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Comment CEO says Wolfpack Analysis claims its firm is fraudulent, "deceptive", "outdated".

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On Friday, CNBC's "Fast Money" spoke to Wolfpack Research founder Dan David after the SEC confirmed that it was investigating iQiyi, a company sometimes known as Netflix of China, after its company claimed iQiyi have increased his sales figures.

In the interview, David also targeted a company called Remark Holdings, saying he believes the $ 119 million tech company committed scams and that the "chicken is home after losing 30% to 40% for its stock." will come to sleep ".

Remark shares closed nearly 8% on Wednesday. The $ 1.20 stock is up more than 133% since the start of the year.

"The records we pulled out of China show that the operations they supposedly have a contractual relationship (Variable Interest Entity, or VIE) with that we don't even believe are valid, do not match the numbers who have them here in the United States, "David told CNBC's Melissa Lee, referring to Remark. "They lost $ 20 million more on their books here in the US than they show in their SEC filings and credit reports in China. How do you arrange that when they also say they are consolidating this financial data?"

The short seller specifically questioned the fact that Barstool Sports founder Dave Portnoy, who runs a trading blog called Davey Day Trader Global, advises his millions of followers on investing like Remark, even though he is admittedly "financially ignorant".

Portnoy told the New York Post this week that his bet on Remark could have cost him "nearly seven figures."

CNBC received a response Wednesday from Remark Holdings CEO and chairman Kai-Shing Tao, who described Wolfpack founder's statements as "misleading" and his information as "out of date".

Here is Tao's counter-argument:

Wolfpack's main claim is that we do not own our sharecare stake. That is absolutely wrong. As of June 30, 2020, we own approximately 4.5% of Sharecare's outstanding shares. We also represent the board of directors. Eventually, the lawsuit that sought to get Sharecare out of control and force them to allocate our interest to them has now been resolved as we recently paid in full all amounts owed to Greenspuns in order to resolve that dispute related to an earnout payment. Remark has never ceased to own its ~ 4.5% stake in Sharecare and the underlying judgment against Remark has now been repaid in full, leaving no grounds for a possible seizure of that stake. Your argument that we don't have proper VIE documentation Just because we haven't made all of these documents public is wrong. We have standard VIE documents, including related loan agreements, drawn up several years ago with the assistance of Arnold & Porter, an internationally recognized law firm. VIE control may not be synonymous with direct shareholder participation, but it is widespread among Chinese companies controlled by foreign interests. In fact, Alibaba, Tencent, Netease, JD.com, and Baidu are some of the many examples of large corporations that have structured their China business using VIEs. We initially sourced cameras and other components from various third-party suppliers, including HIKvision (whose cameras are still available on sites like Amazon), although we've never shared any of our AI technologies with them. We are now an ODM, an original design manufacturer, for both our cameras and our pads. We design the cameras and hired a contract manufacturer to make both our cameras and our rPads. They build to our design and specifications and add our software. You manufacture according to our design and specifications. Because of this, it is now a Remark brand camera / pad. The technology and IP are controlled by Remark.4. Regarding our investment in AIO, we originally planned to invest $ 1 million in the company. However, after financing $ 500,000, we found that the company was not getting the results we expected and not funding the rest. CDRT subscribed to AIO's 20% stake at a post-money value of $ 5 million and deposited $ 500,000. In this regard, AIO increased its share capital from RMB 1 million to RMB 1.25 million (i.e. to reflect CDRT's 20% stake), and the difference between USD 500,000 and RMB 250,000 was deposited into the non-excess capital surplus account is mirrored as the share capital of the AIO. It's very typical. Wolfpack's comment on CDRT's capital contribution based on their alleged review of SAIC filing is flawed and appears to mislead or confuse Remark's investors. Finally, they claim that we addressed working capital and cash issues in each of our filings, but Wolfpack Research is calculating working capital inaccurately based on 2018 numbers and does not show any source material other than tax documents in China to show how we are doing under GAAP have not properly consolidated. We are a public company with reputable auditors who regularly review our financial information. As of June 30, 2020, our cash balance exceeds $ 10 million and our debt has been significantly settled.

Tao added, "We pride ourselves on helping our customers reopen their stores and schools safely while they work to maintain the latest safety standards."

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