Triangle 9

Under the Shareholders Agreement, Triangle 9, Inc. (parent) has a call option to purchase securities held by investors at then-fair market value, creating a potential conflict where the sponsor could force out public investors at its discretion.

“Triangle 9, Inc. also has a call option to purchase securities held by our investors at the then-fair market value.”

The company has a Management Agreement with its sole pre-offering shareholder, Triangle 9, Inc. (owned by former officers/directors Jordan Lams and Tarek Tabsh), providing the parent 2% of all capital raised, 1% of all assets acquired, and 20% of net gains on asset sales. This creates a conflict where the parent earns fees from both capital deployment and profits.

“On July 31, 2021, we entered into a Management Agreement with our sole shareholder, Triangle 9, Inc. Pursuant to the agreement, we agreed to pay to Triangle 9 (a) two percent (2%) of the amount of any funds raised by us from investors upon the sale of any of our securities, including instruments that are convertible into our securities, payable on the closing of any applicable financing; (b) one percent (1%) of the amount of any funds deployed by us for the purchase of any assets held for investment by us, payable on the closing of any asset purchase; and (c) twenty percent (20%) of the net gain (realized value above investment basis, not taking into account depreciation) from the sale of any assets held for investment by us, payable on the closing of any applicable asset sale.”

Triangle 9, Inc. (the parent/sponsor) holds 100,000 shares of Series A Convertible Preferred Stock, each carrying 25 votes versus 1 vote for common shares. This effectively gives the parent/sponsor overwhelming voting control over all company matters, giving public common shareholders virtually no governance power.

“Each share of Series A Convertible Preferred Stock is convertible into one share of common stock and is entitled to twenty-five (25) votes on all matters that come before the common shareholders or shareholders generally.”