Vic Neufeld, CEO of Aphria, one of Canada's largest marijuana producers, says the company will address line-by-line claims made in a short-selling report.
The executive director of Leamington's cannabis producer Aphria – surrounded by short sellers who claim backstage business has enriched people inside – said the company will release a report next week responding to all allegations.
Vic Neufeld said that Aphria's response will refute the barrage of accusations made on Monday that focused mainly on recent acquisitions of the company in Latin America.
"You'll find all 20 claims, line by line, point by point, with photos – real photos, real images – about what we call LATAM asset acquisition," Neufeld told Star on Friday. "Each point will be very informative and will shed the true light on history."
He said the rebuttal would likely be released on Wednesday. Aphria announced on Thursday that it had appointed an independent committee to review the recent acquisition of its holdings in Latin America and confirm that it was level.
Neufeld said that Liberty Health Sciences, a company backed by Aphria which has been the subject of a second round of claims, will likely disclose its own answer on Monday.
He said the possibility of litigation prevented him from addressing specific details of the allegations until the official response next week.
"I'm not hiding," he said. "We are just very focused on getting it right in terms of all the facts – those that have been released and those that we will have to disclose – to ensure that we are not giving selective disclosure in a preventative manner. .
But he said it will be "proven by more legal forensics" that no insider has been enriched to the detriment of unconscious shareholders.
That was one of many allegations of Quintessential Capital Management and forensic analysis firm Hindenburg Research, which looked at Aphria on Monday as "shell game" and "black hole."
Both Quintessential and Hindenburg were purportedly short-selling shares of Aphria. A short seller may profit if the price of a collateral falls.
They claim that Aphria diverted funds for inflated investments held by people inside and that their recent deals in Latin America are worthless. Hindenburg stated that the official seat of Aphria's $ 145 million Jamaican acquisition "is an abandoned building that was sold by the bank earlier this year."
The company also claims that Argentina's $ 50 million acquisition of Aphria, which secured sales of $ 11 million in 2017, actually only earned $ 430,000.
Hindenburg launched a second round of attacks on Thursday focusing on a Florida property acquired by Liberty Health Sciences. The forensic analysis company claims that instead of just buying the assets, buyers acquired it through a newly formed entity, paying the holders $ 5 million in six days. Hindenburg claims that this transaction took place under the supervision of Neufeld.
Hindenburg also states that "unidentified individuals purchased 242 million shares of Liberty in a highly dilutive private placement of $ 0.001," just days after Aphria announced a plan to buy its shares at 208 times the price.
The Hindenburg report also states that Neufeld paid 280,450 shares, but actually took control of more than 2.4 million. Neufeld said on Friday that a report said that, but it was an administrative mistake that was corrected on Thursday.
"The shares I bought, 280,450 shares, for some reason, were extrapolated to more than 2.4 million, which gave the Hindenburg guys the suspicion that somewhere I bought for free 2.1 million shares," he said. "This is a mistake made by Liberty Health Sciences and our law firm. They have now corrected and declared the correction. "
Neufeld said that Aphria is still "going through the pros and cons" of prosecuting those responsible for the reports.
"We have to find out, at the end of any litigation, that we will succeed at something? What I do not want to do is waste the shareholders' money and the time of executive management on something that can end up achieving zero. we did not say no, but we did not say "yes" either.