TROOPS, Inc. Responds to Short-Selling Report Amid Legal Proceedings in Hong Kong

TROOPS, Inc. (NASDAQ: TROO) has released an official statement rebutting the claims presented in a recent short-selling report by Muddy Insights. This report raised questions regarding TROOPS' financial stability and legal exposure, specifically in relation to ongoing matters in Hong Kong. However, TROOPS management strongly disagrees with the report's assertions and stands by the company's financial integrity.

Overview of the Situation

The report from Muddy Insights is characterized by what TROOPS calls speculative assertions, selective presentation of facts, and conclusions that lack substantial evidence. The management's response indicates that the report misrepresents the company’s situation and focuses too much on potential adverse outcomes without accounting for the court rulings that have occurred.

As part of this legal struggle, it’s essential to note that in June 2025, the High Court of the Hong Kong Special Administrative Region decided on a case (Action No. HCA 938/2022) involving TROOPS and several other defendants. The court ordered that TROOPS, along with its subsidiaries, is liable for significant amounts, specifically HK$163,400,000 and HK$241,400,000. However, TROOPS stresses that the liability is joint and several with other defendants. This means that the responsibility for the judgment is shared, and TROOPS is not bearing the entire burden alone, given that other parties involved are also facing similar liabilities and have provided security to the court.

The Appeal Process

Furthermore, TROOPS has filed a Notice of Appeal, which is scheduled to be heard in February 2027. Recent hearings have also taken place, including one concerning the stay of execution of the judgment, which was granted by the court on May 8, 2026. The company emphasizes that these developments render the claims of an imminent