mr. Navaratnam’s leadership. While I believe my early efforts set Facedrive on a course for later success, public company shareholders are entitled to sell, even though they play no role in management.
It is up to each shareholder to decide whether they are a buyer or a seller. I have been clear with Facedrive that I intend to monetize some of my position in Facedrive.
Following the close of markets on September 3, 2021, Facedrive’s lawyer inquired of my legal counsel about his availability during the second or third weeks in September for an initial hearing in a liquidating proceeding for Facedrive under the Companies’ Creditors Arrangement Act (“CCAA”). My counsel was further advised that the decision to file under the CCAA had not yet been made by Facedrive’s board.
As I intend to continue to trade in Facedrive shares, and as Facedrive’s advice about a possible CCAA proceeding may be material to investors, I am disclosing the information that I received, so that it is available to all shareholders and prospective shareholders of Facedrive.
SOURCE Imran Khan
