Photo Credit: Bolt
At the heart of the lawsuit was a $30 million personal loan secured by Bolt for Beslow, which he defaulted on. The legal action, initiated by investor Activant Capital, accused Beslow of financial mismanagement and board manipulation.
Under the proposed settlement, Bolt will cancel 13,397,270 common shares previously owned by Beslow, equating to $37,378,383. This move is intended to resolve the principal loan, along with accrued interest and related expenses.
Activant Capital, representing the interests of former board member Steve Sarracino, has agreed to sell back 18,247,337 of its shares to Bolt for $36,494,674. This decision came after choosing not to participate in a previous tender offer.
The controversy also involved the removal of board members, including Sarracino, who were replaced by individuals perceived to be more aligned with Beslow's vision. This led to allegations of a hostile takeover and breach of fiduciary duties.
Amidst the boardroom drama, the U.S. Securities and Exchange Commission scrutinized Bolt and Beslow for potential violations of federal securities laws during fundraising activities. However, this probe has since been dropped.
Despite the cancellation of shares, Beslow is expected to maintain control of the board. An independent committee has been established to oversee any future compensation or arrangements involving him.
This settlement marks a turning point for Bolt, potentially ending a tumultuous chapter in its history. It reflects a broader trend in the tech industry, where founder-led companies are increasingly held accountable by investors and regulatory bodies.
