Following last week’s proxy challenge by its largest shareholder and chief strategy officer, Steven Urvan, Ammo, Inc. announced that it had placed Urvan and GunBroker CFO Susan Lokey on administrative leave.
As reported, Ammo, Inc.’s largest investor, Urvan Group, nominated seven board members and seeks to boost the company’s profit through e-commerce in firearms, outdoor sporting and related goods.
Urvan sold GunBroker.com, a company he founded and ran for over two decades, to Ammo in 2021 and believes the company could reach $1 billion in annual sales by growing its online platform and entering new categories.
The Board nominations come as Ammo announced plans to separate its manufacturing and online marketplace this month, just 16 months after completing the acquisition of GunBroker.com.
On Tuesday, Ammo, Inc. said Urvan, shown right, and Lokey had been placed on administrative leave because it believes the two may have misappropriated the company’s data and digital assets and transmitted that data to a third party controlled by Urvan and with which Lokey is associated. The company said it had started an internal investigation into the alleged misconduct several weeks ago. And during the pendency of the inquiry, these Urvan and Lokey would remain suspended from their duties.
The company’s Board formed a special committee in connection with the conduct of Urvan and issued the following statement:
“We are deeply concerned by the preliminary results of our investigation to date. We are committed to ensuring that all aspects of the company’s business are conducted with integrity, transparency and oversight. The company seeks to protect its data and digital assets against all forms of misappropriation.
“Mr. Urvan was aware of our concerns and our prior attempts to investigate and discern more information. We believe that his recently announced proxy contest to replace the entire Board may be, at least in part, an attempt by Mr. Urvan to thwart our investigation and driven by his desire to avoid accountability.
“Nevertheless, we will continue our thorough investigation into the alleged misconduct. We will conduct this investigation with the urgency and diligence it deserves, and we will take responsive or preventative actions that the Special Committee determines to be appropriate.
“In the meantime, to protect the company and its customers, stockholders and other stakeholders, the Special Committee has determined to place these individuals on administrative leave. It is untenable to allow these individuals continued access to the company’s systems, data, property or employees while the investigation is underway and until we fully understand the nature and scope of their prior actions.
“In the meantime, we remain committed to delivering exceptional and innovative products and experiences for outdoor sporting enthusiasts that drive value for our shareholders and other stakeholders.”
Ammo Inc. said it currently does not expect the investigation to yield any findings that impact the financial results, balance sheet or business prospects of the company.
Photos courtesy Ammo, Inc.
