Toronto-based ride-sharing company Facedrive recently provided what it called “clarifying information” on its acquisitions and projects launched in the third and second quarters of 2020.
Facedrive claimed to be providing the information after being requested to do so by the Ontario Securities Commission’s Corporate Finance Branch as part of a continuous disclosure review that dates back to 2020.
The recent clarifications come in the wake of two reports questioning Facedrive’s valuation, leadership, and purported growth.
The company statement notes Facedrive was requested to provide “clarifying information” about its Foodora asset acquisition, the HiRide acquisition, a consulting agreement with US medical device company Medtronics as well as the status of Facedrive’s early stage and non-revenue generating “projects” during fiscal Q2 and Q3 2020.
“The staff of the Corporate Finance Branch also requested that specific performance data and growth statistics be provided in this clarifying press release in order to specifically quantify and clarify facts about the growth and demand for the Company’s products and services with respect to Foodora Canada, HiRide, TraceSCAN and the Steer Acquisition,” Facedrive’s statement read.
The statement also notes that pursuant to an OSC review, it was found that Facedrive, “among other things,” “was a late filer” of “material contracts” related to its asset purchase from Foodora and stock exchange agreement to acquire food delivery service Food Hwy. Facedrive claimed it had made the required filings with the TSX Ventures Exchange but failed to file on SEDAR. The company said it has since made the SEDAR filings.
Regarding the contracts, Facedrive noted its board of directors and senior executives are working with auditors and external legal counsel to review and improve Facedrive’s disclosure controls and procedures and internal control over financial reporting.
At the time of the OSC-requested statement, Facedrive also announced several executive changes, primarily pertaining to its board of directors.
Facedrive operates a number of different businesses, and has a stated ethos of environmental sustainability. In addition to creating a ride-sharing platform, which operates in several Ontario cities, Facedrive operates a food and grocery delivery service, offers COVID-19 contact tracing, and hosts an e-commerce website.
RELATED: Ontario court approves Facedrive’s acquisition of Foodora Canada assets
Facedrive went public on the TSX Ventures Exchange in 2019 through a reverse takeover. As of Friday, it trades at $18.42 CAD, and its market capitalization is $1.75 billion.
The recent clarifications from Facedrive come in the wake of two reports questioning Facedrive’s valuation, leadership, and purported growth. One report, from The Globe and Mail, recently questioned how a company with “meagre revenue” and no high-profile venture-backing could achieve a valuation of over $1 billion. That followed a report from Hindenburg Research in July, which called Facedrive’s core business “hollow,” and claimed Facedrive’s CEO “has a history that bodes poorly.” The reports specifically addressed some deals Facedrive has made regarding companies that were also part of the OSC review, such as the Medtronics consulting agreement. Both The Globe and Hindenburg have also raised concerns regarding Facedrive’s CEO, Sayan Navaratnam and his previous ventures, such as PetroAlgae and Creative Vistas.
Recent executive changes Facedrive made include Jay Wilgar, who joined Facedrive in March 2020 as chief strategy officer and is also co-founder of Toronto-based “food sharing” platform Tre’dish, resigning from the board. Wilagr’s LinkedIn does not list him as a Facedrive employee currently.
Susan Uthayakumar, president of global sustainability business division at Schneider Electric, and Suman Pushparajah, chief operating officer at Facedrive, were appointed as new members of Facedrive’s board this year.
According to Facedrive, Pushparajah, CEO Navaratnam and executive vice president and director Junaid Razvi collectively hold approximately 49 percent of the company’s total issued and outstanding shares.
This week, Facedrive announced it completed another acquisition. This latest deal saw Facedrive acquire a 100 percent stake in EcoCRED, which it said is an environmental sustainability platform, for $1 million USD. On its website, EcoCRED said its app allows users to build eco-friendly habits, discover sustainable products, and read insightful articles about climate change.
Facedrive said the deal will allow the Ontario company to implement EcoCRED’s carbon-offsetting technology “throughout its ecosystem of application verticals.”
Image source Facedrive via Facebook.