Document #50 contains additional info based on the initial document that was published, the plaintiffs do have strong arguments in regards to "the gross mismanagement of SIAF" and "the misleading and false statements issued (or failed to be issued) to SIAF’s Board, its shareholders, the investing public, and governmental regulators"
These are the lines that caught my attention. Nothing new though but still interesting topic to talk about.
6. Upon information and belief, the Individual Defendants’ refusal to engage with shareholders and continuing gross mismanagement of the Company outlined herein, including the purposeful dilution of existing shareholders equity in the Company, has been an intentional and methodical scheme that has successfully transferred the bulk of SIAF’s assets and value to third-party entities that the Individual Defendants have related interests in, including SIAF’s formerly wholly-owned subsidiary Triway. This value transfer scheme was ultimately accomplished through a series of various loan, financing, and security agreements between SIAF, Triway, and other third parties, details of which were never properly disclosed to shareholders or the investing public at large.
83. On April 22, 2017, SIAF published a document titled “Aquaculture Carve Out Q&A,” which asserted that the enterprise value of Triway was $340.6 million and that its value resulted from Aqua Farms 1-5.
84. However, in the SAIC filing, SIAF asserted the total asset of the five Aqua Farms being a mere $12.3 million. Realistically, it is highly improbable that the enterprise value could be an astronomically high 27.7 times more than the assets are worth.
85. Indeed, shareholders and Plaintiffs now have reason to believe that the carveout was never intended to benefit SIAF, but instead was undertaken in order to reduce SIAF’s ownership interest in Triway to the benefit of the new owners in Triway, whom it is believed that the Individual Defendants have personal relationships and/or indirect ownership of Triway themselves.
... 109. Moreover, SAIC filings reveal material inconsistencies among revenue reported to the SAIC in China, revenue reported to the SEC, and in Press Releases to U.S. shareholders and investors in the same time periods. For example, in 2017, SIAF reported that the five Aqua Farms generated $447,080 in revenue in the annual report filed with the SAIC. However, in its 2017 10K, SIAF reported to the SEC nearly $17 million in revenue generated by the consulting services by Capital Award Inc. (“CAI”), which supposedly provided technology services to Triway to support the operation of the farms.
110. The stark difference between the revenue reported to the SAIC and the “consulting services” revenue puts the accuracy and veracity of the numbers reported to the SEC into question, as it appears improbable for a company with a supporting role in the business, such as CAI, to generate revenue as many as forty times more than the actual business, Triway
These raises a lot of questions in regards to the real value of Tri-Way.
Document #46 also contains a lot of interesting infos.
Overall, If the goal is to appoint a new management team, then I highly favor this lawsuit.
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