Businessman Ron Sim has withdrawn his letter of demand served on Trek 2000 International, after he divested the bulk of his stake to Terence Wong of Azure Capital in a married deal at 12 cents each.
Back in Dec 2024, Sim, alleging "fraudulent misrepresentations", tried to go after company founder Henn Tan and his son Wayne, who is the current executive chairman.
Sim, best known as the founder of the Osim lifestyle products company, invested in Trek 2000 back in 2015, paying 43.65 cents for 26 million new shares costing him a total of $11.35 million.
Trek 2000's share price dropped to as low as four cents in 2024, before a tepid recovery since then.
In a deal completed on May 26, Wong bought 22.07 million shares from Sim, giving the former a 7.3% stake.
With Sim selling down his stake to just 2%, he has also withdrawn his claims, says Trek 2000 on May 26.
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Trek 2000's shares gained 28.93% to close at 20.5 cents on May 26, ahead of this announcement. At this level, Wong is already very into the money with a paper gain of $1.88 million.
"Trek has delivered a step-up in profitability, and its patented wireless memory technologies position it to participate in the growing demand for high-performance, data-intensive applications driven by AI adoption," says Wong.
"Our investment reflects conviction in the value of Trek’s intellectual property portfolio as Trek advances its growth strategy," he adds.
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For its FY2025, Trek 2000 reported earnings of US$4.6 million, up 1,275.8%, with so-called AI of Things products contributing the bulk of the year's revenue, which was down 1.1% y-o-y to US$19.6 million.
Trek 2000 reiterates its expectation that its AI-powered aviation product could generate revenue of more than US$15 million through FY2027.
Wayne, who wears another hat as group president, welcomes Wong as a substantial shareholder.
"Following the resolution of the legacy shareholder matter, the board and management remain focused on executing our growth strategy across memory, AI-related, and renewable energy solutions," he adds.
