Good morning, BobKS,
I'm hunting for the misleading commentaries from Kyle and company. Without yet cross-referencing to the ijoy timeline (I'll get to that soon enough), here's an excerpt from Page 21 of the most recent 10K which has a publication date of October 13, 2016:
We depend on a small number of third-party suppliers and manufacturers for raw materials, components and certain of our electronic cigarette products. We depend on such suppliers to supply materials, components and products in a timely manner, in adequate quantities, consistent quality and at reasonable costs. An interruption in supply and or consistency of our products may harm our relationships and goodwill with customers, and have a materially adverse effect on our cash flow and our operations.
Although we believe that several alternative and redundant sources for our products are available, any failure to obtain the components, chemical constituents and manufacturing services necessary for the production of our products could have a material adverse effect on our business and prevent us from timely execution of our business plan and may result in additional expenditures of time and money in seeking viable new sources of supply and manufacturer alternatives.
Now here's an excerpt from Page 27 of the initial set of proxy materials:
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.
So I would believe that the sh*t hit the fan in August 2016 and that the 10K that followed was very incomplete as regards stating the extent and seriousness of the manufacturing problems.
...and that's why I've written a few times that you might consider the CPA firm as one of the "problem parties" as you go about assessing blame.
I hope I've been helpful here and that you will find success in the legal avenues you'll be taking!
