5/24/2007Nestor Introduces Speed Camera Adoption Program, Fires CEO
Nestor introduces Adopt-A-Speed camera program and fires its CEO.
Struggling photo enforcement vendor Nestor, Inc. fired its chief executive officer last week and announced yesterday the first participants in its new Adopt-A-Speed Camera program. Last month the company began allowing a group of investors to directly fund a particular set of up to sixteen speed cameras. In return for providing $1.5 million in capital for their installation and upkeep, the investors will keep a $5-6 bounty on every speeding ticket issued by the adopted devices. For cities with flat rate contracts, the investors holding the so-called "Speed Notes" will receive 17 percent of payments. The company intends to issue additional Speed Notes as it secures contracts for new speed cameras.
William B. Danzell's investment firm, Silver Star Partners, purchased a $250,000 share of the first Speed Note, according to a filing yesterday with the Securities and Exchange Commission (SEC). The innovative financing program, however, was not enough to convince Nestor's board of directors that the company has been headed in the right direction. The board unanimously voted to oust Danzell as CEO last week despite his effort to paint the company's most recent performance as its "best ever."
Nestor lost $1,509,000 in the first quarter of 2007, adding to the company's $23 million in debt. "These circumstances raise doubt about our ability to continue," the company admitted in a May 11 filing with the SEC.
As head of Silver Star, Danzell controls a majority stake in Nestor's stock and retains his position on the board of directors. Clarence A. Davis will serve as interim CEO until a replacement is selected. Nestor stock closed yesterday at 51 cents a share. Nasdaq gave the company an October deadline to double this price in order to retain its stock exchange listing.