an investor is suing publicly Tilray Brands Inc. TLRECanadian pharmaceutical and cannabis company and one of the most popular cannabis shares out there.
Michael Hudsonwho filed trial In the Southern District of New York on March 1, blame tilray “Breach of fiduciary duties, unjust enrichment, and waste of corporate assets, and violations of the Securities Exchange Act of 1934,” according to the suit, which states the first category of false statements related to the value of Tilray’s inventory and its gross margin. , and the second category of false statements relates to the admission and value of the company’s agreement with Authentic Brands Group (ABG).
The plaintiffs claimed that the Authentic Brands deal was done to prop up the stock price and was not really as good as Brendan Kennedy (the founder of Privateer, the parent of Tilray, a privately owned Canadian-based business). Hudson said that in the two quarters following its IPO nasdaq“Tilray’s gross margin had dropped from 55% to 31%.”
However, “to address shareholders’ concerns, there is evidence that, under the direction of defendant Kennedy, Tilray recognized more than $40 million of non-salable marijuana plant waste as a valuable commodity and Tilray subtracted $40 million from the cost of sales of . This had an effect. Tilray’s Margins and to make it appear more profitable and promising than it actually was,” reads the legal document.
In addition, Tilray inflated the value of its inventory by $68 million, according to the lawsuit. The company’s reported inventory “increased from $16.2 million at the end of 2018, to $48.7 million after the first quarter of 2019, to $75.3 million in mid-2019, and finally to $111.5 million at the end of the third quarter of 2019”. According to Green Market Report.
Tilray Spokesperson Said The Law360 Complaint is similar to other Derivative Complaints filed in ” [Southern District of New York] and in the District of Delaware, which are pending the outcome of the securities class action motion to dismiss.” In addition, the Company believes the underlying claims of these actions are without merit and plans to defend them. .
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