Pages 27-30 of the proxy material tell the story of how the proposed transaction came about. What I found very interesting within those pages was the story of the ijoy calamity, and here's that paragraph:
In May of 2016, the Company began to have IJOYGROUP Co. Ltd., a manufacturer based in China (“IJoy”), co-design and manufacture its “Limitless” branded vaping products and the Company received its first shipment of products from IJoy in June of 2016. The Company continued to receive product shipments of its “Limitless” branded products from IJoy until August, 2016. After this time, IJoy failed to supply the Company with products despite the Company’s continued efforts to secure supply, and purportedly manufactured and sold products under the Company’s “Limitless” brand without consent. As a result of not having an adequate supply of its Limitless branded products, the Company’s revenues significantly declined, particularly in the final three months of the calendar year ended December 31, 2016 and its working capital was significantly depleted.
I have no idea what it takes to sue a Chinese company, but that involvement with ijoy was really the beginning of the end for VHUB. It is also interesting to note from the proxy materials that another of Mr. Li's company's namely Jasper was also a manufacturer, and somewhere there is a story as to why that relationship with VHUB didn't continue. The 10K did identify, if I'm remembering correctly, the continuance of having manufacturers in place as one of the stated "risk factors" for VHUB.
