Wednesday, August 16, 2017

The MAD-RSF Investment Partnership Has a Long History of Using Fronts to Obscure Their Investment Activities

When reviewing earlier private land transactions related to Filigreen Farm,  it seems obvious that using other people or entities as fronts to intentionally obscure transactions, and beneficial control, has been a tactic employed by Davis and his RSF partners for many years"

Click on the image below of Michael Arlen Davis and his partners, former RSF chairman Siegfried Finser,  and current RSF chairman Mark Finser, to read more:


http://davisrsfgroup.davisrsfgroup.info/p/exposing-likely-self-dealing.html

Monday, August 7, 2017

Who is Cyanotech's entrenched "Chairman for Life" Michael Arlen Davis?

Click on the image below to read more about Cyanotech's entrenched "Chairman for Life" Michael Arlen Davis:

http://davisrsfgroup.davisrsfgroup.info/p/blog-page_75.html
One for you, one for me, one for you, two for me...

Saturday, August 5, 2017

Follow the Michael Arlen Davis Charitable Grant Money...

"Shady is as shady does..."
IRS form 990 filings indicate the Davis-RSF investment "group" began surreptitiously acquiring commercial grade organic farming assets during the early 2000s, employing their purpose-built web of related nonprofit foundations to obscure beneficial ownership, and reduce cost at taxpayer expense
 

RSF (through their Yggdrasil Land Foundation) acquired the first portion of Filigreen Farm in 2001. Davis acquired his initial equity shares in Cyanotech in 2002.  Davis became a board member of Cyanotech the next year (2003), created Ginungagap and began financing in earnest the development of Filigreen Farm into the -"jaw dropping"- wine vineyard we see today.

In 2010/2011, when the prospects of Cyanotech improved due to to the launch and success of a new product offering, the MAD/Davis partnership’s interest shifted to Cyanotech. 


Analysis of historic MAD and RSF IRS 990 filings confirms that chairman Davis granted number two shareholder RSF a stunning $5.2 Million worth of charitable cash and stock during 2010-2011. This tax-advantaged liquidity was used to fund Davis' rapid and non-disclosed (to the SEC or other shareholders) accumulation of publicly traded Cyanotech voting stock, resulting in Davis' controlling the 33% control block that has entrenched him as Cyanotech’s chairman since 2011, with RSF playing/acting the role of  an "independant" second largest shareholder.
 

Chairman Davis' secret control scheme seems to have intentionally, and almost casually, violated basic securities law put into place to enforce fairness and integrity in our publicly traded stock markets, regardless of company's size.

As though entitled by Zeus and Aphrodite themselves to make up the rules,  no section 13D disclosure was filed WITH the SEC at that time by Davis, RSF, or Cyanotech's board,  of Davis' now exposed control agenda, and the closely intertwined investment "group" relationship that has existed between Davis and his RSF accomplices since no later than 2001, and most likely earlier.


It is right for Cyanotech investors, employees, and the public at large to ask -- where is there evidence of a credible public benefit being met by Davis that warrants the special tax exemptions for his related nonprofit shell entities? Are Davis and RSF cheating US taxpayers by using tax exempt monies/resources to accumulate investment grade for-profit commercial farming assets (e.g. at tax payer expense) for what appears to be largely for personal benefit.

The summary data in the table below exposes the unusual size and nature of the Davis.RSF partners' sharp increase in coordinated trading activity in publicly traded Cyanotech shares during the 2010-2011 period.

Click on the following link, or the table below --- to read more about how entrenched "chairman for life" Michael Arlen Davis has used his “charitable grant making” activities to pursue his seemingly obvious personal control agenda. 


http://davisrsfgroup.davisrsfgroup.info/p/blog-page_16.html
http://davisrsfgroup.davisrsfgroup.info/p/blog-page_16.html

Cheers,
Dayisun Tngri

Friday, August 4, 2017

The Overlapping Boards of the Michael Arlen Davis Nonprofit Network

Michael Arlen Davis appears to be a - "Disqualified Person" - with respect to transactions with RSF, by statutory definition.

It is right to ask whether or not transactions between related MAD and RSF 501(C)(3) private nonprofit foundations are - "Self Dealing" - in nature, and therefore in violation of IRS rules.

Click on the image below to read about the overlapping and potentially conflicted boards of directors in Michael Arlen Davis' web of private nonprofit foundations.  (Regarding the image below, if someone can identify a public benefit, please share in the comments section.)

http://davisrsfgroup.davisrsfgroup.info/p/the.html
Could a shiny new MAD/RSF "Fraternity House" be in the works for Filigreen Farm?

Thursday, August 3, 2017

Chairman Michael Arlen Davis' Concealed Takeover of Cyanotech during 2010-2011


Review of the historical record makes it seem clear, at least to a reasonable and non-conflicted person, that during 2010-2011 Cyanotech's chairman Michael Arlen Davis:
  • Forced out the company's prior chairman
  • Rapidly accumulated Cyanotech publicly traded shares without filing legally mandated SEC disclosure.
  • Set up and funded Rudolf Steiner Foundation to play the role of Cyanotech's "arms length" second largest shareholder of record.
  • Began "Parking" a strategic block of public Cyan voting stock at Rudolf Steiner Foundation.
  • Entrenched himself as "Chairman for Life" with more/less a 33% voting control stake in public Cyan stock.
  • Paid for, or donated, every single share of Cyanotech common stock held by RSF for Davis' benefit.
Additionally, the historical record amplifies claims presented in Meridian's many SEC 13D and Nevada Federal Court filings that Cyanotech's chairman Davis has been closely assisted in an apparent stock "Parking" scheme by his longtime investment group and "spiritual" partners Rudolf Steiner Foundation.

To be clear, the earnings release was terrific. It reinforces our excitement about Cyanotech's future potential. However, this reasonable person shareholder's enthusiasm is tempered because Cyanotech's bright potential cannot be realized until Davis is gone from the board, and his keys are taken away, which is what should happen given chairman Davis' recently exposed investment activities around Cyanotech,  most notably during 2010-2011.

Read More: The MAD/RSF Partnership and their Concealed Takeover of Cyanotech during 2010-2011

Read More: Filigreen Farm--Exposing the Secret Partnership


Dayisun Tngri

Wednesday, August 2, 2017

The Davis-RSF Investment "Group" Operating Model

It seems obvious to a reasonable and non-conflicted person that Michael Arlen Davis created an investment  “group” with RSF related to publicly traded Cyanotech stock in 2010, when Davis began “parking” Cyan stock with RSF, as necessary, in an apparent scheme to maintain chairman Davis’ direct holdings below the 20% ownership limitation created by Internal Revenue Code Section 4943.  

Click on the image below to read more about the operating model employed by the Davis/RSF investment "group" partners:

Tuesday, August 1, 2017

Rudolf Steiner Foundation’s Behavior appears to Communicate “Accomplice” more than “Victim”

Below is a copy and paste of a recent post on the - Cyan Yahoo Message Board - by poster "Oldwise" discussing Rudolf Steiner Foundation (RSF).  I have been planning to blog more about RSF’s role in the Michael Arlen Davis saga at Cyanotech and feel Oldwise's words provide the right place to start.

Oldwise  Post

The quotes below are from the Rudolf Steiner Foundation website - presenting RSF's investment philosophy. RSF has admitted to being a group member with Chairman of the Board, Michael Davis, and together Davis and RSF own a control block of shares. Davis is a huge donor to RSF and obviously recruited RSF to be his partner at Cyanotech. Thus, the words below are most likely the guiding principles for the company - anticipating inevitable ecological and deemphasizing growth. Explains a lot of what we've seen from the company over the years. Apparently, Davis, RSF and the rest of the board thought it was a good idea to keep us shareholders in the dark concerning their plans for the company.

---------------------------------

"If you’ve invested in publicly traded, multinational corporations, acknowledge it and the associated risks and problems. Don’t try to make the case for the sustainability of a fundamentally flawed system."

"In the face of ecological limits and the potentially wrenching social changes that may ensue, the riskiest investments will be those that depend on the existing economic order to continue."

"GDP growth is not an inherent “God-given” right, nor is it inevitable...In the face of ecological limits, we must question whether we can reasonably expect our global economy to continue to grow as it has in the past. Unless we very rapidly figure out how to grow without using and emitting more “stuff,” we need to consider the possibility of an extended period of material economic contraction. To be blunt, this means no growth."

"We risk not being taken seriously by real investors...At this early stage in the rewriting of investment theory to address the reality of ecological limits, we must be bold and courageous."

"This new framework flies in the face of conventional theory and investment strategies. And, no matter how logical the argument or reasonable the concepts, these ideas will be dismissed by many investment professionals, including members of foundation investment committees, consultants to pensions and wealthy families, brokers, Wall Street investment bankers, and advisors to Congress and the White House."

Link: http://rsfsocialfinance.org/2010/08/23/leslie-christian-5/


Cheers,
Dayisun Tngri

Read More:  RSF’s likely violation of Section 4943 of Internal Revenue Code

Read More:  Rudolf Steiner Foundation

Read More:  The Davis/RSF Investment "Group" Operating Model

Sunday, July 30, 2017

Could Founder Gerald Cysewski be a Victim of "Stockholm Syndrome"?

Stockholm Syndrome:  Feelings of trust or affection felt in certain cases of kidnapping or hostage-taking by a victim towards a captor.

Click on image below to read more about Cyanotech Founder and Interim CEO Gerald Cysewski:

http://davisrsfgroup.davisrsfgroup.info/p/blog-page_60.html
Click on image above

Saturday, July 29, 2017

Korn Ferry's David L. Vied Appears to have a Glaring Conflict of Interest on Cyanotech's Board

Click on image below to read more about Director David L. Vied:


http://davisrsfgroup.davisrsfgroup.info/p/blog-page_67.html
Korn Ferry Executive David L. Vied

Thursday, July 27, 2017

Today's Steinercism: Cyanotech is a Captive Pawn in Davis' Spiritual Journey

The excerpts below from  Joe Eskenazi's "Voodoo on the Vine" explain that biodynamic agriculture is "steeped in the occult and bad science" and forms a quasi-religion for believers pursuing their own "spiritual evolution."  

"I do not discuss these things, even with my wife. It sounds kooky," says Luc Ertoran of the SOMA wine bar Terroir, a strong advocate of Biodynamic fare who firmly believes the taste of a wine is affected by the zodiac sign of the day it is uncorked. Adds the Wine Club's Daniels, "I try not to get into too much of the voodoo. It scares the customers away"...

Luke and Sue sit beneath a tree, scooping up handfuls of ripe manure and packing it tightly into cows' horns. Nearby sit four "sausages" of chamomile wrapped in cow intestines. Both will be buried around the fall equinox and unearthed on the spring equinox after having amassed "etheric and astral forces" – for which the horn serves as an amplifier...

Whether you think this is nonsensical depends entirely upon what you make of the foundations of Biodynamic agriculture. The system was essentially delivered whole in 1924, like Athena out of the head of Zeus, out of the head of Rudolf Steiner – a self-professed clairvoyant and occult philosopher from Austria who conceived of Biodynamics during his telepathic visits to the realm of spirits he claimed existed "behind" our material world...

By the late 1860s, Rudolf Steiner had seen his first ghost. Many years later, he revealed that as a kindergarten-aged boy, a female specter appeared to him in the waiting room of a railway station. He claimed one of his father's female relatives had killed herself on that very same day. From this moment on, Steiner believed he was able to communicate with the spiritual realm, where "not only external trees or external mountains speak to the human soul but also the Beings that live behind them." Later in life, he would, not surprisingly, urge his followers to read to the dead.

Before succumbing to cancer in 1925 at age 64, Steiner became an internationally known occult figure, wrote books at a Louis L'Amour clip, and delivered an astonishing 6,000 lectures in the last two decades of his life alone. His followers state that 20, 30, or even 50 years are not enough to really understand the man's work. Perhaps — but if you are disinclined to believe in karmic reincarnation, telekinesis, and rewritings of the origin of humanity and the New Testament, all described in painstaking detail thanks to Steiner's supposed clairvoyant ability to literally see the past, significantly less time is required...

Late in Steiner's life, a group of his followers asked him to address their concerns about industrialized agriculture. His 1924 series of eight lectures formed the basis of Biodynamics. The audience was already intimately familiar with Steiner's "spiritual science" worldview — they accepted his notion that he had communicated with the "elemental beings": "Gnomes," who live beneath the ground and push plants upward; shapeless "Undines," who foster budding; "Sylphs," who wither mature plants; and fire spirits, "Salamanders," who imbue seeds with the heat they need to germinate. Within these lectures, Steiner prescribed the nine biodynamic preparations. He also imparted advice such as how to rid a field of mice: A farmer should catch a young mouse, skin it, burn it, and spread the ashes about the field when "Venus is in the sign of the Scorpion." The "ashing" of insects, however, must be undertaken when "the Sun is in the sign of the Bull." This, he told the crowd, was how they used to do it back on Atlantis.

While today's Biodynamic advocates claim they produce vegetables, fruit, and meat that are more nutritious than those of conventional or organic farmers, reading Steiner's lectures strongly indicates that he was concerned not with vitamins and minerals but with food rich in "cosmic forces" and "life energy." Consuming such foods would foster man's "spiritual evolution," a progression toward recovering the clairvoyant abilities and perception of spirit realms enjoyed by our forefathers on the Lost Continent and before."

Friday, July 14, 2017

Today's Steinercism: Survey of Anthroposophy Beliefs and History

Peter Staudenmaier, Anthroposophy and Ecofascism

Rudolf Steiner
In light of this broad public exposure, it is perhaps surprising that the ideological underpinnings of anthroposophy are not better known. Anthroposophists themselves, however, view their highly esoteric doctrine as an "occult science" suitable only for a spiritually enlightened elite. The very name "anthroposophy" suggests to many outsiders a humanist orientation...Its rejection of reason in favor of mystical experience, its subordination of human action to supernatural forces, and its thoroughly hierarchical model of spiritual development all mark anthroposophy as inimical to humanist values...

The centerpiece of anthroposophical belief is spiritual advancement through karma and reincarnation, supplemented by the access to esoteric knowledge available to a privileged few. The spiritual dimension, in fact, suffuses every aspect of life. For anthroposophists every illness, physical or mental, is karmically determined and plays a role in the soul's development. Natural processes, historical events, and technological mechanisms are all explained through the action of spirits. Students in Waldorf schools are taught, for example, that good spirits live inside of candles and demons live inside of fluorescent light bulbs--an instance of the anti-technological bias that runs throughout anthroposophical thought...

Anthroposophists maintain that Steiner's familiarity with the "astral plane," with the workings of various "archangels," with daily life on the lost continent of Atlantis (all central tenets of anthroposophic belief) came from his special powers of clairvoyance. Steiner claimed to have access to the "Akasha Chronicle," a supernatural scripture containing knowledge of higher realms of existence as well as of the distant past and future. Steiner "interpreted" much of this chronicle and shared it with his followers. He insisted that such "occult experience," as he called it, could never be judged or verified by reason, logic, or scientific inquiry. Modern anthroposophy is thus founded on blind faith in Steiner's convictions. Those convictions deserve closer examination...


The curriculum at Waldorf schools is structured around the stages of spiritual maturation posited by anthroposophy: from one to seven years a child develops her or his physical body, from seven to fourteen years the ethereal body, and from fourteen to twenty-one the astral body. These stages are supposed to be marked by physical changes; thus kindergartners at Waldorf schools can't enter first grade until they've lost all their baby teeth...

Next to Waldorf schools, the most widespread and apparently progressive version of applied anthroposophy is biodynamic agriculture. In Germany and North America, at least, biodynamics is an established part of the alternative agriculture scene. Many small growers use biodynamic methods on their farms or gardens; there are biodynamic vineyards and the Demeter line of biodynamic food products, as well as a profusion of pamphlets, periodicals and conferences on the theory and practice of biodynamic farming.

Although not a farmer himself, Steiner introduced the fundamental outlines of biodynamics near the end of his life and produced a substantial body of literature on the topic, which anthroposophists and biodynamic growers follow more or less faithfully. Biodynamics in practice often converges with the broader principles of organic farming. Its focus on maintaining soil fertility rather than on crop yield, its rejection of artificial chemical fertilizers and pesticides, and its view of the whole farm or plot as an ecosystem all mark the biodynamic approach as an eminently sensible and ecologically sound method of cultivation. But there is more to the story than that.

Biodynamic farming is based on Steiner's revelation of invisible cosmic forces and their effects on soil and flora. Anthroposophy teaches that the earth is an organism that breathes twice a day, that ethereal beings act upon the land, and that celestial bodies and their movements directly influence the growth of plants. Hence biodynamic farmers time their sowing to coincide with the proper planetary constellations, all a part of what they consider "the spiritual natural processes of the earth." Sometimes this "spiritual" approach takes unusual forms, as in the case of "preparation 500."

To make preparation 500, an integral component of anthroposophist agriculture, biodynamic farmers pack cow manure into a steer's horn and bury it in the ground. After leaving it there for one whole winter, they dig up the horn and mix the manure with water (it must be stirred for a full hour in a specific rhythm) to make a spray which is applied to the topsoil. All of this serves to channel "radiations which tend to etherealize and astralize" and thus "gather up and attract from the surrounding earth all that is ethereal and life-giving."

Thursday, July 13, 2017

Michael Arlen Davis' Altruism appears Mostly to Himself

The "Table of 18 Million Truths:"


Review of IRS Form 990 filings made by Davis/RSF during 2003 - 2014, for their various tax exempt 501(c)(3) non-profit entities, reveals that Michael Arelen Davis made over $18 Million of tax-exempt charitable grants.

During the eleven year period studied, approximately 93% of all charitable grants reported to the IRS by Michael Arlen Davis' Skywords Family Foundation went to entities controlled by and/or related to  1) chairman Michael Arlen Davis, Cyanotech's largest shareholder, and  2) Rudolf Steiner Foundation,  Cyanotech's second largest shareholder of record.

In other words, about 93 cents of every $1.00 charitably granted by Michael Arlen Davis during the 2003 - 2014 period went to entities controlled by, or related to, Michael Arlen Davis and Rudolf  Steiner Foundation

The comments section below this post is available for anyone who cares to explain the public benefit that warrants the special tax treatment for Chairman Davis.

Read More:  Follow the Davis Grant Money...
Read More:  The Davis Web of Non-Profits
Read More:  The Davis/RSF Operating Model

Sunday, July 9, 2017

Today's Steinercism: Biodynamic Farming, Witchcraft or Cult?

Cult of Biodynamics: Future of farming or agrarian organic witchcraft?
Article by Antonio Saltini, Genetic Literacy Project

Steiner's Manure Goat Horns
"Biodynamics is "the organic movement on steroids—a celebration of all things “natural”—whatever that means—and a rejection of many of the most rudimentary forms of modern agriculture...Anthroposophy is at heart an esoteric crypto-religious organization based on a mystical and racist view of humanity and an astrological and clairvoyant view of understanding science.  Anthroposophy embraces the literal existence of gnomes, that the British Isles floats on the sea, homeopathy works, and burning mice ritually will protect your crops from them. And if you follow this philosophy, you will be reincarnated as a Northern European Aryan.

Horns Are Buried Through Winter
To Absorb "Cosmic Power"
For those who work in the agricultural sector – that is, actual farmers and buyers and sellers of imagesagricultural produce – “biodynamics” is infamous for its oddity. It’s adherents, known as adepts, see the arrival of autumn as the time to set about burying within their fields an animal organ stuffed with rotting plants, leaving it there throughout the winter so that it can absorb the beneficial influences bountifully supplied by the stars in the invernal heavens...The recipient used to capture these astral energies varies in accordance with the type of crop one hopes to grow. For example, one might use an ox skull, a stag’s bladder (the more elaborately branched the animal’s antlers, the better) or even a horn...

One should point out that biodynamicists fall into two categories. There are the “practical” adepts – that is, those who are more than happy to bury putrefying animal parts in their fields in order to take advantage of the increasing number of subsidies regional governments make available for “ethical agriculture”. Then there are those who are genuine believers in Rudolf Steiner’s “anthroposophy”, a doctrine that is concerned not simply with producing crops imbued with astral powers but with the modeling of humanity..."

Saturday, July 8, 2017

CYAN is a Captive Subsidiary of the Davis/RSF Nonprofit Partnership

"Emperor for Life" Idi Amin Dada
Is it an accident that Cyanotech badly underperforms as a publicly-traded stock?  Isn't the company doing exactly what "Chairman for Life," Michael Arlen Davis (MAD), wants the company to do - and that is to operate as a captive subsidiary of the nonprofit partnership MAD has created with Rudolf Steiner Foundation (RSF)?

MAD and RSF began working together to acquire their 33% "group" interest in Cyanotech in 2010, but they began working together as partners nearly 10 years earlier with their first project, owning and operating Filigreen Farm.

The purpose of the MAD/RSF partnership is to for each to assist the other in pursuing their shared Steinerite agenda.  Pursuing and promote the ideas of its namesake, Rudolf Steiner is the sole reason RSF exists.   RSF has no interest or reason to pursue profits on its "investment" in Cyanotech - it lives off the donations of its charitable sponsors.  It isn't even possible for RSF to earn a profit, all the shares it holds were paid for by MAD and are subject to written agreements providing that the benefit of the shares it holds revert back to another entity controlled by MAD.

Read More: The Davis web of Non-Profits

RSF's is actually breaking its own rules by working with MAD on Cyanotech.  In 2011, RSF announced publicly that it would no longer hold positions in public company stocks. RSF is breaking this policy in a very big way with Cyanotech.  It is not just a public company, Cyanotech is probably the largest stock position RSF has ever held, it is probably represents the longest period RSF has ever held a stock, and it is the only time RSF has ever held more than 5% of a public company.  With a current 16.2% ownership position, Cyanotech almost certainly stands alone as an extremely unique investment situation for RSF.


So, what is RSF thinking? Most likely that Cyanotech is a wonderful extension of RSF's partnership with MAD at Filigreen Farm. Cyanotech is the second jewel in the partnership's crown - the first a vineyard in the rolling Northern California hills of Mendocino County, the second an algae-grower located on the sunny Kailua Kona coast of the Big Island of Hawaii. What wonderful places these are to promote the Steinerite agenda of biodynamic farming! MAD is a huge donor to RSF and thus, obviously, very supportive of its Steinerite agenda.  This fact is further proven by MAD's--long partnership with RSF to jointly develop and own Filigreen Farm-- as a biodynamic demonstration project.

Now that it has been exposed, the agenda of MAD and RSF at Cyanotech is obvious.  As is the explanation for the extremely poor performance of Cyanotech under MAD's leadership. Cyanotech is not being run as a for-profit public company, it is being run as a captive subsidiary of the nonprofit partnership of MAD and RSF.

It is unbelievable that MAD and RSF thought they could get away with this.  It is not allowed for affiliated nonprofits to own more than 20% of an operating business.  It is not allowed for parties working together as a "group" at a public company to fail to disclose that fact.  It is not allowed for a company to withhold from its shareholders material information such as a Steinerite agenda affecting performance.

Ultimately, what is most amazing about the situation at Cyanotech is the directors that are doing nothing to protect the interests of the company's outside shareholders.  Initially, it could be rationalized that they just didn't know any better - but now one has to ask whether their inaction, their refusal to act as proper fiduciaries, doesn't indicate they are complicit with the MAD/RSF agenda.




Thursday, July 6, 2017

Today’s Steinercism: Cosmic Magic – Cow Horns, Manure and Water Vortexes

  1. Michael Arlen Davis (MAD) and Rudolf Steiner Foundation (RSF) secretly accumulated a combined 33% control stake in Cyanotech so that they would be able to direct the company’s operations.  
  2. MAD and RSF are long-term closely-aligned partners dedicated to the ideas of their hero, Rudolf Steiner, including Steiner's teachings around biodynamic farming.  Before Cyanotech, they joined together as co-owners of Filigreen Farm, a biodynamic vineyard in Mendocino County, California. 
  3. Under Davis’ leadership, Cyanotech has severely underperformed the market. 
  4. So, why is Cyanotech's board of directors so committed to keeping MAD around? What does MAD bring to Cyanotech besides crisis, controversy and poor performance?  Is the answer MAD's expertise in biodynamic farming - do they need someone to collect and stir the manure?

Wednesday, July 5, 2017

Looks Like Davis Knows He is Losing


Review of recent Nevada Court filings on  PacerMonitor reveals that Davis recently fired/replaced his Nevada lawyers.  PacerMonitor offers a valuable service for anyone interested in researching Federal Court cases, including non-lawyers.

The Nevada Court Case filings relating to defendant Michael Arlen Davis should be required reading for anyone interested in a detailed history of his activities around Cyanotech, and exploring what it might be like to do business with its "Dear Leader" Michael Arlen Davis (MAD).

MAD is being sued for failing to make proper disclosures relating to his holdings in Cyanotech, in particular the fact that he has been “Parking Securities" with Rudolf Steiner Foundation (RSF) since 2010.  
 


Can you believe that RSF is the company’s second largest shareholder, with 16.2% of all outstanding shares, and it has never paid a penny for any of those shares?  MAD bought and paid for every single share – yet, until he was sued by the company's third largest shareholder, he never disclosed to anyone that he and RSF were working together.
To date, Davis’ defense in the litigation has been mostly playing word games – he’s been caught dead to rights, but is trying to talk his way out of trouble by claiming it is Meridian that is the bad guy.  How dare they challenge Dear Leader’s absolute control over the company.
 Well, that strategy doesn’t seem to be working, so now Davis has hired someone that could quite possibly be the most expensive litigation attorney in his home turf of San Francisco. Anna Erickson White, of Morrison Foerster, apparently known in the trade as "MoFo", has more than 20 years of experience in securities and other complex, high-stakes civil litigation. In addition to her practice, Ms. White currently serves on the firm’s executive committee and board of directors. She has also twice served as a firmwide managing partner, from 2006 to 2009 and 2012 to 2015.

Monday, July 3, 2017

Great Job Cyanotech Board of Directors

Obvious Hyperbole. They do not actually do this ;-)

As you prepare to meet and renominate yourselves to another year serving as "fiduciaries" to the shareholders of Cyanotech Corporation, please note the chart below presenting a current measure of your market defying performance. It shows the deterioration of Cyanotech's stock price performance and trading liquidity since the surprise April 4, 2016 announcement of former CEO Bailey's resignation.

Lucky for you, "Dear Leader" Michael Arlen Davis (MAD) appreciates the job you are doing – he and his recently exposed,  and long-time investment “group” partners Rudolph Steiner Foundation, are likely to be the only shareholders voting for you.

CYAN Stock Price and Trading Volume is Down Substantially since CEO Bailey Resignation `

Sunday, July 2, 2017

CYAN’s CEOs: No Good Deed Shall Go Unpunished

While working on the post below, I noticed the three spikes up,  and then down,  in Cyanotech's stock chart over the last ten years.  Other than these moments of fleeting hope for shareholders,  Cyanotech's stock has been flat or down.  On observing the upticks, my mind leapt to a theory,  one validated by my collection and review of available data.

As shown in the chart below, two of the three upticks in Cyanotech's stock price preceded the termination of the company's CEO.  Both Andrew Jacobson and Brent Bailey were fired shortly after their efforts had resulted in business success, new opportunities, and increased interest from public market investors in Cyanotech's business and prospects.

Maybe the agenda at Cyanotech does not include growth, profits and public market success?  Maybe CEOs that deliver those things are not wanted at Cyanotech?  Maybe when a CEO at Cyanotech shows too much ability, that CEO gets fired?

Anyway, the folks in charge at Cyanotech appear to have done what they always do – the stock is back to its normal decline and flatline.  Who would be surprised to see Davis buy more shares at these depressed prices – maybe that is what this game is really about?


5/19/2008  -- Andrew Jacobson hired as CEO
 3/1/2010   -- Andrew Jacobson removed as CEO
11/8/2010  -- Brent Bailey hired as CEO
2011-2015 -- Price Surge related to increased demand for Astaxanthin
4/14/2016  -- Brent Bailey removed as CEO

READ MORE:  Davis’ Captive Board 


Funny, Absurd Image, Obvious Hyperbole, Kim is much better looking ;-0

Saturday, July 1, 2017

CYAN Performance Under Michael Arlen Davis


Not so much Hyerbole

 2003 - 2017


Under the leadership of Dear Leader, Michael Arlen Davis (MAD), beginning in March 2003, Cyanotech's stock price has declined 54.5%.  Cyanotech trades on the Nasdaq stock market.  During the same period the Nasdaq has increased 333%.



Friday, June 30, 2017

Cyanotech Potentially Worth $20 per Share


Meridian explained in one of its first Schedule 13D filings why Cyanotech is worth the effort: 

"Astaxanthin is a new supplement category.  It is a natural and highly-effective antioxidant and anti-inflammatory with benefits that Meridian believes will attract consumers from across the retail spectrum, from serious athletes seeking help in recovering from extreme physical exertions to seniors looking for relief from chronic inflammation related to arthritis.  Awareness and demand for astaxanthin exploded in 2012 prompting a world-wide rush of companies seeking to increase supply and win market share.  Cyanotech won the contest for market share – almost certainly due to its good fortune of having recently put in place a management team experienced in retail supplements and new product introductions.  Meridian believes Cyanotech's BioAstin Hawaiian Astaxanthin® brand has the potential to be the category-identifying brand (e.g., like Kleenex® is to facial tissue and Xerox® is to copy machines.

As awareness and demand for astaxanthin grows, Cyanotech'sproducts are well-positioned to retain their current outsized market share allocation.  The Company's strong and friendly relationship with Costco is extremely relevant in this regard.  Costco is a single channel partner through whom Cyanotech can efficiently drive market awareness and brand-identification within a highly-favorable demographic group.  Costco is an enormous distributor of consumer supplements and a very strong and trusted brand in its own right.  For many Costco shoppers, learning that Costco sells something, is reason enough to considering buying that something.

Meridian develops financial models to help it and the companies in which it invests evaluate different strategic options and various performance levels.  Meridian uses these models together with sophisticated tools available to institutional investors to value these various scenarios.  Below are two simple scenarios that Meridian has created and evaluated with these valuation tools.
 

Scenario 1 is a slower growth approach with limited spending on new production and reduced rates of spending on sales and marketing.  This model still shows 10% growth reflecting Meridian's belief that the investment to date will deliver gradually rising levels of astaxanthin production over the next few years.

Scenario 1 has Cyantech adding approximately $10 million in additional sales over the next three years and enjoying higher margins due to improving production techniques.  Running this scenario through a third party valuation application, shows a resulting valuation of approximately $9.93 per share.

Next, Scenario 2 provides for heavier spending on production, sales and marketing, with this greater investment projected to deliver 20% annual growth.  Scenario 2 has Cyantech adding approximately $24 million in additional sales over the next three years and enjoying even higher margins due to economies of scale and increased production efficiencies.  Running this scenario through a third party valuation application, shows a resulting valuation of approximately $22.48 per share."


Thursday, June 29, 2017

So, This is where Michael Arlen Davis Learned His Tricks

Leonard "Notorious BIG Shady" Davis

Michael Arlen Davis may not have earned a Harvard degree, but he appears to have earned a virtual degree from the "Leonard Davis School of Business and Charity."

As detailed in publicly available court documents,  chairman Davis is accused of:
  1. Forming an undisclosed investment group and secretly accumulating Cyan public stock with close long time partners Rudolph Steiner Foundation
  2. Running Cyanotech for his own benefit while ignoring the interests of other shareholders
  3. Entrenching himself as Cyanotech's chairman with a captive Board of Directors.
  4. Further entrenching his control by replacing Cyanotech's corporate law firm with his own law firm, the very same law firm that he used to create the supposedly charitable network of nonprofit entities used to obscure public/regulatory scrutiny of his activities.
Now take a look at what MAD's father Leonard Davis did when he controlled AARP,  running it for the benefit of his for-profit Colonial Penn insurance companies (link to main article):
"Although the Colonial Penn companies were theoretically separate from AARP,  Davis, to protect his marketing bonanza, wrapped Colonial Penn tentacles firmly around every aspect of the operation. According to a 1977 lawsuit by former executive director, Harriet Miller, Davis had carefully insulated the board from AARP's financial operations, and at the same time he had made them almost utterly dependent on Colonial Penn.  Contracts drafted for AARP by lawyers close to Davis, for example, delegated the right to select insurance carriers for AARP and NRTA members to a private company called National Association Plans Inc - a subsidiary of Colonial Penn.
In the early 1970s, Davis shored up his control by introducing a new law firm as AARP's outside counsel. The firm, which went through several name changes, maintained offices in the same Madison Avenue building that house Colonial Penn's New York offices, ARRP's local offices, and Davis's personal offices and those of the Davis Family Foundation."  


https://www.amazon.com/Austin-Powers-Spy-Who-Shagged/dp/B00001U0BN

Wednesday, June 28, 2017

The Source of Michael Arlen Davis' Fortune

Michael Arlen Davis (MAD) is a rich man. Inquiring minds want to know how that came to be.  The answer will likely surprise you.  MAD's dad, Leonard Davis, was a co-founder of AARP - though it will take some research to uncover that fact.

Old Leonard put up the original $50,000 to start AARP, but his motivations might not have been to help the elderly.  According to Charles R. Morris, author of a book chronicling AARP's history, Leonard Davis used the organization as a front for selling overpriced insurance to the elderly--its political activism on behalf of retired people largely a cynical effort to establish credibility.

Shortly after co-founding AARP, Leonard Davis created Colonial Penn, a for-profit insurance company under his control:
Hyperbole, plus Leonard had hair
"Although the Colonial Penn companies were theoretically separate from AARP, Davis, to protect his marketing bonanza, wrapped Colonial Penn tentacles firmly around every aspect of the operation. According to a 1977 lawsuit by former executive director, Harriet Miller, Davis had carefully insulated the board from AARP's financial operations, and at the same time he had made them almost utterly dependent on Colonial Penn...In the early 1970s, [Leonard] Davis shored up his control by introducing a new law firm as AARP's outside counsel. The firm...maintained offices in the same Madison Avenue building that house Colonial Penn's New York offices, ARRP's local offices, and Davis's personal offices and those of the Davis Family Foundation...

AARP, which to all appearances was a dowdy nonprofit organization serving the elderly, had been turned into a money-minting machine - it was the alchemists trick, said one reporter, converting base metal into gold.  From 1967 to 1976, Colonial Penn's revenue had grown a stunning tenfold, from $46 million to $445 million. Pretax income had grown from almost nothing in 1967 to more than $50 million. Almost all of its revenues - 92% of its health insurance revenues - came from AARP members. An analysis by Forbes magazine in 1976 showed that Colonial Penn, measured by average 5-year return-on-capital, was the most profitable company in the country.

Davis, with about 19.5% of the company, was the controlling shareholder. The market value of his shares, depending on the ups and downs of the stock market, fluctuated between $90 million and $125 million in 1975 and 1976. And that did not count the large blocks of stock Davis had already unloaded. In 1970-72 alone, the Davis family realized more than $80 million from the sale of Colonial Penn stock."
The lid was blown off the scam in 1978, when Andy Rooney and CBS's 60 Minutes did one of their famous sting operations. 
"The 60 Minutes expose of AARP which aired on May 14, 1978, at the seven o'clock prime time news hour under the title "Super Salesman," was devastating.  A former Colonial Penn executive remembers it was a turning point in the company's fortunes. AARP and Colonial Penn made all the wrong tactical moves. They tried stonewalling Rooney...In any case, AARP national officers, fed up with the Colonial Penn domination, were quietly feeding Rooney information and rumors...The AARP volunteers and members Rooney did manage to talk to clearly had no idea of the role Colonial Penn played in their organization. Most tellingly, AARP members had no idea that editorial like articles in the health insurance on health insurance in modern maturity were actually Colonial Penn advertisements...
The Rooney show marked the beginning of the end of the Colonial Penn/AARP relationship.  In a related development,  the postal service at begun a serious investigation into the Colonial Penn/AARP abuse of the nonprofit mailing privilege...the investigation continued until 1981 and resulted in the recommendation to the US District Attorney for a criminal fraud action against AARP and Colonial Penn...
Although Colonial Penn's fingerprints stayed on the organization for a long time...[AARP] began a serious redirection in the 1980s...While Andrus's [Davis' co-founder] picture is everywhere and she is quoted frequently, I could not find a single mention of [Leonard] Davis anywhere. The former honorary president, whom the official histories once billed as Andrus's closest collaborator is now a non-person."
Read More: Leonard Davis, Andy Rooney, and the CBS 60 Minutes Expose
Read More: The AARP--Exposing Leonard Davis for what he was

Legal Notice and Disclaimer: We are huge fans of the Simpsons. However, we do not own the image above. "The Simpsons" TM and (C) (or copyright) Fox and its related companies. All rights reserved. Any reproduction, duplication, or distribution in any form is expressly prohibited.This website, its operators, and any content contained on this site relating to "The Simpsons" are not authorized by Fox.

Tuesday, June 27, 2017

Inconceivable!

From Meridian's May 6, 2016 letter to Cyanotech's board of directors:
"The Chairman [Michael Arlen Davis] has elected to make his filings on Schedule 13G rather than Schedule 13D. This is extremely odd - the Chairman has been on Cyanotech's board of directors since the time of his first filing in 2002 and he has served as chairman of the board since 2011. Anyone familiar with SEC reporting requirements, whether counsel to Cyanotech or one of the parties that has assisted the Chairman with the management of his many foundations and trusts, would/should have told the Chairman that he has been filing on the wrong form. Meridian believes it inconceivable that the Chairman made filings over 14 years without becoming aware of the error. Accordingly, it seems likely that the Chairman knew or was told he was filing on the wrong form, but continued using Schedule 13G as part of an effort to minimize public disclosure and scrutiny."

Monday, June 26, 2017

Ivan Boesky Went to Jail When He Was Caught "Parking"

One of the most serious allegations against Michael Arlen Davis relating to his systematic violations of Federal securities laws is his "parking" of shares with Rudolph Steiner Foundation (RSF).  RSF is Cyanotech's second largest shareholder with a current 16.5% stake - and it never paid a cent for any of those shares.  Every single share of Cyanotech stock was paid for and placed into RSF's hands by Michael Arlen Davis.  It is believed that Michael Arlen Davis "parked" shares with RSF in order to avoid the ownership limitations imposed by Section 4943 of the Internal Revenue Code.

The most famous example of enforcement of Federal securities laws against "parking" came in the case of Ivan Boesky.  Here is an excerpt on that case from a   law school textbook:


https://en.wikipedia.org/wiki/Ivan_Boesky
Click on image for more info.
"Stock Parking as a Violation of 13(d). The "parking of shares" can give rise to a violation of §13(d). In the typical stock parking arrangement, one trader will agree to buy shares of a publicly traded company on the open market and to hold these shares for the benefit of another trader, whose identity can then be concealed from other market participants...These arrangements to "park shares" in the account of another trading professional allow the beneficial owner to carve up ownership of the company's stock in order to avoid the disclosure requirements of §13(d)...Parking violations were made famous in the 1980s as a result of the SEC's prosecution of Ivan Boesky; as described in more detail in the next chapter, this investigation ultimately led to the downfall of Michael Milken and his firm, Drexel Burnham Lambert."

A 1998 New York Times article reporting on the government's case against Boesky explained how Boesky (in the same manner as Michael A. Davis with RSF) used others to conceal the true extent of his stock holdings in companies

"People familiar with the case said yesterday that the investigation was tied to a case last year in which Michael Davidoff, former head trader at Seemala, pleaded guilty to securities fraud. In his plea, Mr. Davidoff said he had reached a ''secret agreement'' with officials at Seligmann Harris to ''park'' stocks. Stock parking involves secretly transferring securities to another entity to evade restrictions on holdings."

A 1997 Washington Post article provided further details on the scheme and the illegal practice of "parking": 

"Stock parking is a technique used to conceal ownership of shares. By parking -- or placing shares with others -- Davidoff helped Boesky conceal that he was buying stock."

As a result of his illegal activities, Boesky received a prison sentence of  3 1⁄2 years and was fined $100 million. Boesky was permanently barred from working in securities.  The full story was detailed in James B. Stewart's book Den of Thieves.  Click on image below for more information:

https://www.amazon.com/Den-Thieves-James-B-Stewart/dp/067179227X


Sunday, June 25, 2017

Shareholders must disclose when they are a "Group"

From Meridian's original complaint against Michael Arlen Davis and Rudolph Steiner Foundation (at page 4)
Section 13(d)(3) of the Exchange Act addresses group membership for purposes of Section 13(d) and provides that "[w]hen two or more persons act as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of an issuer, such syndicate or group shall be deemed a 'person' for the purposes of this subsection." 15 U.S.C. § 78m(d)(3). The SEC regulation under Section 13(d)(3) further provides that "[w]hen two or more persons agree to act together for the, purpose of acquiring, holding, voting or disposing of equity securities of an issuer, the group formed thereby shall be deemed to have acquired beneficial ownership . . . of all equity securities of that issuer beneficially owned by any such persons." Rule 13d-5(b)(1), codified at 17 C.F.R. § 240.13d-5(b)(1).

Saturday, June 24, 2017

“Group” Liability for 4943 Violation Could Be in $Millions

The most likely reason Michael Arlen Davis (MAD) has been “parking” shares with Rudolf Steiner Foundation (RSF) is to avoid the penalties created by Internal Revenue Code Section 4943.  That section creates severe economic penalties when not-for profits own in excess of 20% of an operating business.  MAD has been very careful over the years making sure that his own holdings never go above 20%.  The combined holdings of MAD and RSF, however, now stand at 33%.

So what does Section 4943 say about two entities holding more than 20%?  It seems to have anticipated MAD’s behavior – Section 4943(c) provides that the permitted holdings of any private foundation is (i) 20 percent of the voting stock, reduced by (ii) the percentage of the voting stock owned by all disqualified persons.

What is a disqualified person?  The term “disqualified person” meansa person who is (A) a substantial contributor to the foundation with that being defined as anyone any person who contributed more than $5,000 to the private foundation, if such amount is more than 2 percent of the total contributions received in that year by the foundation.  The status of being a “disqualified person” continues for 10 years.  Since Skywords Family Foundation contributed more than 2% of the total contributions received by RSF in 2011, Davis and Skywords are each a “disqualified person” until at least 2021.

Looks like a 200 percent penalty tax could possibly be in in the future for the MAD/RSF “Group”

Dayisun Tngri

READ MORE:  RSF's Likely Violation of Section 4943 Internal Revenue Code

Friday, June 23, 2017

Thursday, June 22, 2017

Why Meridian Initiated its Lawsuit Against Michael Arlen Davis


 From Meridian Schedule 13D filing on May 25, 2016

"On May 24, 2016, Meridian filed a shareholder derivative action on behalf of Cyanotech's stockholders against the Company, its Chairman of the board of directors and the Rudolf Steiner Foundation ("RSF").  The civil complaint, filed in the United States District Court for the District of Nevada, seeks Declaratory and Injunctive Relief under the Securities Exchange Act of 1934 and the Nevada Control Share Statute due to the undisclosed group created by the Chairman and RSF, and that group's ability to control Cyanotech.

Meridian also claims that the misrepresentations or omissions of material facts by the Chairman caused Cyanotech to violate Section 10(b)(5) of the Securities Exchange Act of 1934.  Finally, Meridian claims that the Chairman's actions breached his fiduciary duties as a member of the board of directors of Cyanotech.

A copy of Meridian's complaint may be read--here


Meridian brought its claims in Federal court after Cyanotech's board of directors failed to take action with respect to numerous securities disclosure and corporate governance deficiencies detailed by Meridian in a letter to the board of directors (see the above link starting at page 27).  On May 6, 2016, Meridian delivered the letter to Cyanotech's interim CEO, who is also a board member, and encouraged him to first share the letter with the chairman of the Company's audit committee and then for these two directors to consider engaging legal counsel independent of Cyanotech's Chairman to consider the contents of the letter and appropriate next steps.

Since delivering the May 6, 2016 letter, Meridian has received no indication that Cyanotech's board of directors has taken action to address the issues raised by the letter.  To the contrary, on May 23, 2016, the Company issued a press release reporting that the chairman of its audit committee had resigned from the board of directors on May 17, 2016.  One possible interpretation of this news is that the audit chairman attempted to take the appropriate actions in response to Meridian's May 6, 2016 letter, was blocked and therefore considered it impossible to continue to serve on Cyanotech's board of directors.  Meridian believes the audit chairman's resignation is further evidence of the inability of the Cyanotech board to function properly under the leadership of its current Chairman."