NEW YORK - Investment firm Echo Lake Capital has publicly called for the immediate termination of Shai Gozani, Chairman and CEO of Neurometrix, Inc. (NASDAQ:NURO), citing a significant decline in the company's stock price and other issues under his leadership.
Echo Lake, in a letter to the Neurometrix Board, outlined ten reasons for their demand, including a 99% drop in NURO's stock since its initial public offering, Gozani's compensation exceeding $10 million since the IPO, and charges brought against him by the Federal Trade Commission (FTC) for various wrongdoings at NURO.
The letter also highlighted Gozani's decision to issue shares at prices substantially below net cash value and his minimal ownership of NURO shares.
Additionally, the investment firm criticized the board's composition, which includes a stand-up comedian and a practicing doctor, questioning their suitability and alleging a failure to act in shareholders' best interests.
The FTC had accused Gozani of engaging in unlawful acts and practices, and according to Echo Lake Capital, Gozani personally paid $4 million as part of a settlement. The firm also noted that Neurometrix has been selling stock at a significant discount to its net cash per share, with over 460,000 shares sold at an average price of $3.40, despite having $11.80 of net cash per share as of December 31, 2023.
Echo Lake Capital, as the second-largest shareholder of NURO, expressed concern over Gozani's refusal to engage in discussions with them and the board's decision to keep the company public despite a market cap of only $5.5 million at the end of 2023.
The firm's letter to the board is part of a broader public criticism of Neurometrix's management and performance, with the aim of protecting investor value. Echo Lake Capital has suggested that the board should fire Gozani, cancel the at-the-market (ATM) offering, and consider liquidating the company.
This report is based on a press release statement from Echo Lake Capital.
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