Category Archives: Manufacturing

CFO of struggling Battery company steps down

Microvast CFO, Craig Webster, is to step down and become special advisor to the CEO for one year. No immediate replacement has been named.

Microvast manufactures lithium-ion batteries for commercial electric vehicles. It has a 1,400,000 sq.ft. factory in Huzhou, China and it is in the process of building a 577,000 sq. ft. facility in Clarksville, Tennessee. It has its corporate office in Stafford, TX with other facilities in Florida,  Colorado and Germany.

The company got embroiled in political controversy last year. Originally it was awarded a $200 million grant from the Department of Energy to help finance the Clarksville plant, but the grant was rescinded in May 2023 due to the company’s alleged links with the Chinese government.

CEO Yang Wu resides in Hawaii. The company went public via a SPAC in July 2021. Like many companies taken public in this way, its shares are under water and now trade at 52 cents. For 2023, it had revenue of $307 million and a net loss of $106 million.

The company has shelved completion of the Tennessee facility while it seeks financing.

Mr. Webster became CFO two years ago, though he has been a non-exec director since 2012. A UK citizen, he was living in New Zealand at the time of his appointment. He agreed to relocate to the US after his appointment, though the company just paid for the costs of his immigration expenses.

Under the terms of his separation, Mr. Webster will receive a lump-sum payment of $48,000 and a monthly salary of $16,667 until April 2025.

SEC filing – 8-K – Microvast CFO resigns



CFO of Space Infrastructure company resigns

Erik Sallee, the CFO of Intuitive Machines (‘LUNR’), has resigned for personal reasons. Steven Vontur, the current Controller, will serve as the interim CFO while the company conducts a search for a permanent CFO.

LUNR is based in Clear Lake, near NASA and is developing products for space exploration. The company was taken public by a SPAC in February 2023.

Mr. Sallee is based in California and the company said he was pursuing other business opportunities in that state. Before joining IM, he was the Corporate Controller for Blue Origin. Prior to that he worked for Raytheon.

The company’s first launch is scheduled for mid-February with the spacecraft landing on the moon about a week after launch. A competing private company, Astrobotic, is set to make its first launch on January 8. Its craft takes a more indirect route to the moon, so both may land around the same time. Both missions are related to NASA’s Artemis program, which intends to put astronauts back on the moon.

LUNR’s stock has a wild ride since going public. It began trading at $10, rose to $136 later that month before crashing back down to $12 in March 2023, despite no news from the company. The stock currently trades at $2.53.

Revenues miss projections

In its investor presentation as part of going public, the company projected its revenue would be $291 million in 2023 and $759 million in 2024. In its latest quarterly report, revenues for the nine months to September 2023 were $49 million. All three of its main contracts were loss-making, with total cost of sales of $71 million for the same period.

At the end of September 2023, the company had backlog of $135 million. That doesn’t include anything from NASA OMES 3 space orbital program. The contract, which began in late 2023, is projected to be worth $719 million over five years and has been awarded to the joint venture LUNR has with KBR.

Nauticus Robotics, another nearby company with strong connections to NASA is also looking for a new CFO.

SEC filing 8-K – Intuitive Machines CFO



CFO of struggling food company steps down

Todd Mitchell, CFO and COO of RiceBran Technologies has resigned to pursue another opportunity. The company has appointed Bill Keneally to serve as interim CFO.

RiceBran has its head office in Tomball. It converts raw rice bran into stabilized rice bran and derivative products such as rice-based proteins.

The company has revenues of $42 million. It hasn’t made an operating profit for at least 15 years. The company has a market capitalization of $6 million as well as net debt of $6 million.

After its most recent quarterly results, the company announced it was undergoing a strategic review of all possible alternatives to generate improved returns to its shareholders.

Mr. Mitchell was appointed CFO in July 2019 and added the COO role in December 2021.

Mr. Keneally, who is based in Atlanta, is actually employed by CXO Partners, a consulting firm that specializes in placing C-suite executives on an interim basis. The agreement is on a month-to-month basis. RiceBran will pay CXO $45,000 a month.  The services covered include assisting in the preparation of SEC filings and maintaining the data room.

SEC filing – 8-K RiceBran CFO

Sugar Land business owner pleads guilty to bribery and bid rigging

Sudhakar Kalaga, a Sugar Land business owner, has pleaded guilty to a nine-year fraud in which he engaged in a bribery and bid rigging fraud to secure construction and maintenance work contracts.

Although the complaint filed in the Southern District of Texas doesn’t name the company, Toshiba International filed a lawsuit in 2019 against Mr. Kalaga and Pablo D’Agostino, a facilities manager employed by Toshiba in Houston. The company alleged that the two men conspired to trick it into awarding over $100 million in construction contracts to KIT Professionals, the company owned by Mr. Kalaga. Mr. D’Agostino died in 2019 before the case came to a conclusion.

From 2010 to 2019, Mr. Kalaga submitted fake bids to Toshiba to Mr D’Agostino, who coordinated the submission of the fake bids to make it appear Mr. Kalaga’s company was the low bidder. In exchange for rigging the bid process, Mr Kalaga paid Mr. D’Agostino millions of dollars in cash, luxury gifts and other items.

KIT Professionals has been awarded a lot of work by the City of Houston, although the guilty charge does not relate to any work done for the public sector.  According to the Houston Chronicle, KIT was awarded $55 million in contracts between 2008 and 2022 ($50 million from the city and $5 million from Harris County).

Mr. Kalaga and his wife also donated $93,550 to 25 city candidates from 2007 to 2019. Houston mayor, Sylvester Turner, received $25,000.

Mr. Kalaga now faces up to five years in prison and a possible maximum fine of $250,000. His sentencing is scheduled for June 20.

Houston SPAC to take Infrared Cameras public


Sportsmap Tech Acquisition Corp, a Houston SPAC (Special Purpose Acquisition Company) is to take Infrared Cameras Holdings (“ICI”) public in a $100 million deal.

ICI designs and develops thermal cameras and sensing hardware as well as a proprietary subscription software used to analyze thermal data points. Commercial applications include the detection of methane leaks in wells and pipelines and monitoring of conveyor belt equipment in warehouses. The business presumably got a boost with temperature screening during COVID.

ICI was formed in 1995 and is based in Beaumont, Texas. CEO Gary Strahan has lived there since he was two. He started out as a welder and diver, performing underwater non-destructive testing and then worked for companies developing infrared cameras before starting ICI.

No financial details about ICI were disclosed in today’s announcement.

Sportsmap went public in October 2021 with a $100 million IPO. The business aimed to make an acquisition in sports technology such as wearables, data analytics, new methods of fan engagement, and new esports and gambling platforms. Oh Well!

A couple of names well known to Houston sports fans are also Directors of Sportsmap.

  • Reid Ryan, former President of the Houston Astros. He is the son of Nolan Ryan.
  • Oliver Luck, former General Manager of the Houston Dynamo and former CEO of the Houston Sports Authority.  He is the father of Andrew Luck, the number one draft pick in 2012.

The deal should close in the first half of 2023. Under the terms of its IPO, Sportsmap has until April 2023 to complete a deal, otherwise it has to return the money it raised to investors.

SEC filing – 8-K Sportsmap ICI


Houston chemical company hires new CFO

Jeff Glajch has been appointed the new CFO at Orion Engineered Carbons. He replaces Lorin Crenshaw, who resigned in November to become CFO at Kansas-based Compass Materials. Bob Hrivnak, who had been the interim CFO, reverts back to being the Chief Accounting Officer.

Orion has its head office in the Kingwood area, though it is technically registered in Luxembourg. The company manufactures Carbon black, a powdered form of carbon used in consumables and additives for polymers, printing inks and coatings. It has 14 production sites around the world and revenues of $1.5 billion.

The company went public in 2014 and has a market capitalization of $1.2 billion.

Mr. Glajch joins from Graham Corporation, a New-York based manufacturer of equipment for energy, defense and petrochemicals, where he had been CFO for 13 years. Graham appointed a new CEO in August 2021, who was part of a business acquired earlier in 2021. In November 2021 Mr Glajch announced he would be retiring and leaving sometime in the second quarter.

In early February, the stock of Graham plunged by 30% following a surprise quarterly loss as a results of issues in the legacy business. Mr. Glajch received a severance of 1.5 times base salary of $325,000.

No compensation was disclosed for Mr. Glajch. His predecessor at Orion had a base salary of $421,000.

SEC filing – Orion Engineered CFO

CFO at Houston-based chemical company resigns after two years

Lorin Crenshaw, CFO at Orion Engineered Carbons SA, has resigned to become CFO at Kansas-based Compass Materials. Bob Hrivnak, the company’s Chief Accounting Officer will serve as the interim CFO while the company conducts a search for a replacement.

Orion has its head office in the Kingwood area, though it is technically registered in Luxembourg. The company manufactures Carbon black, a powdered form of carbon used in consumables and additives for polymers, printing inks and coatings. It has 14 production sites around the world and revenues of $1.4 billion.

The company went public in 2014 and has a market capitalization of $1.14 billion.

Mr. Crenshaw has been the CFO at Orion for exactly two years. Prior to that he spent many years at Albemarle, a chemical manufacturer. Compass Materials is another chemical manufacturer that has about the same revenues as Orion but a market capitalization twice as large.

When he joined Orion, Mr. Crenshaw received a $180,000 sign-on bonus that was paid over two years. However all the executives got a reduced bonus payout for 2020 because EBITDA did not hit target.

At Compass, Mr. Crenshaw will receive a substantial increase in base salary (from $421,000 to $537,000) and a one-time bonus of $780,000 (most of which is to be paid in January 2022).

Mr Hrivnak joined Orion in 2020. He was previously the CFO for just over a year at Spokane-based Clearwater Paper. At that company he was hired by a new CEO who lasted even less time! Prior to that, he worked for a number of companies including Fluor and Tyco.

SEC filing – Orion CFO departure

Chemical manufacturer to be sold for $2.5 billion

Kraton Corporation Logo (PRNewsFoto/)

Kraton Corporation, a chemical manufacturer with its head office near George Bush Intercontinental Airport, is to acquired by DL Chemical for $2.5 billion.

About 50 years ago, Kraton invented styrenic block coploymers, a type of synthetic rubber that is strong, durable and flexible. The products are used in products as diverse as asphalt, roofing and diapers. The company was originally a unit of Shell, before being sold to a private-equity firm in 2001. It completed its IPO (initial public offering) in December 2009.

Its main manufacturing location is in Belpre, Ohio, though it also has major facilities in France, Germany and Sweden. The company also has joint ventures in Taiwan and Japan.

In 2016, the company acquired Arizona Chemical for $1.3 billion. In doing so, it pushed its leverage to almost 5x EBITDA. With hindsight, that turned out to be a poor move as the company was hit by the US-China trade war. In 2020 it ended up writing off $400 million of the $771 million goodwill from that acquisition. Margins in its legacy business also declined.

In early July, the company announced that it had hired JP Morgan to explore a potential sale. At the time, the share price was around $32 per share. DL Chemical, which is based in Korea, will pay $46.50 per share. Last year, DL Chemical acquired the Cariflex business from Kraton for $530 million.

The management team are in line for some large severance payments. Kevin Fogarty, CEO since 2008, will get a cash severance of three times base salary plus three times target bonus, or $6 million in total. All options and restricted awards will also vest. That could be worth around $20 million to Mr. Fogarty.

Atanas Atanasov, CFO since 2019, will get three times base and bonus, or $1.7 million. His restricted awards will also vest (I estimate this to be over $4 million).

The deal is expected to close in the first half of 2022.

SEC filing – Kraton sale

Cameroon man sentenced to wire fraud conspiracy

Frankline Bate Okpu, a Cameroon man illegally residing in Houston, has been sentenced to 36 months in prison for his role in stealing $726,000 from a South Korean company.

Okpu managed a team of eight. Seven have previously pleaded guilty. One man, a Cameron native and formerly residing in Dallas, is a fugitive at large.

The South Korean company involved was Daesang Corporation, a leading producer of consumer foods and food additives. Also involved was JY Globalfoods Company (JY), a Korean trading company that acts as a bridge for international companies looking for Korean products or introduces foreign products to the Korean market.

Fake website

Okpu set up a fraudulent entity and fake website called Trinity Food Inc. This was a knock-off of a legitimate business called Trinity Foods Inc, based in San Diego.

Daesang wanted to import chicken and pork products into Korea to meet the demands from the Korean Moon festival holiday, held each year in the fall.  In June 2017, JY found the fake Trinity Food online and started communicating with ‘Juliet Vaquez”, “Ray Morgan” and “Albert”, purportedly employees of Trinity Food. In fact, these were false names created by the conspirators.

JY brokered the purchase of foodstuffs for Daesang and the conspirators sent two proforma invoices to Daesang for $128,250 and $598,400. In September 2017, Daesang paid the amounts into a Bank of America account in Houston in the name of Trinity Food, prior to the supposed shipment.

Money transferred to other accounts

That money was then withdrawn by the conspirators and was deposited into other bank accounts in Houston (at Regions Bank and First Convenience Bank). Some of the money was cashed through cashier’s checks in Los Angeles, Miami and Maryland.

Daesang never received the product they paid for and sought help from the US authorities.

After serving time, Okpu will be subject to 36 months supervised release and will have to pay restitution of $350,939.21. Sentencing has not yet occurred for the others that pled guilty.




Huntsman CFO resigns to take senior position with LDS Church

Sean Douglas, the CFO of Huntsman Corporation, has announced he is resigning to take a senior leadership position with The Church of Jesus Christ of Latter-day Saints. His last day will be July 1, 2021.

Huntsman, a chemicals company with revenues of $6 billion, is based in The Woodlands. However, it was founded in 1970 in Utah by Jon Huntsman, Sr. The Huntsman family is Mormon and just last month, it was announced that James Huntsman, his son (but not an employee of the company), was suing the church, accusing it of spending members’ tithes meant for charity on commercial purposes.

Mr. Douglas has been the CFO since January 2017. He joined the company in 1990, though he left the company between 2012-2015 to perform charitable services for the Church.

The company has initiated a search for a new CFO and is evaluating both internal and external candidates. The company expects to appoint a new CFO before July.

SEC filing – Huntsman CFO resigns