Not exactly a good look for a company that is supposedly all about compliance, rules, regulations and the like..
Essentially it is alleged Amanda Ostrowitz undervalued CannaRegs by around 90% before Fyllo sale and not only that she sold the story to her former work colleagues, we presume to make herself more cash?
More from Cannabis Law Report soon…………
In the meantime here’s a report from New Cannabis Ventures who write…
Lester Firstenberger and Sathya Rajavelu have filed a federal lawsuit in the Southern District of New York against CannaRegs, its acquirer, Fyllo, and its founder, Amanda Ostrowitz, as well as two cannabis investors and people associated with those firms. CannaRegs, which was founded in 2014 and provides regulatory data for the cannabis industry, was acquired by Chicago-based Fyllo in January.
Firstenberger, who had previously served as CEO of CannaRegs, and Rajavelu, who had served as CTO, allege that Ostrowitz colluded with Panther Opportunity Fund and Phyto II, LP, a fund run by Phyto Partners, to allow them to buy their shares at a substantial discount to the price paid by Fyllo just four months later. According to the lawsuit, Ostrowitz reached out to them in September 2019 to repurchase their stock representing almost 12% of the company for approximately $179K, implying a company valuation of $1.52 million. Four months later, the company was sold to Fyllo for $10 million in cash and stock.
The plaintiffs allege that at the time they sold their stock to Panther Opportunity Fund and Phyto II, LP that Ostrowitz had already struck the deal and had informed both investors but not the sellers. Panther’s David Friedman, Ramie Tritt and Jordan Tritt as well as Larry Schnurmacher of Phyto Partners were named in the suit as well.
Full report read on at