VLYF.. $0.052.. Down 63%

VLYF takes a big ht on this 8K filing..

The Company is discussing with the U.S. Attorney for the Eastern District of Kentucky allegations that it exported over $37 million worth of military semiconductors to Hong Kong since about 2009 in violation of the International Traffic in Arms Regulations (“ITAR”). Although the Company’s internal investigation is in its early stages, the Company has reason to believe that the vast majority of these exports involved commercial semiconductors that were clearly not subject to control under the ITAR, and were not controlled for export to Hong Kong under the Export Administration Regulations (“EAR”). The U.S. Attorney executed a search warrant on the Company and subsequently seized the bank accounts of the Company, which held approximately $1.5 million, reportedly on the basis that these funds were entirely the proceeds of illegal exports or an instrumentality thereof, which the Company denies. The Company intends to seek judicial relief for return of its funds and the unsealing of the affidavit supplied in support of the forfeiture, which the Company has reason to believe contains allegations that are inaccurate with the regard to the source of the seized funds and the characterization of its export activity. If the Company is unsuccessful in obtaining such judicial relief in a timely manner or is unsuccessful in defending itself against such allegations, the Company could be materially and adversely affected. Until the matter is resolved, the Company may not be able to sell momentum wheels and related components, which could adversely and materially affect the Company.