Less than a year after its acquisition of Infinity Technologies, Concord, Ont.-based On the Go Technologies Group has severed its ties with Frank and John Abate, the former owners of Infinity.
In a letter to its suppliers and vendors, On the Go CEO Stuart Turk states, “We have been working with Frank and John Abate over the past six months trying to resolve issues raised by them subsequent to the purchase of the shares, despite the fact that the company has satisfied obligations to them.”
Turk goes on to write “In late January I thought we were close to resolving matters, but unfortunately (on May 26) Frank, John and the former owners of Infinity threatened legal action through their lawyers, leaving the company little option but to elect to terminate their employment with the company.”
The Mississauga, Ont.-based value-added reseller was acquired on July 19, 2005 and according to Infinity’s former CEO Frank Abate some issues began to arise last September.
“This has been going on for well over eight, nine months,” said Abate in an interview with Computer Dealer News.
“I don’t want to say there was a line being drawn in the sand, but I think eight, nine months to resolve some fairly basic issues is a long time,” he said.
At this time neither side will comment on the conflict that led to the termination of Frank and John Abate’s employment. Both parties are also keeping quiet about potential legal pursuits.
“Staff have called me and I’ve been very consistent with my message to them which is: the company (On the Go) is paying for services rendered, so the best thing to do is do your job to the best of your ability. You owe it to yourself, the company and customers,” said Frank Abate.
He carries a similar message to customers: continue to do what they’ve always done.
“I’m sure the company (On the Go) will appoint the right sales and technical people and we’ll ensure customers are well looked after.
No one wants to be in a position where they’re hurting customers.”
Abate added that since the day he and his brother John left, they tried to present the situation as fairly as possible and “that this should not be about On the Go loyalties versus Infinity loyalties versus Frank or John loyalties.”
Abate said he hopes both parties (the Infinity shareholders and On the Go management) went in with their eyes open, adding that “there were some differences of opinion that didn’t get resolved — this kind of stuff occurs.”
In an e-mail to CDN, Turk said “We have had some of our best sales since they left and we don’t see any reason why this will not continue. Both Frank and John are bound by non-compete agreements and we expect them to live up to them.”
Abate said they don’t have to worry. “I have no problem living up to our part of the bargain,” he said.
Abate is pleased that for the first time in 25 years, he doesn’t have a quota, a target and someone that he has to talk to in the next 10 minutes.
“It feels kind of good. My unofficial business plan is to work on my golf game for the next two months, work on my handicap which has suffered miserably over the last year, especially last summer after the acquisition of Infinity,” said Abate.
According to its latest quarterly filing with the U.S. Securities and Exchange Commission, On the Go Technologies incurred a net loss of US$2.9 million during the nine months ended April 30, 2006.
In the nine months ended April 30, 2005, the company incurred a net loss of US$955,000.
In the filing, On the Go also states “Management believes that despite the recent losses and limited working capital, it has developed a business plan that, if successfully implemented, can substantially improve its operational results and financial condition.”
In January 2006 the company completed its purchase of two more Toronto area solution providers, Island Corporation and Solutions in Computing.