June 4, 2024 - SHORT CIBUS (Nasdaq: CBUS)
Cibus Inc. (“CBUS”) is a North American agricultural technology company that develops and licenses its unique plant traits to seed companies for royalty fees. Cibus’ primary objective is to increase yields for farmers while reducing the use of crop protection chemicals and fertilizers resulting in higher farmer profits. Founded in 2001, Cibus’ technology has a “trait machine” that includes/excludes certain desirable/undesirable genetic traits for a particular genome (such as pod shatter resistance, herbicide tolerance, drought tolerance, disease resistance, etc.) faster and cheaper than competing technologies.

We found no evidence that Cibus’ gene-editing technology brings desirable new crops to market. Instead, we found farmer complaints of lower crop yields and lost revenues, along with multiple examples of large seed manufacturers and distributors walking away from joint ventures and partnerships with Cibus for a variety of seed types and seed traits.

In 2019, Cibus made a shocking statement about its technology. While Cibus’ entire business model relied on its trait machine allowing for “precision gene editing”, Cibus claimed its SU Canola wasn’t actually gene-edited, rather the result of an accident in a laboratory petri dish. Shortly after, Cibus sold its SU Canola assets for a mere US$ 2 million.

Dr. John Fagan, a senior author for GMWatch, said “it is highly preposterous that a company that has invested tens of millions in developing a particular method of gene editing would turn around and claim that its first commercial product made using this gene-editing method was not actually the result of that method but happened accidentally via random mutagenesis.” GMWatch further commented “Assuming that Cibus’ claims about the canola being a product of random mutation are true, it would raise serious questions about whether it has misled investors… hope and speculation based on an unreliable and poorly controlled technology seems an unconvincing business model.”

A study from Greens/EFA found that “in cases where speed is important, gene editing is not the quickest or most reliable way to produce crops with desired traits. In contrast, conventional breeding has proven highly efficient and successful in producing such crops.”

1. Failed Product Launches and Failed Partnerships with Little/No Revenues: Cibus worked 20+ years to generate commercial interest for its technology. We found that Cibus had a history of failed commercialized products that failed to generate any meaningful revenues including canola, rice, corn, potato, wheat, flax, yeast, bacteria, and microorganisms. If Cibus’ technology was commercially viable, we expect any number of previous partnerships would have already licensed and implemented Cibus’ technology into their respective products, invest in, or possibly bid for Cibus itself.
2. Fierce Competition Already Exists for Canola Seed Pod Shatter Design Traits: In August 2022 Cibus guided for a possible 2025 release date for its canola pod shatter design to partners. Cibus’ pod shatter design already faces significant competition in 2024 from manufacturers and distributors such as Arcadia Bioscience, Bayer, BrettYoung, Brevant, Brightseed, Canterra, Moolsec, Pioneer, and Winfield.
3. US$ 250 Million Overpayment to Insiders for Assets: At the time of its 2023 reverse merger, Cibus’ technology was valued at US$ 750 million for goodwill and R&D intangible assets, yet unexpectedly in its first year as a public company Cibus wrote-down the carrying value of its intangible assets by US$ 250 million. If Cibus’ technology is so good, why did Cibus write-down 33% of the value of its R&D and trait pipeline within its first year as a public company?!?
4. Chairman Accused of Misleading Investors: Cibus’ Chairman and CEO Rory B. Riggs (“Riggs”) has a history being listed as a defendant in multiple lawsuits alleging insider trading, unjustly enrichment, misleading investors, and breaches of fiduciary duties. We think that Riggs is up to his old tricks of pumping Cibus stock. In addition to pledged CBUS shares for personal indebtedness, in March 2024, Riggs adopted a trading arrangement to sell up to 300,000 shares by July 12, 2024.

We think investors have been duped into believing a promotional management team about an over-hyped technology previously tried, tested, and failed by some of the world’s largest seed manufacturers and distributors to provide exit liquidity for early-stage Cibus investors. As of 1Q’24, Cibus burned ~US$ 5 million in cash per month and generated less than ~US$ 200,000 in monthly revenues. With less than ~US$ 24 million in cash as of March 31, 2024, we calculate that CBUS will need to either generate significant revenues or raise capital to satisfy ongoing operating expenses by September 2024.

With little/no revenues from its technology, we are short CBUS and think that its stock is going significantly lower towards “zero”.

1. NON-CASH PAYMENT-IN-KIND REVENUES
2. DELAYED INVESTMENT LOSSES
3. EXORBITANT FEES PAID TO AFC MANAGEMENT
4. SIMILAR FIFTH STEET SCHEME RINSE AND REPEAT
5. “INDEPENDENT” DIRECTORS ARE FIFTH STEET CRONIES
6. ADDITIONAL FINANCIAL RED FLAGS

October 3, 2023 - SHORT AFC GAMMA (Nasdaq: AFCG)
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AFC Gamma, Inc. (“AFCG”) is a real estate investment trust (“REIT”) with a US$ ~400 million loan portfolio concentrated amongst multi-state cannabis operators collateralized by cultivation facilities, cannabis licenses & real estate. AFCG attracted conservative investor interest using a mid-teens yield shareholder dividends.

AFCG is 100% externally managed by AFC Management (“AFCM”), a related party privately owned by AFCG’s largest shareholder, CEO & Chairman Leonard M. Tannenbaum (“Tannenbaum”).

We think that AFCG materially overstated AFCG’s investment income and understated portfolio losses in order to pay out exorbitant fees to Tannenbaum’s AFCM at the expense of AFCG shareholders.

• Non-Cash Payment-In-Kind Revenues: PIK interest was substituted for cash in order to artificially inflate AFCG net income. In the past 3 years, AFCG increasingly recorded payment-in-kind interest income (“PIK interest”) instead of collecting cash interest payments from its loan portfolio borrowers. In 2022, AFCG’s non-cash PIK interest was 10% of net income. As of 2Q’23, PIK interest accounted for 37% of AFCG net income.

• Delayed Investment Losses: AFCG was slow to recognize losses to one of its largest credit facility (~20% loan portfolio) in order to maintain inflated asset valuations and exorbitant cash fees paid to Tannenbaum’s AFCM. AFCG recklessly lent out capital in an effort to grow management fees paid to AFCM, which led to poor underwriting and poor investments.

• Exorbitant Cash Fees to AFCM: In past three years since AFCG acquired its initial loan portfolio from Tannenbaum, AFCG paid AFCM $US 54.5 million in compensation and expense reimbursement for a concentrated US$ ~400 million loan portfolio. In 2022, AFCM was paid annual fees and expenses of US$ 19.7 million, equal to 5.3% of loans under management. In the first 6 months of 2023, AFCG paid fees and expenses of US$ 9 million to AFCM, equal to 4.9% of loans outstanding.

We question the authenticity of AFCG’s purported cash balance. On December 30, 2021, AFCG borrowed US$ 60 million from Tannenbaum which was repaid two (2) business days later on January 3, 2022. On December 28, 2022, AFCG borrowed $60.0 million only to be repaid four (4) business days later on January 3, 2023. Why would AFCG take sizeable short-term loans for less than a week at CYE its first two years in a row as a public company?!?

Other red flags exist. AFCG misled investors about the independence of its board of directors, audit, and valuation committee members. In 2018 the SEC found Tannenbaum guilty of misleading investors using a similar scam which resulted in substantial losses for shareholders.

AFCG’s dividends exceeded cash from operations since inception. AFCG has not repurchased shares despite trading at a discount to book value. In 1H’23, AFCG repurchased 10% of its 2027 Senior Notes at a 22% discount to par value which to us suggests a significantly lower price for AFCG’s common equity.

We expect a decline in AFCG net asset values and a lower shareholder dividend from insufficient cash from operations and rising credit losses. We are short AFCG and think that its stock price is going significantly lower… 

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1. U.S. DEPARTMENT OF JUSTICE INVESTIGATED DEXYCU SALES & MARKETING PRACTICES
2. FDA HURRICANE: REGULATORY MEETING, RECALL, INSPECTION, WARNING LETTER
3. HROW LICENSED UNPOPULAR LEGACY NOVARTIS DRUGS WITH LITTLE/NO RX GROWTH
4. IHEEZO FACES ESTABLISHED COMPETITION – FDA APPROVED COMPOUND SINCE 1955
5. LOSSES FROM PREVIOUS DRUG INVESTMENT FAILURES – HISTORY OF BAD ACTORS
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Click Link for Full Report February 22, 2023 - SHORT HARROW HEALTH ($HROW)
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Harrow Health, Inc. (“Harrow”, “HROW”) primarily sells ophthalmic prescription pharmaceuticals (“drugs”) using the ImprimisRx brand in the United States. Historically Harrow sold only bespoke compound drugs mixed at its compound pharmacies. In the past decade compound pharmacies have come under increased scrutiny due to fatalities from quality control issues without regulatory oversight. In recent years, Harrow tried to transition from a bespoke compound pharmacist to become a pharmaceutical development company through a variety of initiatives such as:

• Signed a deal with EyePoint Pharmaceuticals, Inc. (“Eyepoint”) (Nasdaq: EYPT) to sell, market, and promote Dexycu, EYPT’s drug approved by the Food and Drug Administration (“FDA”).
• Acquired a total of nine (9) licensed drugs from Novartis AG (“Novartis”) (NYSE: NVS) in two separate transactions paying over US$ 215 million in December 2021 and January 2023.
• Received FDA approval for another licensed drug, Iheezo, an ocular anesthetic in September 2022.
• Invested in drug development entities and spin-offs since 2017.

While investors have bought into the story of change, our findings suggest that at best, Harrow is an unprofitable stock promotion neglecting risk disclosures and quality control standards at its compounding pharmaceutical operations.

1. U.S. Department of Justice (“DOJ”) Investigation into Dexycu sales practices: In August 2022, Eyepoint received a DOJ subpoena seeking the production of documents related to sales, marketing, and promotional practices related to Dexycu. Harrow did not disclose this subpoena to investors despite being the responsible party for Dexycu sales, marketing, and promotional practices.

2. Harrow has not disclosed to investors recent FDA actions: In June 2022, Harrow received a FDA Warning Letter for false and misleading marketing claims. In August 2022 Harrow received a FDA Form 483 inspection report which cited unsanitary conditions and drug quality issues. Harrow did not disclose any such actions to investors. A few months later following these actions, the company issued a nationwide recall with the FDA.

3. Acquired Novartis drugs show abysmal growth: We reviewed Rx unit growth reported for Harrow’s nine licensed drugs from Novartis. Despite Harrow’s claim that sales of the FDA-approved Novartis drugs are an exciting growth opportunity, our research showed that these drugs have suffered from a massive decline in Rx unit fulfillments due to competition from alternative branded and generic drugs. To us, this suggests that Harrow licensed unpopular legacy Novartis drugs with little Rx unit count growth.

4. Iheezo does not look like a beacon of growth: Despite Harrow’s bullish comments about Iheezo, we expect the first branded ocular anesthetic in 14 years to have a tough time becoming a successful growth story. Iheezo’s compound was initially approved by the FDA in 1955 (~68 years ago) and faces established competition in a very mature category that shows little Rx unit count growth.

5. Off balance sheet drug development entities filled with losses: In recent years, Harrow made five off balance sheet investments into former Harrow subsidiary spin-offs (the “Fab Five”) generating significant losses for Harrow shareholders. One of Harrow’s investments, Surface Ophthalics (“Surface”), was written down to zero as of FYE 2021. Another Harrow investment, Melt Pharmaceuticals (“Melt”) filed and withdrew its S-1, implying limited interest since September 2022. These investments follow a similar pattern whereby Harrow insiders receive personal stock incentives in, employment and consulting fees from, Harrow’s former subsidiaries to enrich themselves.

Harrow burns cash from operations and relies on external financing for survival. We think Harrow did not disclose to investors the existence of a DOJ investigation because it would have compromised Harrow’s ability to raise capital. With significant liabilities managed by bad actors willing to enrich themselves at the expense of minority Harrow shareholders, we are short Harrow and think its stock is going lower.

FREYR MO I RANA GIGAFACTORY LAND SITE OWNED BY UNDISCLOSED INSIDERS
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FREYR Battery AS (“FREY”) is constructing an “ESG friendly” battery factory in Mo i Rana, Norway within Mo Industripark, owned and operated by Mo Industripark AS (“MIP”).

Until 2021, Helgeland Invest AS (“Helgeland Invest”) owned 49.3% of MIP. Øijord & Aanes AS (“Øijord & Aanes”) owns 20.4% of MIP and is a local contractor that builds electrical dams, bulkheads, road infrastructure, weather towers, etc.

MIP owns the land underneath FREY’s future battery factory. MIP also generates and sells its own electricity, its own shipping port to onload/offload, its own steel mill, and over 100+ occupied tenants that pay for rent and ancillary services.

On November 20, 2020, FREY signed a lease letter of intent with MIP to use an existing warehouse for a Customer Qualification Plant (“CQP”) and develop an empty lot for FREY’s battery gigafactory (“Giga Arctic”).

In November 2020, Bjørn Rune Gjelsten via Gjelsten Holdings (“Gjelsten”) acquired a majority interest in Helgeland Invest, MIP’s largest shareholder.

Helgeland Invest’s 2020 Annual Report disclosed ownership interests in both FREY and MIP and that its shareholder list included Øijord & Aanes. We believe that Helgeland Invest and Øijord & Aanes are undisclosed FREY insiders.

FREY’s lease letter of intent with MIP does not entitle FREY to leasehold improvement reimbursements, rebates, or credits, which makes the owners of the industrial park (undisclosed FREY insiders) are outsized beneficiaries of FREY infrastructure investments.

From 2019 to 2021, MIP’s historical carrying value was US$ 24 million. As of 3Q’22, FREY invested over US$ 103+ million to improve MIP’s land with casted foundation structures and basic infrastructure such as footings, grading, trenching, drainage, etc. With US$ 103 million invested and MIP worth US$ 24 million, why didn’t FREY buy MIP or develop a factory on land owned by FREY?

More expenditure planned. On June 29, 2022, FREY forecasted total estimated Giga Arctic construction costs of US$ 1.7 billion.

We think that FREY concealed the truth about MIP’s ownership because (1) negotiations about build out costs would have been significantly different with an independent third party at arm’s length and (2) FREY investment increases the value of MIP which is secretly owned by FREY insiders.

Investors rely on mangement and board representations to make investment decisions. Leasehold improvement expenditures should have been finalized and related party transactions disclosed, but were not.

Minority investors were not protected by FREY’s Board to negotiate reasonable terms at arms length. FREY did not disclose its relationship with MIP or its affiliated service providers.

FREY is constructing battery production lines using a US$ 20 million license from 24M Technologies who has partnered with other large formidable competitors with access to the same tech patents and processes (Kyocera, Volkswagen, Itochu).

FREY is a pre-revenue company that continues to invest heavily in land secretly owned by FREY insiders with no discernable proprietary technology that (somehow) obtained a US$ 2 billion valuation using a SPAC merger in 2021.

We are short FREY and think its stock is going lower.

Alphatec Holdings, Inc. (“ATEC” or the “Company”) is a medical technology company focused on surgical treatments for spinal disorders. ATEC generates revenues from surgeons using ATEC products in spine surgery procedures.

Since Patrick Miles’ regime change in 2017, ATEC’s purported 65+% revenue growth has vastly exceeded the growth rates of other spine competitors, including Medtronic PLC (NYSE: MDT), Johnson & Johnson (NYSE: JNJ), Stryker Corp. (NYSE: SYK), Zimmer Biomet Holdings Inc. (NYSE: ZBH), NuVasive, Inc. (Nasdaq: NUVA, “NuVasive”), among others.

ATEC attributed its standout performance to a strategic network of third party “independent distributors” responsible for 97% and 92% of total U.S. sales in ’21 and ’20, respectively.

However, evidence shows that ATEC employees and ATEC shareholders were used to secretly operate undisclosed related party distributors since 2017.

In our view, ATEC failed to disclose these related party dealings because of the impact it has on its reported revenues and inventories. We think that ATEC insiders colluded with undisclosed related party distributors to artificially inflate ATEC’s reported revenues and took advantage by selling ATEC stock at artificially inflated prices.

Fake sales resulted in fake costs of goods sold which are reflected as fake inventories on ATEC’s balance sheet.

Since 2018, ATEC’s reported cash outflows due to changes in net inventory levels consistently exceeded changes in net inventory balances on its balance sheet. In aggregate, we calculated a difference of US$ 31 million used to reconcile fake cash receipts.

Since 2017, ATEC shuffled through three (3) different auditors, including a CFO departure that coincided with an auditor change and a FDA product recall.

For revenues generated by independent distributors, court filings and distributor testimonies revealed that ATEC paid “top of the industry” commission rates including “bounty commission” and other undisclosed benefits to entice non-related party distributors to sell ATEC products.

U.S Food and Drug Administration (“FDA”) filings revealed that ATEC failed to disclose a major FDA product recall in 2Q’21, highlighting the extent to which ATEC insiders concealed the weaknesses of ATEC’s product offerings.

ATEC’s low quality sales required significantly higher payouts to distributors which resulted in significantly higher SG&A expenses as a percentage of revenue (94% in ’21, 98% in 1Q’22).

Historically, the more revenues ATEC generated, the more operating losses ATEC generated. With a net debt balance of US$ 177 million as of 1Q’22, we are short ATEC and think its stock is going lower…

Table of Contents:
1. AT LEAST FOUR (4) UNDISCLOSED RELATED PARTY DISTRIBUTORS … p. 2
2. UNDISCLOSED FDA PRODUCT RECALLS INDICATE ISSUES WITH TECHNOLOGY … p. 9
3. COURT FILINGS REVEALED CERTAIN DISTRIBUTOR SALES DOWN SINCE 2018 … p. 11
4. CFO CHANGE & AUDITOR SHUFFLE … p. 13
5. CMO LUIS PIMENTA SOLD 99.9% OF HIS ATEC SHARES … p. 14
6. RED FLAGS: CASH OUTFLOWS, OBSOLETE INVENTORY BALANCE, NET DEBT … p. 15

Click Link for Full Report
July 12, 2022 - SHORT GOGORO ($GGR)

Gogoro, Inc. (“Gogoro”, “GGR” or the “Company”) is a Taiwanese electric scooter manufacturer known for its battery-swapping business model. Since established in 2011, nearly all of Gogoro’s sales were from Taiwan, the majority from new Gogoro-branded electric powered two-wheeled scooters.

Gogoro’s 1Q’22 Earnings Call disclosed new vehicle registrations grew 57% in 1Q’22 year-over-year. With encouraging first quarter results (de-SPACed in April 2022), investor interest increased and GGR’s stock price rebounded by 50%+ from its recent lows.

To us, the optimism is unwarranted.

According to Taiwanese vehicle registration data, Gogoro’s 2Q’22 new vehicle registrations declined 20% year-over-year to 15,368, its worst second quarter unit sales volume since 2018.

While in 1Q’22 Gogoro new PTW registrations grew 57% year-over-year, 1H’22 Gogoro new PTW registrations declined 19% from 1H’20 and grew only 3% from 1H’21.

Increased competition from Kwang Yang Motor Co., Ltd. (“KYMCO”), the largest PTW manufacturer in Taiwan put pressure on Gogoro’s gross profit margins.

Gogoro’s 1Q’22 gross profit margin was 13.7%, significantly lower than the 20.9% forecasted to investors in its SEC filings as recently as March 2022.

Fewer new vehicle sales equate to fewer battery-swapping subscribers.

Increased competition equates to lower gross profit margins for a business that historically loses money.

Ultimately, we think Gogoro is a de-SPACed cash-burning over-valued stock promotion with declining user growth.

We are short GGR and think its stock is going lower…

Click Link for Full Report
February 3, 2022 - SHORT MP MATERIALS ($MP)

MP Materials Corp. (“MP” or the “Company”) owns and operates the Mountain Pass mine in California. Shenghe Resources Holdings Co., Ltd. (“Shenghe”) (CH: 600392) is a publicly traded Chinese state-owned rare earth metals refiner and producer who co-invested alongside JHL Capital Group LLC (“JHL”) and QVT Financial LP (“QVT”) (all three parties collectively “MP Insiders”) to buy the Mountain Pass mine out of bankruptcy in 2017.

Shenghe is a MP related party, owns 8% of MP shares, and is MP’s ~100% customer who had rights to 100% of MP’s production and 100% of MP’s net income until Shenghe fully recouped its investment.

We believe that since 2Q’21, MP and Shenghe executed an abusive transfer price manipulation scheme whereby Shenghe overpaid for MP concentrates to artificially inflate MP’s profits. The 2021 scheme conveniently coincided with the SPAC insider lock-up expiration so that MP Insiders could sell MP stock at artificially inflated prices.

As a result, Shenghe’s profits collapsed, MP’s profits soared, and MP Insiders dumped US$ 400+ million worth of MP stock in 2021 (this figure may increase as we await Shenghe’s yearly reported changes to MP shareholdings).

Evidence of transfer mispricing first appeared in 2Q’21 Chinese Customs records and Shenghe’s Chinese quarterly result segment disclosures. Chinese Customs records show 2Q’21 was the first time that Shenghe paid MP above market price as compared to Shenghe’s reported resale price. Shenghe’s Chinese filings show that in 2Q’21 & 3Q’21, Shenghe’s gross margins collapsed to 4% and 0.3%, respectively, down from ~25-30% on average since 2018.

Results from a 3Q’19 German academic economic feasibility study concluded that MP’s ore is not economically viable to harvest for rare earth metals while 12 of the 13 other well known rare earth mines outside of China are economically feasible at today’s current market prices.

A bill of lading filed on January 21, 2022 with the US Customs Office disclosed that MP purchased from a Shenghe subsidiary 19,614 kg of “bastnasite concentrate hts 253090” shipped from Shanghai China to Long Beach California, USA. MP’s business is to dig up California soil and export bastnasite concentrates to China. MP does not disclose anywhere in its SEC filings about processing third party bastnasite concentrate samples from third party mines in Mountain Pass California. So why did MP import bastnasite concentrates from China to California? We can only speculate: potential returned product or potential round-tripped inventory?

MP resold Molycorp’s failed “mine to magnets” downstream investment strategy to raise capital during a time of heightened EV adoption interest which resulted in unrealistic future profitability estimates from Wall Street analysts.

We are short MP and think that its stock is going lower.

Table of Contents:
1. CHINESE CUSTOMS RECORDS SHOW OVERPAYMENT FROM SHENGHE TO MP
2. MP ARTIFICIALLY INFLATED 2021 PROFITS FROM RELATED PARTY DEALINGS
3. INDEPENDENT STUDY FOUND MP OXIDE ECONOMICALLY UNVIABLE
4. US CUSTOMS RECORDS SHOW SHIPMENTS FROM: CHINA TO LONG BEACH?!?
5. US$ 400+ MILLION MP INSIDER SALES IN 2021
6. SHENGHE BENEFITS
7. FINAL THOUGHTS

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December 16, 2021 - Click here for full report - SHORT AGRIFY ($AGFY)

Agrify Corp. (“Agrify” or the “Company”) sells a modular indoor vertical farming unit (“VFU”) that advertise a cost-effective and low risk way for plant growers, mainly cannabis farmers, to increase yields and profits via environment controls and automation.

We believe that Agrify created artificial demand for its product by financing undisclosed Company insiders to act as independent customers.

After its January 2021 IPO, Agrify’s shares soared amongst a wave of sales announcements to alleged independent third party licensed commercial growers via new total turnkey partnerships (“TTK Partnerships”).

We found two major issues with Agrify’s TTK Partnerships.

First, we found the majority of Agrify’s TTK Partnerships are either with undisclosed Company insiders or with unlicensed unproven operators.

Second, the TTK Partnerships use Agrify’s balance sheet to finance the construction of the customer’s facility, equipment sales and installations, which suggests to us that Agrify’s recorded revenues are artificially inflated by loan balances from Agrify to TTK Partnership customers.

Agrify accounted for its TTK Partnerships differently than previously disclosed accounting policies.

TTK Partnerships were never mentioned in the Company’s S-1 or its 2020 10-K, which means Agrify’s new 2021 accounting policies have yet to be the subject of an audit.

Given evidence of limited interest from independent customers and significant cash dealings with undisclosed Company insiders, we think that Agrify’s auditor Marcum, LLP (“Marcum”) cannot in good faith accept Agrify’s 3Q’21 financial statements as-is without inviting increased scrutiny on itself for violating negligence rules of its PCAOB membership.

We suspect Agrify’s actual revenues are significantly less than what is reported to investors which is why we are short Agrify and think that its stock is going lower.

Table of Contents:
1. FAKE DEMAND PROMOTION
2. HANNAH UNDISCLOSED RELATED PARTY CUSTOMER
3. OLIVE EL MIRAGE NEWLY ESTABLISHED WITHOUT OPERATING LICENSE
4. KEIF USA NEWLY ESTABLISHED WITHOUT OPERATING LICENSE
5. TRUE HOUSE CANNABIS CUSTOMER FINANCED BY AGRIFY INSIDERS
6. GREENSTONE CUSTOMER OWNED BY AGRIFY INSIDERS

Click Link Below for Full Report
October 22, 2021 - CLICK HERE FOR FULL REPORT - SHORT ESS Tech Inc ($GWH)

Ess Tech, Inc. (“ESS”) (NYSE: GWH) was recently acquired by the SPAC ACON S2 Acquisition Corp. (“STWO”) to commercialize ESS’ low-carbon emission long-duration iron redox flow battery.

ESS’ May 2021 PPT Investor Presentation (“May’21 PPT”) disclosed that its iron flow batteries were “validated by a blue-chip customer base… field proven and shipping now.”

ESS highlighted six (6) different ESS battery installations deployed from 2015 to 2020 to customers such as the US government, a private commercial winery, and a university in San Diego.

We found five (5) ESS’ projects abandoned and its purported CY’20 project generated zero revenues.

To us, the evidence revealed that ESS lied to investors about its historical customer base and project deployments.

Competition in the battery sector is fierce, especially when your primary product inputs are iron, salt and water. In 2012 and 2015, ESS was awarded two separate grants for a total of ~US$ 3 million from the US Department of Energy (“DOE”). On September 23, 2021, the DOE announced US$18 million in grants awarded to four ESS flow battery competitors and did not include ESS.

ESS’ did not generated any revenues from January 2019 through June 2021 despite its purported “blue-chip customer base.”

With increased expenses and a depleting cash balance between US$ 256 million to 399 million (between ~US$ 1.89 to 2.70 cash/share dependent on warrant exercise amount), we are short GWH and believe that its stock is going significantly lower (~85%).

Table of Contents
1. FAILED PRODUCT INSTALLATIONS – DISSATISFIED CUSTOMERS
a. Stone Edge Farm Estate Vineyards & Winery
b. University of California, San Diego
c. US Army Corps of Engineers
d. Camp Pendleton – Cleanspark
e. San Diego Gas & Electric
f. BASF & Pacto Energia S.A
g. InoBat & Naturgy
2. TEETERING ON BANKRUPTCY IN CY’20 – SAVED BY A SPAC IN ‘21

October 6, 2021 - CLICK HERE FOR FULL REPORT - Short TMC the metals co (TMC)

DeepGreen Metals Inc.(“DeepGreen”) was recently acquired by the SPAC Sustainable Opportunities Acquisition Corp. (“SOAC”) and rebranded as TMC the metal company Inc. (Nasdaq: TMC) (“TMC”) to mine the Clarion Clipperton Zone (“CCZ”) on the floor of the Pacific Ocean for “EV Batteries in a Rock.”

TMC is pre-revenue. TMC’s primary assets are three (3) exploration licenses issued by the International Seabed Authority (“ISA”) each with designated floor area of ~75,000 sq.km in the CCZ.

We believe TMC siphoned US$ 43 million in cash and stock to undisclosed insiders by overpaying for Tonga Offshore Mineral License (“TOML”).

TOML’s previous owner, Nautilus Minerals Inc. (formerly TSX: NMI) (“NMI”) valued the TOML exploration license in its historical annual reports at zero.

In 2019 PriceWaterhouseCoopers (“PwC”) was designated as the Monitor for NMI’s restructuring process and tried to find a buyer for NMI’s assets through a court-approved sale and investment solicitation plan (“SISP”).

PwC’s Monitor reports submitted to the Canadian Courts, available online via PwC, revealed that the TOML license was shopped around to ~300 prospective investors as part of NMI’s SISP and that no interest was found for the TOML license from independent parties.

The only interested party was NMI’s Senior Secured Creditor Deep Sea Mining Finance Limited (“DSMF”), the undisclosed related party beneficiary of TMC’s overpayment for TOML.

Affected NMI creditors received 10 cents on the dollar and NMI common shareholders received nil.

Lockheed Martin (NYSE: LMT) has two exploration licenses and holds them at zero at its UK subsidiary, UK Seabed Resources Limited.

We believe that the TOML exploration license should be valued similarly to the licenses of Nauru Ocean Resources Inc. (“NORI”) and Marawa Research and Exploration Limited (“Marawa”) at US$250,000 each.

In addition, we believe that TMC artificially inflated its 2019 reported NORI exploration expenditures by 124% giving investors a false scale of its operations.

ISA public records disclosed actual NORI exploration expenditures in 2019 were only US$ 15 million, significantly lower than the US$ 34 million disclosed to investors in TMC’s SEC filings.

Additional findings revealed that TMC insiders are connected with Panama Paper and ICIJ-flagged known money laundering conspirators and an ASIC-convicted insider trading felon.

Unfortunately to us it appears as though gatekeepers failed to protect United States investors with appropriate disclosure requirements and due diligence on the background of TMC’s assets.

With no revenues and a daily depleting cash balance of US$ 113 million (~$0.50 cash/share as of 9/30/2021), we are short TMC and believe that its stock is going significantly lower.

Table of Contents
1. OVERPAYMENT TO UNDISCLOSED INSIDERS FOR TOML LICENSE
2. ARTIFICIALLY INFLATED NORI EXPLORATION EXPENSES BY 124%
3. QUESTIONABLE LEGAL STATUS OF TOML LICENSE
4. HISTORY OF BAD ACTORS – RINSE & REPEAT