Update on Internal Matters at AnalytixInsight

TORONTO–(BUSINESS WIRE)–$ALY.V #AI–Certain Directors and Officers of AnalytixInsight Inc. (“AnalytixInsight”, or the “Company”) (TSX-V: ALY) today provide an update on recent internal matters respecting its management and board of directors (the “Board”). Please note this Press Release has not been approved by all members of the Board.

On March 22, 2024, a meeting of the Board was held, during which the Corporate Secretary and Legal Counsel of the Company, Aaron Atin, advised four of the five members of the Board during an in camera session of the results of an investigation into certain serious issues of corporate governance, particularly in connection with several confidentiality agreements entered into with Company shareholders without any specified business purpose (the “Confidentiality Agreements”). Mr. Atin advised the present members of the Board that he would pose several questions to the lawyers representing the person (the “Person”) allegedly responsible for causing the Company to enter into the Confidentiality Agreements, and that he would report back the following week.

The next meeting of the Board was duly scheduled for March 28, 2024 (the “March 28 Meeting”), at which Mr. Atin expected to provide additional information to the Board concerning the investigation into the serious corporate governance issues and seek direction from the Board on how to proceed in light of the initial findings. In addition, the Interim Chief Executive Officer and President of the Company expected to present details of a report on historical expenses of approximately $544,269 that had been requested by the auditors and that had been promised that week.

The evening before the March 28 Meeting, a director of the Company Jith Veeravalli advised the other members of the Board that he was unable to attend the Meeting as he would be traveling at the specified time. Director Chaith Kondragunta agreed with Mr. Veeravalli that the meeting should be rescheduled on the basis that he preferred to have all of the members of the Board present. Two minutes before the Meeting, Prakash Hariharan advised that he was unable to attend the Meeting as he was in transit. Messrs. Kadar and Gardner joined the meeting at the scheduled time. However, with only two members of the Board present, quorum could not be established and the meeting could not convene. Shortly thereafter, Mr. Atin sent an email to the Board in which he noted that it was important for shareholders to be made aware that management was trying to address several serious corporate governance issues, but that members of the Board had failed to engage. He attached a draft press release disclosing these matters.

Later that night, a lawyer from a well-known Canadian law firm (the “Firm”) purporting to represent the Person sent an email to Mr. Atin and Natalie Hirsch, the interim President and Chief Executive Officer of the Company, stating as follows:

I have been provided with a draft press release titled “AnalytixInsight Provides Corporate Update”. Management is subject to the authority, direction and control of the board of directors. This press release has not been authorized by the board of directors. To my understanding, the majority of the board does not support the issuance of the press release or the messages contained therein.

I am putting management on notice that if management issues any further press releases dealing with governance matters that have not been first approved by the board by majority vote, or has any further external engagement in relation to governance matters that are not first authorized by the board by majority vote, members of management who participate in or authorize such press release may be terminated for cause, and may be sued by those who are defamed by the press releases issued.

I want to be clear that the draft press release circulated today has not been authorized by the board, and management would be acting without authority if it issues the release.

When the board next meets, I expect that the directors will be asked to authorize resolutions dealing with unauthorized conduct by management. In the meantime, management should do nothing that is not expressly authorized by the board, and wait for direction from the board, which will be forthcoming.

The lawyer representing the Person claimed in his email that he had spoken to two members of the Board and that he believed his email enjoyed the support of the majority of the Board. Messrs. Gardner and Kadar confirmed that they had not spoken to the lawyer representing the Person. To date, Messrs. Kondragunta and Veeravalli have yet to confirm to the Company whether the lawyer representing the Person sent his email with their instructions or knowledge.

On April 1, 2024, the Company retained Groia & Company (“Groia”) as its lawyers with respect to an ongoing review and inquiry into, inter alia, ongoing corporate governance issues of the Company.

On April 3, 2024, Prakash Hariharan, a member of the Board and the former Chief Executive Officer of the Company sent an email to Mr. Atin (in his capacity as Corporate Secretary) requesting that he call a meeting of the Board for April 5, 2024, at 1:30pm (Toronto time), “to discuss recent governance issues”. Mr. Hariharan claimed in his email that his request was made on behalf of himself and Mr. Kondragunta; however, neither Mr. Kondragunta nor any other member of the Board directed Mr. Atin to convene the meeting, as required under the by-laws of the Company (the “By-laws”).

On April 4, 2024, Mr. Atin advised Mr. Hariharan and the other members of the Board that he had not received direction from any other director to call the meeting requested by Mr. Hariharan, and therefore the request was not validly made in accordance with the By-laws. He also explained that the minimum notice period to hold a meeting on April 5, 2024, had since expired, but that Mr. Kadar, in his capacity as Chairman of the Board, had directed him to call a meeting of the Board for April 9, 2024. In accordance with the By-laws and the Company’s standard practices for the past several years, Mr. Atin circulated a Zoom invitation via email, including the proposed agenda. Mr. Hariharan subsequently sent several additional emails to members of the Board, excluding the Corporate Secretary, claiming that his request was duly made and that the meeting would proceed virtually on April 5, 2024, using a Teams link Mr. Hariharan provided.

On the morning of April 5, 2024, upon instructions from Ms. Hirsch and Mr. Kadar, Mr. Atin advised Mr. Hariharan that Mr. Kadar was willing to waive the minimum notice requirement and that, assuming Messrs. Kondragunta, Gardner, and Veeravalli similarly agreed, the meeting requested by Mr. Hariharan for later in the day could be convened. He further asked for Mr. Hariharan to expand on his agenda item “to discuss recent corporate governance issues” so that the Board and management could have notice. Mr. Atin subsequently updated his Zoom invite to accommodate Mr. Hariharan’s requested time of 1:30pm (Toronto time) and agenda item, notwithstanding Mr. Hariharan did not offer any clarification. Messrs. Veeravalli, Gardner, and Kadar (together representing a majority of the Board) accepted the invitation, which was circulated at approximately 10:00am (Toronto time).

At approximately 12:30pm (Toronto time), the Chairman, Vince Kadar, sent an email to the Board confirming that the meeting would convene using the Zoom link circulated by Mr. Atin. Attached to Mr. Kadar’s email was a letter (the “Derivative Action Letter”) addressed to the Board from Messrs. Gardner and Kadar, in their capacities as independent director and Chairman of the Board, respectively, and Ms. Hirsch and Mr. Atin, in their capacities as officers of the Company, describing several serious corporate governance concerns, the vast majority of which had been previously disclosed to the Board at prior meetings. Enclosed with the Derivative Action Letter were copies of the Confidentiality Agreements. In the Derivative Action Letter, the Signatories requested that the Board pass a resolution and instruct management to commence a proceeding seeking certain specified relief related to the serious corporate governance concerns, failing which the Derivative Action Letter noted that the signatories intended to commence an application seeking leave to bring a derivative action in accordance with the timelines set out in the Business Corporations Act (Ontario) for the above-described relief. Shortly after the Derivative Action Letter was sent, Mr. Atin updated the agenda in the Zoom invitation to include an item for review and discussion of the Derivative Action Letter.

At 1:30pm (Toronto time), Messrs. Kadar and Gardner joined the meeting using Mr. Atin’s Zoom link at the time requested by Mr. Hariharan. Messrs. Kadar and Gardner waited for over 30 minutes. However, despite numerous phone calls, texts, and emails starting at 1:33pm (Toronto time) to Messrs. Kondragunta, Hariharan, and Veeravalli, none of them joined. The reminder texts sent to Mr. Veeravalli during this period were confirmed as “Read” shortly after they were received.

At 2:00pm (Toronto time), upon direction from Mr. Kadar in his capacity as Chairman, and in compliance with the By-laws, Mr. Atin circulated another Zoom invitation to convene another meeting of the Board for April 9, 2024, including the same urgent agenda items as the meeting that was scheduled to be held earlier that day. Mr. Veeravalli subsequently declined the invitation. Mr. Gardner has accepted the invitation. Mr. Kondragunta and Mr. Hariharan have not yet responded to the invitation.

At 2:30pm (Toronto time), the Board and Ms. Hirsch received an email (the “Email”) from a lawyer at the Firm, even though that Firm only acts for the Person advising that:

The properly called meeting of the Board of Directors (the “Board”) of AnalytixInsight Inc. commenced at 1:32 pm (Toronto time) on the Teams link provided with the meeting notice, after waiting to ensure that guests had time to join the meeting. We note that two directors failed to attend the arranged meeting and sent correspondence that they had an alternative meeting underway. Unfortunately, this correspondence came to the attention of the Board Meeting after the business of the Board Meeting had been completed.

At the Board Meeting a quorum of the Board met and determined to elect a new Board Chair, Mr. Chaith Kondrgunta [sic]. The Board also determined to terminate the Secretary for cause, and established a process for press release approval that requires a majority of directors to approve any press release in writing (email being satisfactory evidence of such approval) prior to dissemination of any press release. Finally, the Board formed a Special Committee, consisting of Chaith Kondrgunta [sic], Jith Veeravalli and Prakash Hariharan, to, among other things, investigate governance concerns, and exercise all powers of the Board other than those reserved under Section 127(3) of the Business Corporation Act (Ontario).

The Board will advise management of the changes and work with management to prepare a news release for dissemination prior to the opening of trading on April 8, 2024. Directors are reminded that the policy on press releases is currently in effect and that no release may be issued by the Company without prior approval in writing of the majority of the Board.

At approximately 7:30 pm (Toronto time), the Groia firm sent a letter (the “Responding Letter”) on behalf of the Company to the Board disputing that the meeting described in the Email was duly called or properly constituted in accordance with the By-laws and historical practices, and that any and all actions undertaken, including the purported election of Mr. Kondragunta as new Board Chair, the termination of Mr. Atin, the Corporate Secretary, for cause (particularly in light of his role in the ongoing investigation and the Derivative Action Letter), the establishment of a purported Special Committee, or any limitation on the ability of the Company to disseminate proper disclosure to its shareholders are null and void and of no effect. Messrs. Kadar and Gardner, Ms. Hirsch, and Mr. Atin agree with the statements set out in this paragraph. The Responding Letter expressed concern that the actions described in the Email appeared to be taken by conflicted individuals and for improper purposes. The Company has serious concerns that the purported Special Committee’s attempt to terminate Mr. Atin, in particular, may constitute a “a reprisal against a specified individual” under section 121.6 of the Ontario Securities Act.

Later that night, the lawyer representing the Person sent an email to Groia claiming that the purported “Special Committee” decided today that the Groia firm “should stand down, and take direction only from the Committee”, that the Groia firm “is acting without authority”, and that “[t]here will be consequences” if the Groia firm persists. In response, the Groia firm noted that it had not received any evidence of a resolution, valid or invalid, that supports the demand for it to stand down and the Groia firm again asked the lawyer representing the Person to advise for whom he acted.

On April 6, 2024, the lawyer representing the Person sent to the Board a copy of a resolution of the purported “Special Committee” signed by Messrs. Hariharan, Kondragunta, and Veeravalli resolving for the Groia firm to only take instructions from any of them. In addition, the lawyer representing the Person confirmed that the Firm acted only for the Person and not the purported Special Committee, and that the Firm communicated “various decisions made by the board at its meeting yesterday, and that were made subsequently by the Special Committee established by the board” with the permission of Messrs. Kondragunta and Veeravalli. Even though he only acts for the Person, he further stated, “[i]n the next few days the Committee will retain new lawyers, untainted by past controversies or vendettas, to act for the company.”

Messrs. Kadar and Gardner, Ms. Hirsch, and Mr. Atin dispute that the resolution described in the above paragraph is valid for, among other things, the reasons set out in the Responding Letter. These directors and officers of the Company remain committed to taking all steps necessary to ensure compliance with all applicable Securities Law, including their obligation to ensure that the Company makes proper disclosure to its stakeholders and the capital markets at large. These directors and officers have also written to the regulatory authorities and have asked for their assistance in trying to deal with the matters set out herein.

About AnalytixInsight Inc.

AnalytixInsight is a data analytics and enterprise software solutions provider. AnalytixInsight develops and markets cloud-based platforms providing financial content, company analysis and stock research solutions to the financial services industry. AnalytixInsight holds a 49% interest in MarketWall S.R.L., a developer of fintech solutions for financial institutions in Italy.

Regulatory Statements



Natalie Hirsch

Interim CEO

(647) 955-2933