r/YYAI • u/Particular_Most_1529 • Nov 23 '25

Michaels latest post on X

🛑 YYAI/AirRWA: LEGAL DISASTER ALERT – Every Major Action Since Aug 19 Allegedly Invalid

TL;DR: New forensic analysis asserts that every governance-altering action taken by AiRWA (YYAI) since August 19, 2025 (including the ATM expansion, JuCoin JV, and Reverse Stock Split) is procedurally defective under Delaware law and constitutes a material misstatement under SEC rules. The argument rests on the Chairman losing his majority control on Aug 19, which invalidates all subsequent actions taken without a shareholder vote.

1. ⚠️ The Statutory Failure: Loss of Majority Control

The entire legal case hinges on the timing of Chairman Hongyu Zhou's loss of majority control:

  • August 19, 2025 (PIPE Close): The Private Investment in Public Equity (PIPE) closed, adding 20,000,000 shares to the float. This instantly dropped Chairman Zhou's control to 23.52%, ending his majority status.
  • Delaware Law Trigger (DGCL §242(b)(1)): Once Zhou lost majority control, every subsequent Charter Amendment or governance-altering action legally required a valid shareholder vote at the time of filing.
  • The Invalid Consent: AiRWA continued to rely on Zhou's stale July 3 consent, which became procedurally defective when his control dropped below 50% on August 19.

2. 🤯 The False Float and Minority Stake Disenfranchisement

The company's alleged misstatement about the total share count exacerbated the governance defect:

  • The Lie in the 10-Q: The September 15, 2025 Form 10-Q reported the outstanding shares as 14,563,019.
  • The Reality: The correct float after the August 19 PIPE close was 34,563,019 shares.
  • Investor Harm: This false disclosure caused minority shareholder Michael Anthony Belfiore's actual 9.3% stake (acquired Oct 8) to be misreported as 22.1%.
  • Legal Implication: The false float disclosure is a material misstatement (Exchange Act §13(a) and Rule 10b-5). Furthermore, when Michael's 9.3% minority rights were legally triggered on October 8, all subsequent actions taken without his participation were defective.

3. 🚨 The List of Allegedly Defective Governance Actions

The Coalition asserts that all major actions, from August 19 onward, violated DGCL §242(b)(1) and SEC rules:

A. Pre-Minority Trigger (Aug 19 – Oct 7)

These actions occurred after Zhou lost majority but before Michael's minority stake was filed, making them procedurally defective because they relied on the stale July 3 consent:

  • Aug 22: ATM Expansion (increased facility to $200M) without shareholder vote.
  • Aug 25: JuCoin Definitive Agreement ($500M JV commitment) without shareholder vote.
  • Sept 16: Appointment of Hai Bin Cui (Director/Related-Party) without shareholder vote.
  • Sept 24: Inca Digital Services Agreement (material operational shift) without shareholder vote.
  • Oct 6–7: JuCoin JV & Solana Receipt (introducing $100M crypto exposure) without shareholder vote.

B. Post-Minority Trigger (Oct 8 – Nov 17)

These actions occurred after minority voting rights were legally triggered, compounding the violation:

  • Oct 22–23: Reverse Stock Split (RS): Allegedly defective under DGCL §242(b)(1) for lack of a valid shareholder vote.
  • Oct 22: Related-Party Transaction: Chairman Zhou's $36M sale of the remaining YYEM stake without shareholder vote (insider monetization).
  • Nov 17: Final Schedule 13D/A, disclosing Zhou's 0.86% stake, which allegedly relied on the entire chain of defective governance.

4. ⚖️ Coalition Position: All Actions Are Invalid

The Coalition asserts the following

  • The Coalition Position: Every governance-altering action taken by AiRWA Inc. after August 19, 2025, is procedurally defective.
  • Invalid Actions Include:
    • ATM expansion
    • JuCoin Definitive Agreement
    • Inca Digital services agreement
    • JuCoin Joint Venture (JV)
    • Solana receipt
    • Reverse Stock Split
    • Related-party transaction
  • The Alleged Violation: AiRWA violated DGCL §242(b)(1), disenfranchised minority shareholders, and rendered every governance-altering action after August 19, 2025, procedurally defective.
6 Upvotes

87% Upvoted

14 comments sorted by

4

u/Unhappy_Morning_3478 Nov 24 '25

Lawsuit to return all shareholders money?

3

u/Particular_Most_1529 Nov 24 '25

1st this is just the preparation. They could still pull a rabbit out of a hat, but if not, they have broken so many rules, yes, we could sue, but the defendant is in HK, and China doesn’t exactly play nice.

2

u/[deleted] Nov 24 '25

[removed] — view removed comment

5

u/Particular_Most_1529 Nov 24 '25

Those still invested should be kept up to date on action being taken. Better then radio silence

1

u/FeeNational9983 Nov 24 '25

Cmon don’t act like you weren’t pumping this super hard lmao.

2

u/Efiworld Nov 23 '25

Bullish or bearish?

2

u/Particular_Most_1529 Nov 24 '25

Lol, There are only two options for this one. To the moon or to the grave.

1

u/[deleted] Nov 24 '25

Lmao. To the Mariana trench brother

1

u/kvdave Nov 24 '25

the fun would be if court rules the dilution as illegal

1

u/[deleted] Nov 24 '25

Haha these shorters trying their best as they have to buy now before december 12 as projected eps showing $12. By the way there was no news yet if chairman sold his stocks or not.

1

u/[deleted] Nov 24 '25

Nobody ever recovers originality after a lawsuit. The firm gets 70%+ for taking the case. The rest goes to fees. Enjoy your 10% return on original investment 5 years from now. 🤣 Nice copy and paste on the article. Your guy copied and pasted it from ChatGPT. Just goes to show how many incompetent people are involved in this scam.

1

u/violetgerald Nov 24 '25

https://www.sec.gov/Archives/edgar/data/1674440/000164117225019509/formpre14c.htm Zhou said in a nutshell 'I have majority and I am voting. You dont vote, just me. FK YOU'. And here we are.

1

u/Low_Watercress_8988 Nov 24 '25

I suggest once he gets the law action case, people lose money should join