The Davis/RSF Investment "Group" Operating Model

"Little Big Shady" and his father, the "Notorious BIG Shady"

Michael Arlen Davis created an investment “group” with RSF relating to Cyanotech during 2010 when be began “parking” publicly traded Cyanotech shares with RSF,  as necessary, to maintain chairman Davis’ officially reported direct Cyan holdings below the 20% ownership limitation created by IRC Section 4943.

Careful review of the record has revealed that Davis’ periodic charitable “gifts” of Cyanotech shares to RSF correspond with Davis’ activity of acquiring additional Cyanotech shares.

The purpose of the “gifts” therefore seems to be allowing him to acquire additional shares  while keeping his own direct holdings just below the 20% ownership limitation created by Internal Revenue Code Section 4943.

The effect of Davis’ “parking” of CYAN shares with RSF was to permit the undisclosed  Davis/RSF “group” to routinely increase its holdings while both concealing their actions and (potentially) sidestepping expensive IRC Section 4943 penalties. 


The activities of the partners were concealed from scrutiny by Davis’ practice of failing to make prompt, proper and complete disclosures with respect to his transactions in Cyanotech stock - this plan succeeded without incident until 2016, when Cyanotech’s number three shareholder Meridian uncovered Chairman Davis’ improper filing practices and his long-term and very close investment partnership relationship with RSF.

It is remarkable that following this very troubling discovery, none of Davis, RSF or Cyanotech took even remedial corrective action until after Meridian (i) delivered its May 6, 2016 letter to the board; (ii) filed a series of Schedule 13D filings detailing the history and nature of the Davis/RSF relationship; and (iii) filed a complaint in Federal district court in Nevada, the jurisdiction in which Cyanotech was organized.
 

The Davis/RSF partnership dates back even before 2010, the year Davis apparently began “parking” Cyanotech shares with RSF;  Davis and RSF had already been working together as a strategically-aligned and well coordinated investment partnership since at least 2002. 


Review of all available Form 990 tax filings for Skywords, Ginungagap and Yggdrasil indicate that Davis and RSF created the three non-profit entities at approximately the same time in the early 2000s with the specific intent that the entities be used to coordinate the partners’ activities in acquiring, developing, and controlling world class biodynamic (e.g. Rudolf Steiner inspired) agricultural assets in both California and Hawaii. It is no coincidence that the sharp rise of Davis and RSF partnership activities happened around the time Davis’ father suddenly passed on, leaving the younger Davis extremely wealthy.
 
Yggdrasil was specifically chartered to receive land and hold conservation easements. Yggdrasil reported acquiring its original Filigreen related property in Mendocino county in late December 2000, and commencing full operations in 2001. Davis created Ginungagap in 2004, which in turn formed an entity, Filigreen Farm LLC, which immediately leased Yggdrasil’s Mendocino properties under a 30-year lease agreement.

That Davis and RSF created their respective entities with the intention of having them closely collaborate is signaled by the names of their respective not-for-profit entities. “Ginungagap” and “Yggdrasil” are not random words, they are foundation elements within Norse mythology.  Yggdrasil is the tree of life, an eternal green Ash tree, with branches that stretch out over all the world and extend up and above to the heavens.  “Ginungagap” is what came before, the dark, lifeless void.

The operating model for the Michael Davis/Skywords/Ginungagap and Rudolf Steiner Foundation/Yggdrasil is summarized visually in the diagram below. Upon review of the large volume of data provided as a free public service in this website, the confusing (likely by design) web of related nonprofit foundations under chairman Davis' direct control and/or substantial financial influence, can now be described by a reasonable and non-conflicted person as follows:

(1) Davis provides the funding necessary to acquire and develop the properties, and then controls/manages the properties while enjoying the usage and other benefits derived from his controlling the properties; and (2) RSF holds certain of the assets (most likely as determined by Davis) presenting itself (x) in the case of Filigreen, as the owner of the property and (y) in the case of Cyanotech, as an independent "passive" investor,  and not a part of a “group” with Davis (until apparently forced by Meridian Nevada lawsuit filings to withdraw that representation in a March, 2017 SEC 13D filing that seemed somewhat detached from reality at the time (and more so today).



Cheers,
Dayisun Tngri