Power Bar Investment Leads to Lawsuit

Devin Cole

An investment group tied to George’s Inc. of Springdale has accused a California nutrition company of misrepresenting its financial status in order to entice the group to make a $3 million investment.

GSP Bonk Breaker LLC, which is led by Devin Cole, filed the suit in Washington County Circuit Court through attorney Robert George of Friday Eldredge & Clark in Rogers. Cole is the chief strategy and commercial officer at George’s, and GSP’s address is the same as George’s corporate headquarters.

Cole did not respond to messages left by Arkansas Business. The suit said that GSP has multiple members but did not name any; Cole was listed as the group’s chairman in a supporting document.

The lawsuit claims that Bonk Breaker LLC of Los Angeles and its co-CEOs Jason Winn and Chris Frank were looking for investors in late 2017 when they made contact with the GSP members. Bonk Breaker sells power and performance protein bars and other products.

Winn and Frank got a meeting with the GSP members — only Cole is identified in court filings — at which they used an “investment deck” to pitch the company’s success.

Those claims included $1.8 million in sales in 2017, approval to sell its products in Costco stores and a partnership with USA Cycling.

The members of the GSP group agreed to buy 4,168 shares for $3 million in a deal that closed Jan. 12, 2018. Only after the closing, however, did GSP ask to see Bonk Breaker’s 2017 financials, which revealed a “graver” situation than had been portrayed in the pitch.

The suit said GSP learned the company had lost money in 2017, no agreement with Costco was in place and USA Cycling had terminated the partnership. GSP said half of its investment was designated to produce the inventory needed for the Costco arrangement so disclosure of the truth would have likely affected the investment decision.

GSP also claimed in the lawsuit it had found “suspicious issues” such as “fictitious” accounts and sales. In April 2019, according to the lawsuit, Winn, GSP and other investors fired Frank for providing inaccurate information.

GSP is claiming the misrepresentations constitute constructive fraud, violations of the Arkansas Securities Act and a breach of contract. It is asking for $3 million, fees and interest from the court.