The founder of an Ottawa-area security firm whose high-profile clients include the LCBO and pot powerhouse Canopy Growth has left the company as part of a major management shakeup and will be replaced by a former top executive at the Canadian Security Intelligence Service.
In a news release on Monday, Almonte-based 3|Sixty Risk Solutions said former chief executive Thomas Gerstenecker, who launched the company six years ago, has resigned from his position and stepped down from the board of directors.
The company said Gerstenecker’s efforts were “greatly appreciated” but provided no explanation for his departure. Gerstenecker did not immediately respond to requests for comment.
The company said Andrew Ellis, who served as CSIS’s assistant director of operations from 2013-16, is joining the board and will take over as CEO on an interim basis.
In addition, Margarita Simkin, the co-founder of Toronto-based security firm INKAS Group, has been appointed to the board and will take on the role of interim chief operating officer. Meanwhile, former 3|Sixty chief financial officer Ernest Petrasovic has also resigned. Nitin Kaushal, who chairs the firm’s audit committee, will fill in as CFO until the company finds a permanent replacement.
The moves represent a dramatic C-suite overhaul at 3|Sixty, which rose from a fledgling startup with two trucks and 10 employees three years ago to a publicly traded firm with more than 600 employees and 120 vehicles.
A former member of the Canadian Forces’ elite special operations Joint Task Force 2, Gerstenecker started 3|Sixty as a small security consulting firm in 2014.
The company eventually branched out into the cannabis transport space and made a name for itself after landing big-name clients such as Smiths Falls-based Canopy Growth, the country’s largest pot producer.
After acquiring competitor Total Cannabis Security Solutions and going public through a reverse takeover early in 2019, 3|Sixty acquired INKAS Group in a $13.75-million deal in a bid to challenge market leaders Brink’s and GardaWorld for national supremacy. The firm also landed deals to provide security services at LCBO outlets across the province.
Millions in losses
“We can kind of supercharge that growth and be competitors to the other two key cash-and-transit companies,” Gerstenecker said in an interview with OBJ last year. “I think we are definitely positioning ourselves to be noticed.”
But 3|Sixty was never able to turn the corner financially, posting a total net loss of nearly $11 million in the first three quarters of fiscal 2019. This spring, the company announced it was delaying the filing of its fourth-quarter and full-year results from fiscal 2019 due to “logistics and delays caused by the COVID-19 pandemic.”
In July, 3|Sixty delayed releasing its final 2019 results yet again, saying it needed to reassess financial statements related to its acquisition of Total Cannabis Security from the first three quarters of the year.
Gerstenecker said then the firm would continue to pursue its objective of “sustainable growth and profitability and seek to continue securing long-term, meaningful contracts.” The company estimated its total 2019 revenues were $29 million, up from $5.5 million the previous year.
Meanwhile, the firm’s market capitalization has fallen from nearly $35 million a year ago to just over $8 million today as its stock price has plummeted. On Monday, 3|Sixty said it has secured more than $6 million in new financing, adding it “continues to work expeditiously” to file all outstanding financial results.