SYDNEY (BRAIN) — The Australian stock exchange has stopped trading BikeExchange’s stock at the company’s request. According to the stock exchange, the company requested the trading halt because of an expected announcement of “a material capital raising.”
Meanwhile, Mark Watkin, the CEO of the global online bike marketplace, has resigned and in a management shuffle, Taylor Essick — the co-founder and CEO of bike delivery service Kitzuma — is taking over management of both BikeExchange and Kitzuma in North America. BikeExchange acquired Kitzuma last year for $3.4 million.
Sam Salter, a co-founder of BikeExchange and current board member, will be acting CEO as the company begins a search for a permanent CEO.
And in a third news item involving the company, apparently unrelated, bike delivery service Tribike Transport LLC is suing Kitzuma in North Carolina over alleged misuse of Tribike’s proprietary and confidential information. Tribike Transport and Kitzuma are both located in Asheville, North Carolina. Two of Kitzuma’s three co-founders, Essick and Chris Cosgrove, are each former Tribike Transport executives who left the company in 2020 before launching Kitzuma. Kitzuma’s business model is built around delivering fully assembled bikes door-to-door.
According to a BikeExchange statement, “The plaintiff is seeking unspecified monetary damages and the prevention of alleged further infringement by the company through a preliminary and permanent injunction.
"BikeExchange believes the allegations are without merit and will vigorously defend against the complaint. BikeExchange has engaged U.S. Counsel and is seeking advice on the defense of the claims. The business remains unaffected while the legal proceedings are in progress."
Essick declined to talk about the case with BRAIN.
Marc Lauzon, the founder and CEO of Tribike Transport, declined to talk to BRAIN on the advice of his counsel. Tribike Transport is launching a service that will deliver fully assembled bikes this spring, called THRU.
Trading halt after stock slump
BikeExchange’s stock was trading at less than 4 cents per share Australian ($0.03) when trading halted, down from a high of about 35 cents a share in March 2020.
CyclingTips reported that BikeExchange’s “cash reserves had dropped by almost AU$8.5 million in the first nine months of the financial year to date, with remaining funding available for just one quarter. That is, unless something changes, the company will be running on empty by the middle of this year.“
BikeExchange is the former owner of CyclingTips, which was later sold to Pinkbike and then acquired last year by Outside Inc., which also owns Bicycle Retailer & Industry News.
