TSPH TuSimple Holdings Inc (CE)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. )¹

TuSimple Holdings Inc.

(Name of Issuer)

Class A Common Stock, par value $0.0001 per share

(Title of Class of Securities)

90089L108

(CUSIP Number)

XIAODI HOU

15310 Park Row

Houston, Texas 77084

 

RYAN NEBEL

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

December 16, 2024

(Date of Event Which Requires Filing of This Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ☒.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

 

 

1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

1

NAME OF REPORTING PERSON

White Marble International Limited

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ☐

(b) ☐

3

SEC USE ONLY

4

SOURCE OF FUNDS

OO

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

☐

6

CITIZENSHIP OR PLACE OF ORGANIZATION

SAMOA

NUMBER OF

7

SOLE VOTING POWER

SHARES

BENEFICIALLY

- 0 -

OWNED BY

8

SHARED VOTING POWER

EACH

REPORTING

12,000,000

PERSON WITH

9

SOLE DISPOSITIVE POWER

- 0 -

10

SHARED DISPOSITIVE POWER

12,000,000

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

12,000,000

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

☐

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

5.4% (or 26.7% of the aggregate voting power)

14

TYPE OF REPORTING PERSON

CO

  

1

NAME OF REPORTING PERSON

White Marble LLC

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ☐

(b) ☐

3

SEC USE ONLY

4

SOURCE OF FUNDS

OO

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

☐

6

CITIZENSHIP OR PLACE OF ORGANIZATION

DELAWARE

NUMBER OF

7

SOLE VOTING POWER

SHARES

BENEFICIALLY

- 0 -

OWNED BY

8

SHARED VOTING POWER

EACH

REPORTING

22,567,321

PERSON WITH

9

SOLE DISPOSITIVE POWER

- 0 -

10

SHARED DISPOSITIVE POWER

22,567,321

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

22,567,321

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

☐

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

10.2% (or 29.1% of the aggregate voting power)

14

TYPE OF REPORTING PERSON

OO

  

 

1

NAME OF REPORTING PERSON

Xiaodi Hou

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ☐

(b) ☐

3

SEC USE ONLY

4

SOURCE OF FUNDS

OO

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

☐

6

CITIZENSHIP OR PLACE OF ORGANIZATION

UNITED STATES

NUMBER OF

7

SOLE VOTING POWER

SHARES

BENEFICIALLY

2,874,993

OWNED BY

8

SHARED VOTING POWER

EACH

REPORTING

22,567,321

PERSON WITH

9

SOLE DISPOSITIVE POWER

2,874,993

10

SHARED DISPOSITIVE POWER

22,567,321

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

25,442,314

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

☐

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

11.5% (or 29.7% of the aggregate voting power)

14

TYPE OF REPORTING PERSON

IN

  

 

Explanatory Note:

The undersigned make this filing to dispute and in response to public disclosures by Mo Chen and the Issuer (as defined below) concerning approximately 29.7% of the Issuer’s total voting power beneficially owned by the Reporting Persons (as defined below). White Marble International (as defined below), White Marble (as defined below) (together, “WM”) and Mo Chen entered into a two-year Proxy Voting Arrangement on November 9, 2022 (the “Disputed Proxy Voting Arrangement”), that authorized Mo Chen to control how WM’s shares were voted. The Reporting Persons maintain the Disputed Proxy Voting Arrangement expired on November 9, 2024; however, on November 13, 2024, Mo Chen filed an amendment to his Schedule 13D in which he contradicted his prior disclosure that the Disputed Proxy Voting Arrangement had a two-year term, and for the first time took the position that WM and Mo Chen had entered into the Disputed Proxy Voting Arrangement without a fixed term. Additionally, the Issuer’s recent proxy solicitation materials issued in connection with the Issuer’s upcoming annual meeting of stockholders scheduled to be held on December 20, 2024 (the “AGM”) suggest that Mo Chen continues to control how WM’s 29.7% voting stake is voted, even after expiration of the Disputed Proxy Voting Arrangement on November 9, 2024. At the AGM, stockholders will be voting on, among other things, a proposal by the Issuer to enact certain governance changes that will have the effect of entrenching the Issuer’s current Board of Directors (the “Board”), including implementation of a staggered Board and elimination of the right of stockholders to remove directors without cause (the “Entrenchment Proposal”).

WM is challenging Mo Chen’s assertion of voting control over the shares owned by the Reporting Persons in a lawsuit (the “Delaware Action”) filed by WM in the Delaware Court of Chancery (the “Chancery Court”). The Chancery Court in the Delaware Action has granted WM’s application for expedited resolution of the voting rights dispute, and it has implemented a status quo order to preserve the Issuer’s corporate assets and limit certain governance changes during the pendency of the lawsuit. WM’s lawsuit is not scheduled to be resolved before the AGM. Accordingly, the Reporting Persons believe that it is important for the preservation of the Issuer’s assets and the protection of stockholder rights that minority stockholders vote against the Issuer’s proposals at the AGM, especially the Entrenchment Proposal. Leading independent proxy advisory firms ISS and Glass Lewis, whose recommendations guide institutional investors holding trillions of assets, strongly oppose the Entrenchment Proposal, concluding that it fundamentally conflicts with stockholder interests, particularly given the current circumstances requiring enhanced Board accountability. Both firms have recommended a WITHHOLD vote for all independent directors except the Issuer’s CFIUS director, Albert Schultz. ISS has taken the further step of opposing nearly the entire Board slate, including Cheng Lu, Mo Chen, Jianan Hao, James Lu and Zhen Tao.

After the Delaware Action is decided, and assuming the Reporting Persons’ voting control of its 29.7% voting stake is confirmed, the Reporting Persons intend to conduct a consent solicitation process to remove directors serving on the Board. Upon soliciting enough stockholder support to exceed the 50% threshold—i.e., with the support of approximately 20.3% more voting power—the Reporting Persons intend to submit stockholder written consents removing the current Board members, except for Mr. Schultz, in furtherance of replacing them with truly independent directors. The Reporting Persons then intend to propose that the new, independent Board evaluate and conduct a liquidation and dissolution of the Issuer as the most effective way to maximize stockholder returns on their investments in the Issuer given its current condition.

Item 1.

Security and Issuer.

This statement relates to the Class A Common Stock, $0.0001 par value per share (the “Class A Shares”), of TuSimple Holdings Inc., a Delaware corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 9191 Towne Centre Drive, Suite 150, San Diego, California 92122.

Item 2.

Identity and Background.

(a)       This statement is filed by:

(i)

White Marble International Limited, a Samoa company (“White Marble International”);

(ii)

White Marble LLC, a Delaware limited liability company (“White Marble”); and

(iii)

Xiaodi Hou.

Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to that certain Joint Filing Agreement, as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.

(b)       The address of the principal office of White Marble International is Sertus Chambers, P.O. Box 603, Apia, Samoa. The address of the principal office of White Marble is 12645 Memorial Dr., Suite F1 #528, Houston, Texas 77024. The address of Dr. Hou is 15310 Park Row, Houston, Texas 77084.

(c)       The principal business of each of White Marble International and White Marble is investing in securities. White Marble also serves as the sole shareholder of White Marble International. Dr. Hou serves as the sole director of White Marble International, manager of White Marble and trustee of certain trusts (the “Trusts”).

(d)       No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)       No Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f)       White Marble International is organized under the laws of Samoa. White Marble is organized under the laws of the State of Delaware. Dr. Hou is a citizen of the United States of America.

Item 3.

Source and Amount of Funds or Other Consideration.

The Class A Shares beneficially owned by the Reporting Persons were acquired as founder’s shares and/or granted by the Issuer in connection with Dr. Hou’s service as a director and executive officer of the Issuer.

Item 4.

Purpose of Transaction.

Dr. Hou is the co-founder and a former executive officer and director of the Issuer.

The Reporting Persons maintain that as of November 9, 2024, Mo Chen’s control of the Reporting Persons’ voting power through WM, as well as any of their transferees or assignees, is invalid due to the expiration of the two-year Disputed Proxy Voting Arrangement, signed on November 9, 2022. According to Mo Chen’s own Schedule 13D filed on November 15, 2022, “[t]he Proxy Voting Arrangement will remain in full force and effect until the earlier to occur of (i) the two year anniversary of the date of the Irrevocable Proxy [dated as of November 9, 2022] and (ii) mutual agreement in writing to terminate the Irrevocable Proxy and the Voting Agreement.”

On November 11, 2024, Dr. Hou filed for a Temporary Restraining Order (the “California TRO”) in the Southern District of California (Case No. 3-23-cv-02333-BEN-MSB) seeking to restrict transfers of the Issuer’s financial assets from the U.S. to China beyond normal business operations, including a planned $150 million transfer. A copy of the California TRO is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

On November 12, 2024, WM submitted a books and records demand pursuant to Section 220 of the Delaware General Corporation Law (the “Books and Records Demand”) to the Issuer seeking to, among other things, investigate certain corporate wrongdoing that WM has a strong credible basis to believe has occurred and is ongoing, including:

1.

The furtive and self-interested transformation of the Issuer by Mo Chen and other Board members from an autonomous trucking business in the U.S. to an Artificial Intelligence Generated Content (“AIGC”) business in China focused on producing AI gaming and animation content;

2.

The improper and wasteful depletion of the Issuer’s assets by transferring them from the Issuer’s U.S. autonomous trucking operations to Chinese entities in AIGC industries in which Mo Chen and other Board members and Issuer officers have (admittedly) personal interests;

3.

The concerted efforts by Mo Chen and other Board members to withhold material information about the abrupt transformation of the Issuer from an autonomous trucking business in the U.S. to an AIGC business in China and the illicit transfer of Issuer assets to those AIGC businesses, including by delisting the Issuer’s publicly traded stock from the Nasdaq and deregistering from the SEC in a process known as “going dark” that enables the Issuer to evade public disclosure requirements;

4.

The false and materially misleading statements by Mo Chen, other members of the Board, and certain of the Issuer’s officers about their personal interests in Chinese AIGC companies and the pervasive conflicts of interest that creates with respect to the Issuer’s transformation into an AIGC business and the transfer of its assets to Chinese AIGC companies in which various Issuer fiduciaries have a personal interest; and

5.

The scheme by Mo Chen and other members of the Board to deprive the Issuer’s stockholders of their corporate franchise rights by entrenching a conflicted Board and structuring the Issuer’s transfer of assets to Chinese entities in AIGC industries to avoid triggering a stockholder vote on the sale, lease, or exchange of all or substantially all of the Issuer’s assets.

 

A copy of the Books and Records Demand is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

On November 12, 2024, the AGM materials were distributed, portraying Mo Chen as still controlling 57% of the Issuer’s voting power based on Mo Chen’s claim that he still controls the shares beneficially owned by the Reporting Persons pursuant to the Disputed Proxy Voting Arrangement.

The Reporting Persons maintain that since November 9, 2024, Mo Chen’s control of the Reporting Persons’ voting power through WM, as well as any of their transferees or assignees, terminated due to the expiration of the Disputed Proxy Voting Arrangement. However, on November 13, 2024, Mo Chen amended his Schedule 13D filed with the SEC taking the opposite position that just the Irrevocable Proxy (as defined in Mo Chen’s Schedule 13D, as amended) expired on November 9, 2024, and the Voting Agreement (as defined in Mo Chen’s Schedule 13D, as amended) is a separate arrangement that continues indefinitely.

In response, on November 22, 2024, WM filed the Delaware Action (Case No. 2024-1208-PAF) seeking declaratory judgment that, among other things, the Disputed Proxy Voting Arrangement expired on November 9, 2024, and that since then, Dr. Hou, as beneficial owner of WM, controls how to vote approximately 29.7% of the Issuer’s total voting power. On December 2, 2024, the Chancery Court granted WM’s request for expedited proceedings of the Delaware Action. In lieu of pursuing a Temporary Restraining Order, WM agreed to negotiate with the Issuer on the form and substance of a Status Quo Order in the Delaware Action. In the negotiation process, Dr. Hou fought to secure various protections for minority stockholders, including restricting major transactions, imposing a monthly limit on the amount of assets that the Issuer could transfer to China, and preventing the Issuer from modifying its governing documents. The parties were unable to agree on all terms of a Status Quo Order and submitted competing Status Quo Orders on December 9, 2024. On December 13, 2024, the Chancery Court entered a Status Quo Order (the “Delaware SQO”) restricting the Issuer from taking, and Mo Chen from causing the Issuer to take, certain non-ordinary course actions during the pendency of the Delaware Action. The protections that Dr. Hou was able to secure in the Delaware SQO include that the Issuer must give WM at least 10 business days’ advance written notice before:

1.

Transferring cash, cash equivalents, or short-term investments exceeding US$15M per month to the Issuer’s mainland China operations through the first quarter of 2025;

2.

Approving, consenting to, or consummating any merger or acquisition of the Issuer or Issuer subsidiaries (including by way of sale of assets) with value greater than 10% of the Issuer’s assets, as reflected on the Issuer’s most recent balance sheet prior to the entry of the Delaware SQO;

3.

Amending, modifying, or repealing any provision of the Issuer’s Articles of Incorporation or Bylaws that affect stockholder voting rights (except as explicitly contemplated in the Delaware SQO); and

4.

Taking any other corporate action requiring a stockholder vote—including any sale, lease, or exchange of all or substantially all of the Issuer’s property and assets.

 

Each of the Delaware Action and Delaware SQO are attached hereto as Exhibits 99.3 and 99.4, respectively, and are incorporated herein by reference.

On November 25, 2024, Dr. Hou sent a letter to the Board, which was issued publicly on November 26, 2024 (the “November Letter”), demanding the immediate liquidation of the Issuer.

In the November Letter, Dr. Hou noted that the Issuer’s recent corporate actions raise significant concerns for U.S. stockholders and that the Issuer’s $150 million capital movement to Chinese subsidiaries coincides with reduced U.S. market visibility and SEC reporting. Dr. Hou also highlighted that since Mo Chen and Cheng Lu assumed leadership of the Issuer, the Issuer’s share price has plummeted by over 91%.

Given the foregoing, Dr. Hou informed stockholders that he commenced the California TRO and the Delaware Action in an effort to protect stockholders’ investment in the Issuer. Dr. Hou also disclosed his intention to withhold support on all proposals at the AGM. Dr. Hou called on the Board to act in the best interests of stockholders and immediately liquidate the Issuer with 100% of proceeds distributed to stockholders on a pure pro-rata basis, regardless of share class. A copy of the November Letter is attached hereto as Exhibit 99.5 and is incorporated herein by reference.

Once his voting rights are restored, Dr. Hou intends to (i) initiate a consent solicitation to remove the current Board members, except Mr. Schultz, and ultimately seek to replace them with truly independent directors committed to proper corporate governance and stockholder value protection, and (ii) propose execution of an orderly liquidation with proceeds distributed pro-rata to all stockholders regardless of share class.

On December 16, 2024, Dr. Hou issued a press release and letter to the Issuer’s stockholders (the “December Letter”) disclosing that the Reporting Persons have voted AGAINST the Entrenchment Proposal and the re-election of all directors other than Mr. Schultz at the AGM. The December Letter also noted that ISS and Glass Lewis both recommended stockholders vote AGAINST the Entrenchment Proposal, highlighting that it is not in stockholders’ best interests. The December Letter further outlines the Reporting Persons’ intention to run a consent solicitation to remove all directors on the Board, except for Mr. Schultz, and ultimately seek to replace them with independent directors. Thereafter, the Reporting Persons would seek the liquidation and dissolution of the Issuer as they believe it is best solution for stockholders. A copy of the December Letter is attached hereto as Exhibit 99.6 and is incorporated herein by reference.

Dr. Hou has established a website at www.savetusimple.com where stockholders can access detailed information about his concerns and proposed solutions.

No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Class A Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, engaging in additional communications with management and the Board of the Issuer, engaging in discussions with stockholders of the Issuer or third parties about the Issuer and the Reporting Persons’ investment, making proposals to the Issuer concerning changes to the capital allocation strategy, capitalization, ownership structure, including a sale of the Issuer as a whole or in parts, Board structure (including Board composition) or operations of the Issuer, purchasing additional Class A Shares, selling some or all of their Class A Shares, engaging in short selling of or any hedging or similar transaction with respect to the Class A Shares, or changing their intention with respect to any and all matters referred to in Item 4.

Item 5.

Interest in Securities of the Issuer.

(a)       The aggregate percentage of Class A Shares reported owned by each person named herein is based upon 208,618,399 Class A Shares outstanding as of October 28, 2024, which is the total number of Class A Shares outstanding as reported in the Schedule 13D/A filed by Mo Chen, the Chief Producer and a director of the Issuer, with the Securities and Exchange Commission on November 13, 2024, plus the 12,000,000 shares of the Issuer’s Class B Common Stock, $0.0001 par value per share (the “Class B Shares”), which are convertible at any time into the same number of Class A Shares, held by the Reporting Persons, as applicable.

As of the date hereof, White Marble International directly beneficially owned 12,000,000 Class A Shares (consisting of 12,000,000 Class B Shares convertible into the same number of Class A Shares), constituting approximately 5.4% of the Class A Shares outstanding.

As of the date hereof, White Marble directly beneficially owned 10,567,321 Class A Shares, constituting approximately 5.1% of the Class A Shares outstanding.

As of the date hereof, 2,799,993 Class A Shares were held in the Trusts, constituting approximately 1.3% of the Class A Shares outstanding.

As of the date hereof, Dr. Hou directly beneficially owned 75,000 Class A Shares, constituting less than 1% of the Class A Shares outstanding.

White Marble, as the sole shareholder of White Marble International, may be deemed to beneficially own the 12,000,000 Class A Shares beneficially owned by White Marble International, which, together with the Class A Shares it directly beneficially owns, constitutes an aggregate of 22,567,321 Class A Shares, constituting approximately 10.2% of the Class A Shares outstanding.

Dr. Hou, as the sole director of White Marble International, manager of White Marble and trustee of the Trusts, may be deemed to beneficially own the 25,367,314 Class A Shares beneficially owned by White Marble International, White Marble and held in the Trusts, which, together with the Class A Shares he directly beneficially owns, constitutes an aggregate of 25,442,314 Class A Shares, constituting approximately 11.5% of the Class A Shares outstanding.

The holders of Class A Shares and Class B Shares generally vote together as a single class on all matters submitted to a vote or for the consent of the stockholders of the Issuer, with Class A Shares having the right to one vote per share and Class B Shares having the right to ten votes per share. Based off of 24,000,000 Class B Shares authorized and outstanding and the number of Class A Shares outstanding as disclosed above, the Reporting Persons collectively have 29.7% of the total voting power of the Issuer.

The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, the beneficial owners of any securities of the Issuer he or it does not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities reported herein that he or it does not directly own.

(b)       Each of White Marble International, White Marble and Dr. Hou may be deemed to share the power to vote and dispose of the Class A Shares beneficially owned by White Marble International.

Each of White Marble and Dr. Hou may be deemed to share the power to vote and dispose of the Class A Shares beneficially owned by White Marble.

Dr. Hou has sole power to vote and dispose of the Class A Shares directly beneficially owned by him and held in the Trusts.

(c)       There have been no transactions in securities of the Issuer by the Reporting Persons during the past sixty days.

(d)       No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Class A Shares.

(e)       Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

On December 16, 2024, the Reporting Persons entered into a Joint Filing Agreement in which the Reporting Persons agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached hereto as Exhibit 99.7 and is incorporated herein by reference.

The disclosure set forth in the Explanatory Note and Item 4 above regarding the Disputed Proxy Voting Arrangement, including the Delaware Action commenced by WM in connection therewith, is incorporated by reference herein.

Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.

Item 7.

Material to be Filed as Exhibits.

99.1

California TRO.

99.2

Books and Records Demand.

99.3

Delaware Action.

99.4

Delaware SQO.

99.5       November Letter.

99.6       December Letter.

99.7

Joint Filing Agreement, dated December 16, 2024.

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: December 16, 2024

 

	White Marble LLC
	By:	/s/ Xiaodi Hou
		Name:	Xiaodi Hou
		Title:	Manager

 

 

	White Marble International Limited
	By:	/s/ Xiaodi Hou
		Name:	Xiaodi Hou
		Title:	Director

 

 

	/s/ Xiaodi Hou
	Xiaodi Hou

 

 

mwe.com Ashley R. Altschuler Attorney at Law aaltschuler@mwe.com +1 302 485 3910

November 12, 2024

VIA FEDEX AND HAND DELIVERY

Board of Directors TuSimple Holdings Inc. c/o General Counsel’s Office 9191 Towne Centre Drive, Suite 150 San Diego, CA 92122

TuSimple Holdings, Inc. c/o Corporation Service Company 251 Little Falls Dr. Wilmington, DE 19808 Attn: Board of Directors

Re:

Stockholders’ Demand for Inspection of Books and Records

Dear Ladies and Gentlemen: 

We are counsel to White Marble LLC (“WM LLC”) and White Marble International Limited (“WM Ltd.,” and with WM LLC, the “Stockholders”). The Stockholders are record owners of shares of Class A Common Stock and Class B Common Stock in TuSimple Holdings, Inc. (“TuSimple” or the “Company”).

This letter constitutes a demand under 8 Del. C. § 220 (“Section 220”) of the Delaware General Corporation Law (“DGCL”) to inspect and copy certain books and records of TuSimple for the purposes set forth below (the “Demand”). Enclosed herewith are (i) a Limited Power of Attorney authorizing McDermott Will & Emery LLP to act on behalf of each of the Stockholders (Exhibit A) and (ii) affidavits by and on behalf of each of the Stockholders stating under oath that the representations herein as to their respective ownership of the Company’s stock and their proper purposes for demanding inspection of certain of the Company’s books and records are true and correct (Exhibit B).

Through the Demand, the Stockholders demand access to books and records of the Company for the proper purposes of (1) investigating corporate wrongdoing by the Company’s co-founder, director, and controlling stockholder, Mo Chen, the Company’s Board of Directors (the “Board”), and certain of the Company’s officers, (2) valuing the Stockholders’ interests in the Company, and (3) communicating with fellow stockholders, including in connection with the upcoming annual stockholders meeting, on matters relating to their mutual interests as stockholders of the Company, including, without limitation, (a) the Company’s business plans and any fundamental changes to the Company’s business, (b) the hundreds of millions of dollars of TuSimple’s assets that have been diverted to Mo Chen’s and other Company fiduciaries’ personal companies in China, (c) material transactions involving the Company’s remaining assets and any conflicts of interests among TuSimple fiduciaries with respect to such transactions, (d) material information about significant business initiatives that has been withheld by Company management from stockholders, and (e) the removal of directors who the Company’s stockholders may desire to remove from the Board.

1000 North West Street Suite 1400 Wilmington DE 19801 Tel +1 302 485 3900 Fax +1 302 351 8711 US practice conducted through McDermott Will & Emery LLP.

As discussed further below, the corporate wrongdoing that the Stockholders seek to investigate includes:

1.

The furtive and self-interested transformation of the Company by Mo Chen and other Board members from an autonomous trucking business in the U.S. to an Artificial Intelligence Generated Content (“AIGC”) business in China focused on producing AI gaming and animation content.

2.

The improper and wasteful depletion of the Company’s assets by transferring them from the Company’s U.S. autonomous trucking operations to Chinese entities in AIGC industries in which Mo Chen and other Board members and Company officers have (admittedly) personal interests.

3.

The concerted efforts by Mo Chen and other Board members to withhold material information about the abrupt transformation of the Company from an autonomous trucking business in the U.S. to an AIGC business in China and the illicit transfer of Company assets to those AIGC businesses, including by conveniently purporting to delist the Company’s publicly traded stock and deregister from the Nasdaq to evade public disclosure requirements.

4.

The false and materially misleading statements by Mo Chen, other members of the Board, and certain of the Company’s officers about their personal interests in Chinese AIGC companies and the pervasive conflicts of interest that creates with respect to the Company’s transformation into an AIGC business and the transfer of its assets to Chinese AIGC companies in which various Company fiduciaries have a personal interest.

5.

The scheme by Mo Chen and other members of the Board to deprive the Company’s stockholders of their corporate franchise rights by entrenching a conflicted Board and structuring the Company’s transfer of assets to Chinese entities in AIGC industries to avoid triggering a stockholder vote on the sale, lease, or exchange of all or substantially all of the Company’s assets.

As set forth below, more than a credible basis exists to believe that Mo Chen, the Board, and certain of the Company’s officers have breached and are breaching their fiduciary duties, including by misappropriating Company assets, and face extensive liability to the Company for their self-interested actions to the detriment of the Company’s outside minority stockholders.

 

1.

Background

a.

TuSimple Was Founded to Develop Fully Autonomous Semi-Trucks.

TuSimple was founded in 2015 by Xiaodi Hou and Mo Chen to develop software and hardware for self-driving long-haul trucks. Originally, TuSimple aspired to create an autonomous freight network that would make commercial trucking safer and more efficient.

On March 23, 2021, the Company filed its pre-IPO registration statement with the SEC. In the registration statement, the Company introduced itself to the U.S. investing public as having “developed industry-leading autonomous technology specifically designed for semi-trucks, which has enabled [TuSimple] to build the world’s first Autonomous Freight Network,” and explained that it is “focused specifically on the truck freight market, which is a large and essential industry that moves approximately 80% of the freight in the United States by revenue.”¹ On April 16, 2021, the Company filed a prospectus with the SEC, in which the Company reiterated that its technology and focus are “specifically” applicable to autonomous semi-trucks.² The Company held its IPO in April 2021, raising more than $1 billion from U.S. investors based on TuSimple’s representations that it is an autonomous trucking company with technology that is “specifically” applicable to that industry.

In TuSimple’s October 31, 2022, letter to stockholders, it claimed that the Company completed its first fully autonomous operation of semi-trucks on public roads in December 2021, and that it was on track for full-scale deployment of autonomous vehicles based on its “industry-leading commercial vehicle AV patent portfolio” that is “focused on technology designed specifically for autonomous trucking” and “include[s] protections for essential autonomous trucking technologies.”³ The letter focuses solely on the Company’s initiatives to develop safe autonomous semi-trucks—the letter does not hint at a business transformation or remotely suggest that TuSimple’s technology is applicable to AIGC industries.⁴

---

¹ https://www.sec.gov/Archives/edgar/data/1823593/000119312521091150/d909743ds1.htm

² https://www.sec.gov/Archives/edgar/data/1823593/000119312521119311/d909743d424b4.htm

³ https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823593/000162828022027421/tsp-20221031.htm

⁴ The October 31, 2022, date of the stockholder letter is significant because it aligns with the departure of TuSimple’s co-founder, Xiaodi Hou, who was steadfast in his dedication to the Company’s safe autonomous trucking mission during his tenure. However, since Xiaodi Hou’s departure, the Company’s new management, under the direction of co-founder Mo Chen, has secretly gutted the Company’s autonomous trucking business and purportedly transformed TuSimple into an AIGC company for the personal benefit of Mo Chen and his cronies.

 

 

As discussed below, the Company’s representations about conducting business in the autonomous trucking industry—representations on which stockholders have relied in making and maintaining their investments in the Company—are belied by shocking revelations that the Board has surreptitiously caused the Company to divest its U.S. autonomous trucking assets and transfer the Company’s cash to Chinese companies involved in AIGC industries that have nothing to do with autonomous trucking and that were formed and are controlled personally by Company fiduciaries. In other words, Company stockholders have been misled to believe they were invested in a U.S. autonomous trucking business, only to find out that their money has secretly been and continues to be used to finance Chinese AI gaming and animation businesses owned by Mo Chen (and apparently competing with Mo Chen’s other personal companies), other Board members, and Company officers.

b.

Xiaodi Hou Departs the Company and Mo Chen Seizes Control.

Co-founder Xiaodi Hou served as a Company director and as TuSimple’s Chief Technology Officer until October 31, 2022. Xiaodi Hou also served briefly as the Company’s CEO from March to October 31, 2022. Since then, Xiaodi Hou has not been employed by the Company and has not been involved in the Company’s management.

During most of Xiaodi Hou’s tenure, TuSimple co-founder Mo Chen also served on the Board and primarily led the Company’s operations in China, where Mo Chen resides.

On April 23, 2022, Xiaodi Hou (the Company’s then-CEO) prohibited all TuSimple activities with non-affiliated Chinese companies. On June 9, 2022, Mo Chen stepped down from the Board when concerning allegations surfaced that he was engaging in transactions that transferred TuSimple’s proprietary technology to his personal venture in China—a hydrogen fueled truck manufacturing company called Hydron.⁵

After Xiaodi Hou’s departure from the Company, Mo Chen sought to reinstall himself and a cadre of crony directors and officers at TuSimple’s helm. On November 9, 2022, Mo Chen sent his hand-picked CEO and Board ally, Cheng Lu (discussed below), and his personal lawyer from the Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP to Xiaodi Hou’s residence at that time to pressure him, under duress, to execute an Irrevocable Proxy and Power of Attorney and a Voting Agreement (the “Mo Chen Proxy and Voting Agreement”) that lasted for two years and expired on November 9, 2024.

---

⁵ Mo Chen’s actions to support Hydron with TuSimple’s assets prompted investigations by the FBI, SEC, and CFIUS regarding whether the Company shared TuSimple’s proprietary technology with Chinese rival Hydron, and whether that sharing had implications for U.S. national security concerns. An internal investigation by the Company’s Audit Committee revealed that TuSimple had provided confidential information to Hydron. Following disclosure of the Audit Committee’s findings, federal and state litigation further detailing the alleged improprieties was filed against TuSimple and certain of its officers and directors. See Dicker v. TuSimple Holdings, Inc, No. 3:22-cv-01300-BEN-MSB (S.D. Cal); In Re TuSimple Holdings Inc. Stockholder Litigation, C.A. No. 2022-1095-PAF (Del. Ch.); Wilhoite v. Hou, No. 3:23-cv-02333-BEN-MSB (S.D. Cal.).

 

As the technical and business architects behind TuSimple’s autonomous trucking enterprise, co-founders Xiaodi Hou and Mo Chen each possess super voting Class B shares of the Company’s common stock. Those Class B shares entitled Xiaodi Hou and Mo Chen each to control between 29%-30% of the Company’s outstanding voting power; combined the founders’ Class B shares represent 58.3% of the Company’s outstanding voting power. Accordingly, by seizing control of the majority stockholder vote through the Mo Chen Proxy and Voting Agreement, Mo Chen gained total control of the Company.

Indeed, as Mo Chen admitted during a September 18, 2024, press conference,⁶ the Mo Chen Proxy and Voting Agreement “lasts for two years,” and he “needed those two years of proxy to give [himself] absolute power to restructure the company.” With that power, Mo Chen fired the entire Board before reconstituting it to include a majority of cronies loyal to Mo Chen, who also appointed himself as Board chairman. Mo Chen abused his control of the stockholder vote to entrench himself and his friends on the Board so they could cause the Company to take actions that benefit them personally, to the detriment of the Company’s outside minority stockholders.

Among Mo Chen’s appointed director cronies is TuSimple’s current CEO, Cheng Lu, whose loyalty Mo Chen purchased with Company funds. On November 20, 2022, Cheng Lu proposed a $15 million CEO compensation package for himself, but the proposal was opposed, including by Xiaodi Hou. On December 7, 2022, Mo Chen and Cheng Lu appointed conflicted director James Lu (discussed below) to the Board without prior notice to Company stockholders. On December 13, 2022, Mo Chen, Cheng Lu, and James Lu voted to alter the Compensation Committee charter to allow Mo Chen and James Lu to approve Cheng Lu’s CEO compensation package without going through the whole Board. Also on December 13, 2022, Mo Chen and James Lu were appointed to the two-member Compensation Committee. The next day, on December 14, 2022, the Compensation Committee approved, and TuSimple entered, an employment and severance agreement with Cheng Lu (the “Cheng Lu Windfall Agreement”).

The Cheng Lu Windfall Agreement provided Cheng Lu with outlandishly lucrative compensation and severance benefits for a company in TuSimple’s position. Among other benefits, Cheng Lu received a generous salary and bonus, a $9,000 per month housing stipend, a $15 million severance, and up to 6,850,000 stock units.⁷ Moreover, Cheng Lu’s wild compensation was guaranteed to be tax-free, meaning that TuSimple was obligated to pay the tax associated with the compensation package. This exorbitant payoff came at a time when TuSimple was experiencing substantial cash burn that purportedly prompted the Company to lay off 25% of its total workforce.⁸ Clearly, the Cheng Lu Windfall Agreement was the fait accompli result of a conflicted process through which Mo Chen sought to buy Cheng Lu’s loyalty.⁹

---

⁶ The press conference was conducted in Mandarin. A certified English translation transcript of the press conference is enclosed herewith as Exhibit C.

⁷ https://www.sec.gov/ix?doc=/Archives/edgar/data/1823593/000119312522306410/d432307d8k.htm

⁸ https://techcrunch.com/2022/12/21/self-driving-truck-company-tusimple-to-lay-off-25-of-workforce/

⁹ Mo Chen’s intention to jam through the illicit Cheng Lu Windfall Agreement is made even more obvious by the fact that on December 15, 2024, the day after the Cheng Lu Windfall Agreement was entered, the Board added two independent members: Wendy Hayes and Michael Mosier. Both of those independent directors have since left the Board.

 

 

Mo Chen appears to have succeeded in purchasing Cheng Lu’s loyalty with Company money. On multiple occasions, Cheng Lu has made public misrepresentations about the Company’s business plans, concealing the intention to transform the Company from an autonomous trucking business to an AIGC business, all while assisting Mo Chen in creating a web of interrelated Chinese entities involved in AIGC industries (the “Chinese Entities”). The interconnectedness of the Chinese Entities is detailed in a July 30, 2024, letter from concerned stockholders of the Company to the Board (the “Concerned Stockholders Letter,” enclosed herewith as Exhibit D). The Chinese Entities of which the Stockholders are aware include:

·

Beijing BearBear Factory Culture Co., Ltd. – Created and 99% owned by Jianan Hao, a conflicted Board member and the CEO of TuSimple’s Chinese subsidiary (“TuSimple China”). The remaining 1% is owned by Haiquan Li, the VP of TuSimple China. All registered executives of the entity are executives of TuSimple China.

·

Guangzhou BearBear Animation Culture Co., Ltd. – Created by conflicted Board member and TuSimple China CEO Jianan Hao, and 100% owned by TuSimple China.

·

Beijing BearBear Nation Cultural Media Co., Ltd. – Mo Chen is the CEO and the legal representative of this entity.

·

Beijing Shui Mo Xia Dao Cultural Communication Co., Ltd. – This entity’s email contact information, physical location, and key personnel overlap with those of other Mo Chen controlled entities, including Hydron and Beijing BearBear Nation Cultural Media Co., Ltd.

·

Guangzhou BearBear Nation’s Xia Dao Interactive Entertainment Co., Ltd. – This entity is a subsidiary of Beijing Shui Mo Xia Dao Cultural Communication Co., Ltd.

·

Shanghai Xia Dao Cultural Communication Co., Ltd. – This entity’s email contact information, physical location, and key personnel overlap with those of other Mo Chen controlled entities, including Hydron and Beijing Shui Mo Xia Dao Cultural Communication Co., Ltd.

 

Jianan Hao and James Lu are additional crony directors appointed by Mo Chen. Jianan Hao is the Chief Operating Officer of TuSimple and the CEO of TuSimple China. Jianan Hao created and owns certain of the Chinese entities to which Mo Chen and the Board are causing TuSimple to transfer its U.S. assets. James Lu professes to have been friends with Mo Chen since 2001 and has described his job on the Board as to protect Mo Chen and to “help Mo Chen out.”¹⁰ James Lu’s “help” for Mo Chen included rubberstamping the Cheng Lu Windfall agreement the day after James Lu was appointed to the Compensation Committee.

c.

Mo Chen and His Cronies Siphoned Hundreds of Millions of Dollars from TuSimple’s U.S. Operations to TuSimple China.

Throughout 2023, Mo Chen and Cheng Lu worked on transferring the Company’s remaining cash (approximately $993 million of cash and short-term investments at the beginning of 2023)¹¹ to China. According to TuSimple’s SEC Form 10-Q for the quarter ending March 31, 2023, those assets decreased to about $907 million of cash and short-term investments by the end of Q1 2023.¹² TuSimple’s SEC From 10-Q for the quarter ending June 30, 2023, revealed that the Company’s cash and short-term investments dropped to about $834 million by the end of Q2 2023.¹³ And according to TuSimple’s SEC From 10-Q for the quarter ending September 30, 2023, the Company’s cash and short-term investments fell further to less about $775 million by the end of Q3 2023.¹⁴

In the first nine months of 2023, approximately $218 million of cash and short-term investments disappeared from the Company’s balance sheet. This vanishing act coincided with TuSimple’s public cost-cutting campaign in the U.S., including about 650 U.S. job that were cut within roughly a six-month period, which was expected to save the Company more than $120 million.¹⁵ The substantial losses that the Company experienced while simultaneously taking drastic cost-cutting measures as it winded down its U.S. autonomous trucking operations raises questions about where the Company’s funds were being diverted.

---

¹⁰ The two other directors on TuSimple’s six-person Board are Zhen Tao and Albert Schultz. Notably, Albert Schultz was formerly a director of Grindr Inc., where conflicted Board member James Lu is currently the chairperson. The Stockholders continue to investigate whether Zhen Tao and Albert Schultz are independent and disinterested in the matters addressed herein, and the Stockholders reserve all rights to issue supplemental Section 220 demands in support of their investigation.

¹¹ https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823593/000162828023031648/tsp-20221231.htm

¹² https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823593/000162828023033119/tsp-20230331.htm

¹³ https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823593/000162828023033120/tsp-20230630.htm

¹⁴ https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823593/000162828023037959/tsp-20230930.htm

¹⁵ https://www.freightwaves.com/news/tusimple-cuts-300-more-us-jobs-will-keep-china-operations

 

 

As Mo Chen and Cheng Lu recently revealed in sworn statements in federal court and during the September 18, 2024, press conference, the disappearance of the Company’s cash is part of an elaborate shell game by which the Company’s money has been transferred to TuSimple China and, in turn, to the Chinese Entities that were created and are personally controlled by Mo Chen and certain Board members and Company officers.

In June 2024, Cheng Lu submitted a declaration to the United States Federal Court for the Southern District of California, stating: “TuSimple China will be the principal operating asset of TuSimple and, for the foreseeable future, the sole means by which TuSimple’s shareholders—including many U.S. investors—may benefit from the commercialization of TuSimple’s autonomous driving technology.” The declaration proceeded to explain that the various purported “subsidiaries that constitute TuSimple China … are the operating subsidiaries through which TuSimple intends and expects to generate value for TuSimple’s shareholders in the coming years.”¹⁶

In the September 18, 2024, press conference, which was called in response to the Concerned Stockholders Letter, Cheng Lu stated that “transferring money to China … is just part of the company’s regular operations.” Mo Chen expounded that “to put it simply, whether our company’s money is in Chinese accounts, Hong Kong accounts, Japanese accounts, U.S. accounts, or European accounts, it’s still our company’s business.”

Mo Chen and Cheng Lu are deliberately blurring the lines between which entities hold the Company’s cash on their balance sheets. Their conflations are particularly troubling given their shocking admissions during the press conference that they (among others), and not TuSimple China, are the personal owners of the Chinese AIGC companies—i.e., the Chinese Entities—to which the Company’s funds are being diverted. In other words, TuSimple’s cash is not going to “subsidiaries that constitute” TuSimple China; it is going to Chinese Entities involved in AIGC industries, not autonomous trucking, and that are personally owned by TuSimple’s fiduciaries:

MO CHEN: The first point—I don’t know if you have seen this [Concerned Stockholders Letter]. The first point mentions that Hao, Jianan and Li, Haiquan, who is our VP, established a company called BearBear Factory Culture Co., Ltd, which is the main entity for our animation and gaming business. … [O]n paper, this company appears to be owned by Hao, Jianan and Li, Haiquan, but in reality, it is a subsidiary controlled by TuSimple Group through the VIE structure. … So, regarding this accusation, I can only say … I really can’t say much more, alright. …

---

¹⁶ Concerned Stockholders Letter, at 7.

 

 

The company Shuimo Xiadao is my personal company, and it reflects my personal interest in anime and games. Back in 2020, when it seemed the company was about to go public, I was feeling a bit extravagant, thinking I was about to become wealthier and could start pursuing some of my own hobbies. Shuimo Xiadao has no financial dealings or business transactions with TuSimple, and there has been no connection between the two, at least up to today. Yes, there is indeed some overlap in the registration contact details for these companies. … It is true that the company used TuSimple’s address for the registration of the Shuimo Xiadao Company, but it was only for the purpose of using the registered address. Additionally, a colleague may have assisted in the company registration process. However, at that time in 2020, [TuSimple] had not yet gone public. Before going public, we were not as strict about prohibiting involvement in other activities at the same time. No, some colleagues just helped with the company’s (Shui Mo Xia Dao) registration, and there was no crossover of personnel. That’s all.

Throughout 2023, long before what Mo Chen refers to “at least up to today,” it appears that Mo Chen and Cheng Lu were able to transfer upwards of $12 million per month of TuSimple’s cash to the Chinese Entities by funneling it through TuSimple China. These transfers quickly depleted the Company’s cash assets to what is thought to be approximately $450 million today.

However, Mo Chen’s efforts to divert the Company’s assets were put on pause when a temporary restraining order was issued on January 23, 2024, in the action Wilhoite v. Hou, No. 3:23-cv-02333-BEN-MSB (S.D. Cal.), limiting the transfer of TuSimple’s trade secrets to China. Mo Chen’s exploitation of TuSimple’s assets was further restricted by a March 26, 2024, Asset Transfer Limitation and Disclosure Agreement between the derivative lawsuit plaintiffs in the action Dicker v. TuSimple Holdings, Inc., No. 3:22-cv-01300-BEN-MSB (S.D. Cal) and TuSimple, limiting the monthly money transfer from TuSimple to TuSimple China.

But, on May 14, 2024, TuSimple breached the Asset Transfer Limitation and Disclosure Agreement. TuSimple’s breach prompted the plaintiffs in the action Dicker v. TuSimple Holdings, Inc., No. 3:22-cv-01300-BEN-MSB (S.D. Cal) to move for a temporary restraining order further limiting the Company’s monthly money transfers to China. Shortly thereafter, the parties reached a settlement, which is pending approval by the federal court. Additionally, the temporary restraining order in Wilhoite v. Hou, No. 3:23-cv-02333-BEN-MSB (S.D. Cal.) expired on September 15, 2024

Recent statements by Board members, including at the September 18, 2024, press conference, suggest that TuSimple is poised to, or may already be, continuing its transfer of assets to the Chinese Entities (the “Asset Transfer”).

  

d.

Mo Chen and His Board and Officer Cronies “Go Dark” So They Can Secretly Pillage TuSimple’s Remaining U.S. Assets for the Benefit of Their Personal Businesses in China.

The extraordinary balance sheet movement and unusual activities at the Company throughout 2023 garnered public criticisms and media questions about TuSimple’s apparent exit from U.S. operations.^17,18,19 In the Company’s most recent SEC Form 10-Q filing, on November 9, 2023, TuSimple maintained that it “is a global autonomous driving technology company” that “is working to revolutionize the global truck freight market by developing proprietary technologies that enable the scaled development and deployment of autonomous freight transportation,” but also cryptically stated that it has “de-emphasized revenue-generating freight services for [its] U.S. operations” and does “not plan to generate significant revenue in the U.S. for the foreseeable future.”²⁰

Two months later, on January 17, 2024, the Company filed an SEC Form 8-K announcing that it was delisting from the Nasdaq (the “Delisting”), where TuSimple’s stock had been trading since the Company’s IPO, in a process known as “going dark.”²¹ In the Delisting notice filing, the Company also revealed that it entered into a Cooperation Agreement with Mo Chen in connection with “going dark” (the “Mo Chen Cooperation Agreement”). The Mo Chen Cooperation Agreement portends contemplation of an “extraordinary transaction involving the Company or any of its subsidiaries or any of their respective securities.” However, no details of any “extraordinary transaction” that prompted entry into Mo Chen Cooperation Agreement were provided.

Less than a month later, on February 8, 2024, the Company filed a SEC Form 15-D purporting to deregister and terminate TuSimple’s obligation to file further reports with the SEC (the “February De-Registration”).²² The Company has not filed any financial reports or other business disclosures with the SEC since then, except pertaining to its purported deregistration.

---

¹⁷ https://techcrunch.com/2023/06/28/tusimple-may-sell-us-business-as-it-turns-attention-to-asia/

¹⁸ https://www.wsj.com/business/tusimple-winds-down-u-s-operations-as-it-looks-for-buyer-11aa5714

¹⁹ https://techcrunch.com/2023/12/05/another-blow-for-self-driving-trucks-as-former-industry-leader-abandons-the-u-s/

²⁰ https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823593/000162828023037959/tsp-20230930.htm

²¹ https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823593/000119312524008909/d673687d8k.htm

²² https://www.sec.gov/Archives/edgar/data/1823593/000119312524027409/d625582d1512g.htm

 

 

Following the February De-Registration, the SEC appears to have contacted TuSimple, about its “going dark” process. Mo Chen and Cheng Lu then caused the Company to file another SEC Form 15-D on April 26, 2024, purporting to withdraw TuSimple’s request to “go dark.”²³

Pursuant to 17 CFR § 240.12g-4(b), once a SEC Form 15-D is withdrawn, an issuer must, within 60 days of the withdrawal, file all the reports due under the securities laws. But the Company has not filed its 2023 SEC Form 10-K or any subsequent quarterly reports since it improperly attempted the February De-Registration. Doing so would have provided public disclosure of what Mo Chen and Cheng Lu wanted to conceal: the movement of money out of TuSimple’s coffers to the Chinese Entities owned personally by Mo Chen and other Company fiduciaries.

On August 30, 2024, TuSimple filed yet another SEC Form 15-D, which purported to withdraw the withdrawal it had previously filed and to retroactively make the February De-Registration effective (the “August De-Registration,” and with the February De-Registration, the “De-Registrations”).²⁴ On information and belief, the SEC’s investigation of the Company’s De-Registrations is ongoing.²⁵

The Delisting and the De-Registrations appear to be part of a scheme hatched by Mo Chen and his syndicate of bad actors to pull the covers over the eyes of the public (including regulators and the Company’s outside minority stockholders) while the Company is pilfered through the Asset Transfer.

---

²³ https://www.sec.gov/Archives/edgar/data/1823593/000119312524118238/d823263d1512ga.htm

²⁴ https://www.sec.gov/Archives/edgar/data/1823593/000119312524210303/d80982d1512ga.htm

²⁵ In the September 18, 2024, press conference, Cheng Lu suggests that an SEC investigation has been opened into the Company’s Delisting and De-Registrations:

 

As for the second question, why it was submitted, withdrawn, and submitted again, it’s really hard for us to disclose. All I can say is that we’ve been in constant communication with the SEC during this time. Now, we are following the advice of lawyers on what we can do, so the final result is that we remain in this situation of delisting. … I can only say that we communicated with the SEC, but the result of the communication is that in August, we filed another Amendment stating that the February filing is effective. So we believe that the February filing was effective from legal perspective, and from that point, we’ve been deregistered.

 

 

e.

Mo Chen and His Cronies Contrive a Narrative That the Company’s Business is Changing to Explain the Asset Transfer.

According to the Company’s website, the Company is still an autonomous trucking business. The “Corporate Overview” on the Company’s homepage states²⁶:

TuSimple was founded in San Diego in 2015 with a mission to improve the safety and efficiency of the trucking industry through world class autonomous driving technology. Our global team has developed the world’s most advanced autonomous driving system specifically designed to meet the unique demands of heavy-duty trucks and established the industry’s best long-range perception system capable of locating and identifying objects up to 1,000 meters away. In July of 2020 TuSimple launched the world’s first Autonomous Freight Network (AFN), a nationwide transportation network allowing freight to be moved throughout the country using L4 autonomous trucks. Through TuSimple’s groundbreaking Autonomous Freight Network, we are addressing the truck freight industry’s most pressing challenges by enabling reliable, low-cost freight capacity as a service while setting a new standard for safety and fuel efficiency.

TuSimple’s Code of Conduct, also available on the Company’s website,²⁷ states that “TuSimple’s mission is to improve the safety, efficiency and environmental impact of the trucking industry.”

Similarly, in the Company’s most recent SEC Form 10-Q filing (for the period ending September 30, 2023) before starting the process of “going dark,” the Company describes its business as “working to revolutionize the global truck freight market by developing proprietary technologies that enable the scaled development and deployment of autonomous freight transportation.”²⁸

But the over the past year, it has become increasingly evident that these public statements are lies and that TuSimple has shuttered its autonomous trucking not only in the U.S., but everywhere, including China. In Q2 2024, TuSimple told its tech employees in China that the long-term prospects of autonomous trucking were bleak, and a mass exodus of engineers ensued. TuSimple China closed its Shanghai testing facility, fired all of its testing drivers, and the majority of employees focused on autonomous technology have departed. The total number of TuSimple China employees has fallen from 700 to less than 200; a number which continues to diminish. TuSimple China no longer has any autonomous trucking development or testing capabilities.

---

²⁶ https://ir.tusimple.com/overview/default.aspx

²⁷ https://ir.tusimple.com/governance/governance-documents/default.aspx

²⁸ https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823593/000162828023037959/tsp-20230930.htm

 

 

Despite outwardly maintaining that TuSimple is an autonomous trucking business, it has become apparent in recent months that the Company is purporting to transform into an AIGC business (the “Business Transformation”). The Business Transformation was concealed from the public, and from all but a select few unknown stockholders, for months while Mo Chen and other Company fiduciaries organized the framework to effectuate the Asset Transfer to the Chinese Entities.

That process appears to involve redeploying employees and resources to Mo Chen’s and other Company fiduciaries’ AIGC enterprises. In connection with this Business Transformation, the Company’s recent job postings reveal that the focus has changed, and it is now seeking publishers, streamers, video editors, film directors, and screenwriters.²⁹ TuSimple has made no announcements or disclosures outlining this move, and the June 2024 sworn declaration submitted by Cheng Lu, misrepresented these facts to a federal court.³⁰

Notwithstanding the efforts by Mo Chen, the Board, and certain Company officers to conceal the Business Transformation, news of it was apparently leaked, which prompted the July 30, 2024, Concerned Stockholders Letter. The Concerned Stockholders Letter describes the purported business of the Chinese Entities and articulates concerns, shared by the Stockholders, about the devious intent of the Company fiduciaries who own the Chinese Entities:

These [Chinese Entities] are established with the apparent business purpose of producing video games and animation, an area far from TuSimple’s main focus—developing autonomous driving technology.

Based upon information obtained, the undisclosed creation of these two “BearBear” companies is not a result of a legitimate business decision to explore new opportunities. Rather, we suspect it is an attempt to use TuSimple’s company resources for the personal benefit of Mo Chen, who is believed to be operating and controlling, directly and indirectly, multiple Chinese companies that focus on producing video games and animation.

As the Concerned Stockholders Letter notes, “[i]n every public filing by TuSimple (up to the date of this letter), Cheng Lu has made no announcement that TuSimple is changing its business direction to video game and animation production.”³¹ It was not until August 14, 2024, that the Company issued a press release presenting itself as “a global artificial intelligence technology company” and announcing that it has entered into “a partnership with Shanghai Three Body Animation Co., to develop an animated feature film and video game based on the internationally acclaimed science fiction novel series, ‘The Three-Body Problem,’ by Liu Cixin.”³²

---

²⁹ Concerned Stockholders Letter, at 9.

³⁰ Concerned Stockholders Letter, at 7-8.

³¹ Concerned Stockholders Letter, at 7.

³² https://ir.tusimple.com/press-releases/news-details/2024/TuSimple-Expands-into-Generative-AI-for-Animation-and-Video-Games-with-The-Three-Body-Problem-Partnership/default.aspx

 

 

For most of the Company’s outside minority stockholders, and for the public at large, that announcement came out of nowhere. At all times before then, including in the Company’s most recent prior press release (from May 29, 2024), TuSimple was “a global autonomous driving technology company” that developed technologies specifically for autonomous trucking.³³ It had never previously been an “artificial intelligence technology company” that produced animated films and video games. The Company’s purported deregistration is convenient, as now the Company presumably believes it does not need to publicly disclose material transactions with insiders.

Media quickly picked up on the story and was critical of the transparent misappropriation scheme. TechCrunch reported:³⁴

TuSimple, once a buzzy startup considered a leader in self-driving trucks, is trying to move its assets to China to fund a new AI-generated animation and video game business. The pivot has not only puzzled and enraged several shareholders, but also threatens to pull the company back into a legal morass …

Now, a fight is brewing over roughly $450 million in funds, the bulk of which remains in the United States … And arguments over the company’s mission lie at the center of it.

Before the company formally disclosed its new business segment in August, a group of shareholders who got wind of the change sent a letter to the company’s board of directors. The letter, … alleges “potentially fraudulent activities” and asks the board to investigate whether funds were being misappropriated “to facilitate the growth of private ventures” established by Mo Chen, TuSimple’s co-founder and chairman. …

The international wrestling match over TuSimple’s assets comes as foreign direct investment into China has seen 12-month lows, and Chinese VCs with U.S. money have left the country amid geopolitical tensions. Chinese firms are looking for creative ways to attract outside capital. 

---

³³ https://ir.tusimple.com/press-releases/news-details/2024/TuSimple-Reaches-Settlement-Agreement-With-the-Committee-on-Foreign-Investment-in-the-United-States-2024-CHs5DHhMQR/default.aspx

³⁴ https://techcrunch.com/2024/09/13/a-fight-is-brewing-as-tusimple-tries-to-move-450m-to-china-and-pivot-from-self-driving-trucks-to-ai-animation/

 

 

In the September 18, 2024, press conference held in response to the Concerned Stockholders Letter, Cheng Lu mentioned that the Board’s supposed consideration of the Business Transformation dated back to March 2024, and that certain undisclosed stockholders were privy to those deliberations, while most outside minority stockholders were excluded:

In March, we started communicating with shareholders and the Board. The shareholders and the Board agreed that we should first explore whether this industry is worth entering. We also have meeting minutes from the Board regarding this matter. From March to August, well, in August, after several months of exploration—including both technical and business opportunities—the Board officially agreed in August for us to enter this industry. One major project was our collaboration with The Three-Body Problem as previously announced.

Mo Chen then explained that the Company has “revenue forecasting logic” for the change to AIGC. Supposedly, TuSimple “could have positive cash flow by 2027,” possibly even “by 2026,” as an AIGC company. Cheng Lu promised that TuSimple “will gradually disclose these budgets, and [] may share them with the market and investors,” and that the Company will “be sharing some future budgets soon.” No such information has been disclosed to date.

Also during the press conference, Mo Chen shed light on what the Company has been doing with its autonomous trucking assets while the Business Transformation was purportedly being considered:

For the company, the business model has shifted to, “OK, we will license our patents out.” … Now, we’ve shifted to helping others commercialize their autonomous driving operations. We license our technology to other companies and sell our data to them. This is happening now in both China and the U.S., and we are currently in discussions with clients. …

We’re no longer willing to invest more manpower into this. Instead, we’ll focus on selling our licenses and patent authorizations. We have many foundational patents, so others can’t bypass them, and we’ll just sell those.

Of course, the Company’s stockholders have never previously been notified of, much less allowed the opportunity to consider or vote on, these uses of the Company’s core assets—an obvious contravention of 8 Del. C. § 271 (requiring that any “s[ale], lease or exchange all or substantially all of its property and assets” must be “authorized by a resolution adopted by the holders of a majority of the outstanding stock of the corporation entitled to vote thereon”).

Mo Chen also revealed that the Company has “negotiated two deals so far” for licensing of its data and algorithms, “both in the tens of millions of dollars range.” When asked whether “these deals [are] with U.S. companies?” Mo Chen responded: “Uh, there are also deals with domestic companies, but basically (inaudible).” Mo Chen’s cagey reaction and non-answer to the question about which entities TuSimple is paying “tens of millions of dollars” begs questions, including: Who is TuSimple licensing its assets to? How are those assets being valued? Where is the revenue generated from those licensing arrangements going?

Company stockholders have been kept in the dark—by the designs of Mo Chen and his co-conspirators—but from the trickle of details that have emerged, the picture is becoming clear. MoChen and other Company fiduciaries appear to be exploiting TuSimple’s assets, including in self-interested transactions, and transferring the Company’s wealth to themselves. And they are orchestrating these illicit transactions without allowing stockholders to voice their opinions (or exit their investments easily since the De-Registrations) on whether and how the Company should conduct the money-wasting exploration of the Business Transformation and the liquidation of all or substantially all of the Company’s autonomous trucking assets.

The deliberate subversion of reporting and disclosure obligations also appears to be designed to obfuscate Mo Chen’s direct competition, in clear breach of his fiduciary duties, with the purported new AIGC direction of the Company. In addition to Mo Chen’s ties to “Deep Blue Brothers, an online gaming platform” that Mo Chen founded,³⁵ he is also working to produce an animated movie called “The Smiling, Proud Wanderer” (a movie based on a fantasy martial arts novel), through Chinese Entity Beijing Shui Mo Xia Dao Cultural Communication Co., Ltd.³⁶ By funneling assets to the Chinese Entities, TuSimple appears to be spending resources on specific filmmaking projects in which Mo Chen is personally interested—an apparent violation of the terms of the Mo Chen Cooperation Agreement, in addition to a blatant breach of fiduciary duties.

The intellectual property license for the movie “The Smiling, Proud Wanderer” does not appear to have ever been presented to the Board. Rather, following criticism in the Concerned Stockholders Letter of the evident competition and/or usurpation of a corporate opportunity by Mo Chen, it was revealed during the September 18, 2024, press conference that TuSimple’s supposedly “independent committee is evaluating this matter.” No further details were provided, no formal disclosures have been made, and it remains to be seen whether the Board is even capable of forming an “independent committee” on this matter.

Through this Demand, the Stockholders intend to uncover more of the truth about all of these matters, including whether a Board and stockholder votes were (or are) required to approve the Asset Transfer.

---

³⁵ https://ir.tusimple.com/governance/board-of-directors/default.aspx

³⁶ Concerned Stockholders Letter, at 10.

 

 

2.

The Books and Records Requested

The Stockholders hereby seek, pursuant to Section 220 of the DGCL, to inspect all documents within the following categories of books and records for the period of October 1, 2023, through the date of the Company’s production of materials in response to this Demand (unless another period is specified in a specific request):

Urgent Requests:³⁷

1)

Documents sufficient to understand the rate at which the Company’s remaining cash (believed to be approximately $450 million) is being depleted and the purposes for which that cash is being used.

2)

Documents referenced by or evidencing the statements made by Company representatives during the September 18, 2024, press conference that:

a.

“In March, we started communicating with shareholders and the Board. The shareholders and the Board agreed that we should first explore whether this [AIGC] industry is worth entering. We also have meeting minutes from the Board regarding this matter.”

b.

“We definitely have our own revenue forecasting logic [for entering AIGC industries]. … If we’re lucky, we could have positive cash flow by 2027. If we’re even luckier, it could happen by 2026.”

c.

“[T]ransferring money to China … is just part of the company’s regular operations.”

d.

“[W]hether our company’s money is in Chinese accounts, Hong Kong accounts, Japanese accounts, U.S. accounts, or European accounts, it’s still our company’s business.”

e.

“[O]n paper, [BearBear Factory Culture Co., Ltd] appears to be owned by Hao, Jianan and Li, Haiquan, but in reality, it is a subsidiary controlled by TuSimple Group through the VIE structure.”

---

³⁷ The Stockholders demand prompt responses to these urgent requests, by no later than November 22, 2024, because TuSimple’s responses may implicate irreparable harm facing the Company which requires immediate intervention by the Stockholders. In the interest of facilitating prompt responses, the Stockholders are willing to discuss with TuSimple whether express written representations by the Company may satisfy these requests in whole or in part.

 

 

f.

“We license our technology to other companies and sell our data to them. This is happening now in both China and the U.S., and we are currently in discussions with clients. … [W]e’ll focus on selling our licenses and patent authorizations.”

g.

“We’ve negotiated two deals so far, both in the tens of millions of dollars range.”

h.

“All I can say is that we’ve been in constant communication with the SEC [about the De-Registrations] during this time.”

Standard Requests:³⁸

1)

All Board or committee meeting minutes (including attachments), presentations, agendas, reports, or other materials in connection with any meeting where discussion occurred concerning the (a) Business Transformation, (b) Asset Transfer, (c) Chinese Entities, (d) Mo Chen Cooperation Agreement, (e) Delisting, and (f) De-Registrations. This request includes any legal opinions obtained, including under 8 Del. C. § 271.

2)

Documents and communications exchanged between or among Board members and/or Company officers concerning the (a) Business Transformation, (b) Asset Transfer, (c) Chinese Entities, (d) Mo Chen Cooperation Agreement, (e) Delisting, and (f) De-Registrations.

3)

Documents and communications exchanged between any Board member or Company officer, on the one hand, and any outside stockholder of the Company, on the other hand, concerning the (a) Business Transformation, (b) Asset Transfer, (c) Chinese Entities, (d) Mo Chen Cooperation Agreement, (e) Delisting, and (f) De-Registrations.

4)

Documents and communications sufficient to show the Company’s business structure, including all direct and indirect subsidiaries.

5)

Documents and communications sufficient to show the owners and managers of the Chinese Entities.

6)

Documents and communications showing the Company’s plans concerning the intended use of the Company’s remaining cash, including for purposes unrelated to autonomous trucking technology.

---

³⁸ The Stockholders demand responses to these requests on a reasonable timeline to facilitate the Stockholders’ receipt of the requested materials by no later than 21 days before the Company’s 2024 annual meeting of stockholders. The Stockholders are willing to meet and confer with the Company on a reasonable search protocol and schedule for a rolling document productions.

 

 

7)

The Company’s financial statements, including its balance sheets, income statements, cash flow statements, statement of operations, and any ledger demonstrating the use of the Company’s cash or cash burn rate, as well as any reports or summaries of the Company’s finances that were provided to the Board or any committee thereof.

8)

Documents and communications concerning the Board’s decision to enter AIGC industries, including the revenue analysis, budgets and/or forecasts referenced by Mo Chen and Cheng Lu during the September 18, 2024, press conference, or any other industry unrelated to self-driving trucks.

9)

Documents and communications concerning the Company’s decision to discontinue research, development, and testing related to autonomous trucking in the U.S. and/or China.

10)

Documents and communications sufficient to show the status of the Company’s operations in China, including the development, production and/or testing of autonomous vehicles, if any.

11)

Documents and communications sufficient to show the number of current employees, their locations, and their intended functions within the Company.

12)

Documents and communications sufficient to show the Company’s current valuation, including any valuations of the Company that were prepared for or presented to the Board, any committee thereof, or the Company’s officers.

13)

Documents and communications concerning any SEC investigation or inquiry into the Delisting or De-Registration.

14)

For the period of November 1, 2022, through the date of the Company’s production of materials in response to this Demand, documents and communications concerning Mo Chen’s use of the Mo Chen Proxy and Voting Agreement to effectuate the Business Transformation or Asset Transfer, or to appoint directors or retain his position on the Board.

15)

For the period of November 1, 2022, through the date of the Company’s production of materials in response to this Demand, documents and communications concerning the Cheng Lu Windfall Agreement.

16)

Documents and communications regarding Shanghai Three Body Animation, including any documents and communications regarding any affiliation between Mo Chen and Shanghai Three Body Animation.

 

17)

Documents and communications concerning any actual or potential competition between TuSimple and any entity owned or controlled by Mo Chen in AIGC industries, or concerning any actual or potential usurpation of a corporate opportunity by Mo Chen or an entity he controls for TuSimple to participate in an AIGC project.

18)

Documents and communications referring or relating to the independence of the members of the Board, including any director questionnaires or other documents showing any personal, social, familial, financial, or business relationships between or among any current director or officer of the Company, as well as documents showing any and all direct or indirect interests held by any Board member in the Chinese Entities or any companies in AIGC industries.

19)

Documents or communications produced to any other Company stockholder in response to a Section 220 demand concerning the matters addressed in the Demand.

The Stockholders are willing to negotiate a reasonable confidentiality agreement governing the production of documents in response to this Demand.

Accordingly, please advise in writing as soon as possible, and in any event within five (5) business days of this Demand, when the requested materials will be provided or will be made available for examination and copying. If you have not responded within five (5) business days from receipt of this Demand, we will assume that you do not intend to comply with this Demand, and we will proceed accordingly in court.

If the Company contends that this Demand is incomplete or otherwise deficient in any respect, please notify us immediately in writing setting forth the facts that the Company contends support its position and specifying any additional information believed to be required. In the absence of such prompt notice, we will assume that the Company agrees that this Demand complies in all respects with the requirements of Section 220 and that the Company will immediately begin to produce to the Stockholders all demanded books and records for examination and copying.

This Demand shall not be deemed a waiver of any kind by the Stockholders or any other person or entity, and each expressly reserves the right to pursue, at any time, any and all rights and remedies in connection with the matters described herein or relating hereto.

In connection with the prospect of litigation involving the matters discussed herein, the Stockholders hereby notify the Company, each member of the Board, and the Company’s officers to retain and not delete or otherwise dispose of any and all documents, communications, data, or information that they currently have or that they come to obtain in their possession, custody, or control that relate in any way to the matters discussed herein.

Very truly yours,

McDermott Will & Emery LLP

/s/ Ashley Robert Altschuler

Ashley Robert Altschuler

Enclosures

 

Exhibit 99.3

 

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

WHITE MARBLE LLC a limited liability company organized in Delaware and beneficially owned by Dr. Xiaodi Hou, and WHITE MARBLE INTERNATIONAL LIMITED, a company incorporated in Samoa and beneficially owned by Dr. Xiaodi Hou, Plaintiffs, v.   MO CHEN and TUSIMPLE HOLDINGS, INC.,   Defendants.

) ) ) ) ) ) ) ) ) ) ) )C.A. No. 2024-____-____ ) ) ) ) )

 

VERIFIED COMPLAINT

Plaintiffs White Marble LLC and White Marble International Limited (together referred to as “White Marble Entities”), both of which are beneficially owned by Dr. Xiaodi Hou (“Dr. Hou”), by and through their undersigned attorneys, bring this Verified Complaint against defendants Mo Chen and TuSimple, Inc. (“TuSimple” or the “Company”), and, in support, allege as follows:

NATURE OF THE ACTION

1.This is an action for a declaratory judgment that a voting agreement expired on November 9, 2024, and thus Defendant Mo Chen no longer controls TuSimple, meaning shareholders’ votes are meaningful again.

2.Dr. Xiaodi Hou is TuSimple’s co-founder and the technology genius behind its autonomous driving technology.

3.Dr. Hou is TuSimple’s largest beneficial shareholder, holding 29.7% of the Total Voting Power according to the Company’s recently published annual meeting proxy materials (hereafter referred to as “Dr. Hou’s Voting Rights”). Dr. Hou has not served as a director since 2023, when he resigned, nor as an employee since 2022. As an outside shareholder, he should have the most significant personal total voting power.

4.However, his co-founder Mo Chen claims to control Dr. Hou’s shares due to a 2022 Voting Agreement, and thus Mo Chen claims to control 57% of the total voting interest—and the unilateral ability to decide shareholder matters. Mo Chen claims he should be entitled to use Dr. Hou’s Voting Rights in perpetuity and should continue to have the majority control (57% of the Company).

5.Dr. Hou maintains that Mo Chen lost his right to vote Dr. Hou’s shares on November 9, 2024, because it was part of a two-year agreement. Therefore, after November 9, 2024, Mo Chen’s total voting power reduces to 28.2% (57.9% minus Dr. Hou’s 29.7%).

6.The Company’s recently issued proxy materials for the Dec. 20, 2024, annual meeting publicly and falsely state that Mo Chen retains Dr. Hou’s Voting Rights. Indeed, the solicitation materials intentionally omit the expiration of Mo Chen’s control in Dr. Hou’s Voting Rights, rendering the solicitation materials deceptive.

7.Further, Mo Chen’s recently filed SEC Form 13D also publicly and falsely claims that Mo Chen controls 57% of the vote, further misleading shareholders.

8.Immediate action is needed by the Court because Defendants Mo Chen and TuSimple have scheduled an annual shareholder meeting for December 20, 2024, to elect Mo Chen’s handpicked Board of Directors (the “Board”) and to institute important structural changes to ensure continuing control by Mo Chen. Those structural changes include turning TuSimple’s Board into a classified board with staggered elections, and other steps as detailed below—all of which serve to entrench Mo Chen’s control over the Company.

9.Plaintiff seeks a declaration from the Court that the shares covered by the voting agreement reverted to Dr. Hou on November 9, 2024, and that Mo Chen may not vote using Dr. Hou’s Voting Rights.

10.Mo Chen’s vision for the Company is fundamentally averse to the best interest of the majority of TuSimple’s stockholders, who will not have a voice if Mo Chen is permitted to wield the majority voting control he possesses with Dr. Hou’s Voting Rights. For this reason, the importance of the vote to the Company cannot be overstated.

11.Plaintiff also seeks an injunction to postpone the upcoming vote, pending the Court’s resolution of who has the right to vote the contested shares. Irreparable harm will result if the vote proceeds without resolution of the issue, which will be outcome dispositive on the matters up for the vote.

PARTIES

12.White Marble LLC is a limited liability company organized in Delaware and beneficially owned by Dr. Hou. White Marble LLC presently holds 10,567,321 shares of Class A Common Stock. The Company’s proxy materials mistakenly states that White Marble LLC holds 13,367,314 shares of Class A Common Stock, however White Marble transferred the difference to trusts for which Dr. Hou is the trustee, and thus they remain beneficially controlled by Dr. Hou.

13.White Marble International Limited is a company incorporated in Samoa and beneficially owned by Dr. Hou. It holds 12,000,000 shares of Class B Common Stock.

14.Dr. Xiaodi Hou is the co-founder and was the CTO of TuSimple. Dr. Hou did not have any leadership role within the Company since March 2023. He, through the White Marble Entities, together own shares that amount to approximately 29% of the of the voting power within TuSimple.

15.Defendant Mo Chen is the other co-founder and former chairman of the Board at TuSimple. Mo Chen stepped down from his position upon investigations into alleged self-dealings by Mo Chen between TuSimple and his personal companies in China. Mo Chen owns shares that amount to approximately 28% of the voting power within TuSimple.

16.TuSimple is a Delaware corporation founded in 2015 by Dr. Hou and Mo Chen to develop software and hardware for self-driving long-haul trucks. Originally, TuSimple aspired to create an autonomous freight network that would make commercial trucking safer and more efficient.

FACTUAL ALLEGATIONS

A.

TuSimple Was Founded to Develop Fully Autonomous Semi-Trucks

17.On March 23, 2021, the Company introduced itself to the U.S. investing public in its pre-IPO registration statement as having “developed industry-leading autonomous technology specifically designed for semi-trucks, which has enabled TuSimple to build the world’s first Autonomous Freight Network,” and explained that it is “focused specifically on the truck freight market, which is a large and essential industry that moves approximately 80% of the freight in the United States by revenue.”¹

18.The Company held its IPO in April 2021, raising more than $1 billion from U.S. investors based on TuSimple’s representations that it is autonomous trucking company with technology that is “specifically” applicable to that industry.

---

¹ https://www.sec.gov/Archives/edgar/data/1823593/000119312521091150/d909743ds1.htm

19.In TuSimple’s October 31, 2022, letter to stockholders, it claimed that the Company completed its first fully autonomous operation of semi-trucks on public roads in December 2021, and that it was on track for full-scale deployment of autonomous vehicles based on its “industry-leading commercial vehicle AV patent portfolio” that is “focused on technology designed specifically for autonomous trucking” and “include[s] protections for essential autonomous trucking technologies.”²

B.

TuSimple Removes Dr. Hou “Without Cause”

20.In late 2021, the Committee on Foreign Investment in the United States (“CFIUS”) investigated suspected self-dealings between TuSimple, which was led by Mo Chen (Chairman of TuSimple at the time), and Hydron (a Chinese company founded, and majority owned, by Mo Chen).

21.Hydron was backed by SINA Corp., a Chinese media company with ties to the Chinese government that had traded publicly on the Nasdaq exchange until it went private in September 2020, amid rising geopolitical tensions between China and the United States.

22.SINA, as a major shareholder of TuSimple, had to enter into a National Security Agreement to prevent any additional improper influences of U.S. entities, as well as to address the concerns relating to the self-dealings.

23.Under pressure, Mo Chen agreed to “step down” in June 2022.

24.In the midst of this scandal, Dr. Hou briefly took over the role as TuSimple’s CEO from March 2022 to November 2022.

25.A few months after Mo Chen stepped down, the Board informed Dr. Hou that they had decided to terminate Dr. Hou as well. This was a surprise to Dr. Hou as he did not believe that he had engaged in any wrongful conduct relating to Mo Chen’s suspected self-dealings.

26.On October 30, 2022, the Board removed Dr. Hou as TuSimple’s CEO, CTO, and President.

---

² https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823593/000162828022027421/tsp-20221031.htm

27.The Company’s 8-K, filed the next day, on October 31, 2022, stated that the termination was “without cause.”

C.

The Origin of the Two-Year Proxy Agreement

(a)

Discussions between Dr. Hou and Mo Chen (November 1, 2022-November 8, 2022)

28.Upon Dr. Hou’s removal, Mo Chen and Dr. Hou were concerned that the majority of the current Board was engaged in a power grab that was not in the best interests of the Company.

29.During the next few days, Mo Chen and Dr. Hou (through an agent) discussed the potential of combining their voting powers to replace the board members other than Dr. Hou, reinstate Mo Chen, and to reinstate Dr. Hou as Chief Technical Officer after an internal investigation about the Hydron allegations, since Mo Chen and Dr. Hou believed that Dr. Hou’s involvement was important for TuSimple to continue developing its autonomous driving technology.

30.Dr. Hou and Mo Chen together controlled approximately 57% of the total voting power, with Dr. Hou controlling 29%, and Mo Chen controlling 28%.

31.On or around November 7-8, 2022, Mo Chen, his lawyers at Gunderson Dettmer, and a representative from SINA told Dr. Hou that they needed all the votes in one person’s name for legal reasons to get certain benefits as a controlled entity. They said it had to be in Mo Chen’s name instead of Dr. Hou’s name for those benefits to occur, and that the arrangement would be for only two years. They also said that Dr. Hou would return as Chief Technology Officer after the internal investigation into the Hydron allegations.

32.As a result, as part of those communications on November 7¬8, 2022, Mo Chen and Dr. Hou agreed to enter into a limited voting agreement, with the following key conditions:

a.

Dr. Hou will not return as the CEO, but will return to the Company as his original role of Chief Technology Officer after the Hydron internal investigation.

b.

Dr. Hou will give his voting power, amounting to 29.7% of the total voting shares, to Mo Chen for two years.

33.Concurrently, Mo Chen’s counsel would draft a proposed set of documents consisting of an irrevocable proxy, a voting agreement, and a shareholder consent.

34.Mo Chen’s lawyers had a Zoom call with Dr. Hou’s lawyers on the evening of November 8, 2022.

D.

Undue Influence and Coercive Conduct by Mo Chen’s Counsel and Representative on November 9, 2022

35.However, the next morning, at approximately 10:00 a.m. PT on November 9, 2022, without any prior notice or scheduling, and without consent of Dr. Hou’s counsel, one of Mo Chen’s lawyers, Alice Lu from Gunderson, and Cheng Lu, Mo Chen’s personal representative who also was the person that Mo Chen and Dr. Hou agreed would become CEO, appeared at Dr. Hou’s house, demanding that Dr. Hou immediately sign a stack of documents, including the (1) Proxy Agreement, (2) the Voting Agreement, and (3) the Board Resolution to reinstate Mo Chen as the Chair of the Board and Cheng Lu as the CEO of the Company, and remove the existing board members other than Dr. Hou.³

36.This was completely unexpected by Dr. Hou. Cheng Lu and Alice Lu knew that Dr. Hou was represented in his discussions regarding the voting agreement by attorneys who were not present, and who were not informed that this would occur.

---

³ https://www.sec.gov/ix?doc=/Archives/edgar/data/0001823593/000119312522282814/d387238d8k.htm

37.Dr. Hou tried to reach his counsel several times without avail.

38.During the 1-2 hour meeting, Cheng Lu repeatedly asserted that time was “running out” and pressed Dr. Hou for immediate signing without consulting with counsel, claiming the Company was “about to go out of control.”

39.Dr. Hou requested on multiple occasions that they delay the signing until his counsel reviews the documents. Cheng Lu denied those requests, and instead, stood within three feet of Dr. Hou and requested immediate signing. During that visit, Cheng Lu and Dr. Hou also discussed the specifics of how they would be working together when Cheng Lu becomes CEO and Dr. Hou returns as CTO.

40.After a brief review of the documents under pressure, Dr. Hou and his wife discovered that the following two critical elements agreed to by Dr. Hou and Mo Chen in the prior negotiations were missing from the documents: (a) the agreed-upon two-year expiration of the voting arrangement was not included; and (b) there was no mention about Dr. Hou returning as the Company’s CTO. In summary, the irrevocable proxy had the two year term, but the voting agreement did not.

E.

The Video

41.When Dr. Hou stated that the written documents did not reflect what was previously discussed, Alice Lu and Cheng Lu consulted with one or more people by phone. Alice Lu and Cheng Lu said that there was no time to make direct changes to the documents because they had to act that day, and Mo Chen had signed the documents already in China, and that the versions they had were from Mo Chen (meaning they had been signed at least a day earlier).

42.Attorney Alice Lu then instructed Dr. Hou to record a video (the “Video”) of the documents in Cheng Lu’s presence, assuring Dr. Hou that the Video would be legally enforceable and would align everyone’s understandings.

43.Both Alice Lu and Dr. Hou’s wife Amanda Song recorded the Video simultaneously. That Video shows agreements by Dr. Hou and Cheng Lu (Mo Chen’s authorized representative, who was on the video) and Alice Chu (Mo Chen’s counsel, by her presence). A true and correct copy of Amanda Song’s recording the Video may be accessed here:

https://drive.google.eom/file/d/1mo2SPHhRLa1m41mh-O0xbkqB-ol4XXR4/view?usp=sharing.

44.The Video addressed two specific points: (1) the proxy arrangement would expire in two years; (2) the Board Resolution would be revised to guarantee Dr. Hou’s return to TuSimple.

45.The transcript of the recorded audio reads:

Xiaodi Hou: So for, uh, today’s date is November the ninth, 2022. And, uh, I have signed an irrevocable proxy and power of attorney and according to my understanding, this irrevocable proxy and power of attorney’s duration is for two years, which means that it will expire on November the ninth, 2024. That’s my understanding, Cheng, is that your understanding as well?

Cheng Lu: It is. I concur. Okay.

Xiaodi Hou: And the second matter is that the action by unanimous written consent of the board of directors of TuSimple Holding Inc. Uh, we would like to amend this board resolution by adding another clause of appointing me Xiaodi Hou, as the CTO of the company, uh, condition on the completion of the internal investigation. Is that your.

Cheng Lu: Yes. I concur.

Xiaodi Hou : Okay. Thank you.

46.After recording the Video, Dr. Hou signed the documents, with Alice Lu emphasizing the importance of the Proxy Agreement, which was signed first.

47.Notably, while Alice Lu signed as a witness on the Proxy Agreement, the Voting Agreement had no witness block—and no witness signed the Voting Agreement.

48.Cheng Lu and Alice Chu did not provide a signed copy of the documents to Dr. Hou that day. Instead, they took all the documents and left immediately upon obtaining Dr. Hou’s signature.

F.

Mo Chen’s Lawyer and Agent Fail to Implement The Video: They Change Only the Proxy And Not Change the Unanimous Written Consent of the Board of Directors

49.A few days later, when Dr. Hou received the copies of the signed documents he realized that the first three pages of the Proxy Agreement had (consistently with the Video) been regenerated as PDFs with modified text to reflect the two-year duration, while only the signature pages were scanned from the original. A true and correct copy of the Proxy Agreement is attached hereto as Exhibit 1.

50.The Voting Agreement, on the other hand, was a 100% scanned version of the original file without the two-year duration modification. A true and correct copy of the Voting Agreement is attached hereto as Exhibit 2.

51.Further, the Proxy Agreement contained a printed witness block, which was signed by Alice Lu. The Voting Agreement did not have a witness block. Moreover, Mo Chen’s signatures and Richard Chang’s signatures appeared on the documents. Richard Chang had a handwritten note of “witness,” although that was not true because Richard Chang was not present at Dr. Hou’s home when Dr. Hou signed the documents.

52.At the time, Dr. Hou was not concerned with the fact that the Voting Agreement did not reference the two-year duration because he understood that the Voting Agreement and Proxy Agreement together constituted their understanding, and that they must be construed together with a two-year duration expressly provided for in the Proxy Agreement, because Cheng Lu and Alice Chu expressly represented such to Dr. Hou at the time he signed at his house. This was the most natural interpretation of the documents in light of the surrounding circumstances and the provisions themselves. For example, the Proxy Agreement explicitly precludes any separate voting arrangements:

a)

It forbids either party from “enter[ing] into a voting agreement or other similar understanding or arrangement with respect to the Subject Shares.”

b)

It mandates that “neither Principal Party shall on its own exercise or waive any right or privilege as mentioned herein.”

53.Additional contemporaneous evidence of unity:

a)

The agreements were presented and signed together as part of the same transaction at the same time.

b)

The Voting Agreement had no witness block, unlike the Proxy Agreement, suggesting it was not meant to stand alone.

c)

The agreements were presented together to Dr. Hou as a single transaction.

d)

The pressure tactics used by Cheng Lu and Alice Lu suggest an attempt to obscure the contradictory nature of the documents.

54.Dr. Hou’s understanding that the two documents comprised one agreement governing use of his votes is confirmed by Mo Chen’s own contemporaneous understanding, as evidenced by his own SEC Filings. On November 15, 2022—just a few days after Dr. Hou signed the documents at his house and before any dispute had arisen about the arrangement— Mo Chen filed his Form 13D representing to the SEC and the public that the documents were a single “Proxy Voting Arrangement” with a duration of at most two years:

Pursuant to the Voting Agreement and the Irrevocable Proxy, the White Marble Entities agreed to vote all shares of common stock of the Issuer they beneficially own and may from time to time acquire beneficial ownership over (the “Subject Shares”) as directed by Mr. Chen and irrevocably authorized Mr. Chen to exercise the voting rights represented by the Subject Shares (the “Proxy Voting Arrangement”). The Proxy Voting Arrangement will remain in full force and effect until the earlier to occur of (i) the two year anniversary of the date of the Irrevocable Proxy and (ii) mutual agreement in writing to terminate the Irrevocable Proxy and the Voting Agreement. (Emphasis added.)

The filing explicitly acknowledged the two-year expiration for both agreements.

55.This contemporaneous SEC filing represents Mo Chen’s own understanding and admission of the unified nature of the arrangement.

56.Contrary to the Video, Mo Chen, his attorney, and agent did not amend the Board Resolution to reinstall Dr. Hou as CTO after the internal investigation.

57.Dr. Hou was not provided with a copy of the Board Resolution when he received copies of the Proxy Agreement and Voting Agreement. However, Dr. Hou was told by employees at TuSimple that Cheng Lu, now the new CEO, was telling employees in the U.S. that Dr. Hou would be back as CTO. So, Dr. Hou did not suspect at the time that anything was amiss.

58.Mo Chen did not reinstate Dr. Hou as agreed after the internal investigation. Mo Chen remained the controller of the Company and could have exercised voting rights to cause it to occur, but he did not.

G.

The Proxy Agreement’s Express Prohibition

59.The Proxy Agreement explicitly precludes any separate voting arrangements.

60.It forbids either party from “enter[ing] into a voting agreement or other similar understanding or arrangement with respect to the Subject Shares.”

61.It mandates that “neither Principal Party shall on its own exercise or waive any right or privilege as mentioned herein.”

62.These provisions make the contemporaneous execution of a separate Voting Agreement inherently contradictory and invalid.

63.The Voting Agreement further provides that its terms must be interpreted in accordance with Delaware law, and that disputes about its terms must be brought in Delaware courts, the jurisdiction of which the Voting Agreement parties submitted:

3.2 Governing Law. This Agreement shall be governed by Delaware law applicable to agreements made and to be fully performed within the State of Delaware. Each party hereby (i) irrevocably submits to the personal jurisdiction of the courts of the State of Delaware to resolve any controversy or claim arising out of or relating to this Agreement, (ii) agrees that any action or proceeding arising under this Agreement shall be brought, tried and determined solely by the courts of the State of Delaware, and (iii) irrevocably waives any and all rights to a jury trial in connection with such action or proceeding.

H.

Mo Chen’s and His Attorney’s Manipulation

64.In assembling information for preparation of this complaint, the jarring extent of the deceit and manipulation by Mo Chen and his counsel stand out.

65.It appears that the first time that Dr. Hou’s counsel were sent a draft of the three documents—the Proxy Agreement, Voting Agreement, and Board Resolution—was at about 2:00 a.m. PT on November 9, 2022 (sent by Mo Chen’s attorney Richard Chang from Gunderson’s office in China). But Mo Chen’s signed versions of those documents were already in flight from China, and they were signed by the same Mr. Chang as a witness. Those documents were brought to Dr. Hou’s home for his counter signature that same morning of November 9, 2022.

66.Mo Chen at the time was in China. The first call between Mo Chen’s lawyers at Gunderson and Dr. Hou’s lawyers appears to have occurred the evening of November 8, 2022, a few hours before the draft documents were sent to Dr. Hou’s counsel.

67.Given the flight time from China to California, it seems that before the first call between Mo Chen’s counsel and Dr. Hou’s counsel, Mo Chen’s lawyer already had Mo Chen sign the documents, which the lawyer then signed as a witness, and arranged for someone to fly the documents to California.

68.In other words, on the same morning that Dr. Hou’s lawyers first saw what they understood were draft documents, Gunderson had already arranged to send one of its lawyers and Cheng Lu to Dr. Hou’s home in California, with execution versions already signed by Mo Chen and the Gunderson lawyer in China. And those agents of Mo Chen insisted Dr. Hou immediately sign the Proxy Agreement and the Voting Agreement.

69.No one from Gunderson appears to have advised Dr. Hou’s attorneys of any of this or the need to act that morning.

70.Dr. Hou’s attorneys had no idea that Gunderson was sending one of its lawyers to Dr. Hou’s home on the morning of November 9, 2022, and never approved it—which is ethically required for direct communication with a represented party, Dr. Hou.

71.And when Dr. Hou and his attorneys finally connected in the early afternoon, the Proxy Agreement and the Voting Agreement had already been signed.

I.

The Two-Year Expiration Applies to the Voting Agreement

72.To summarize the key points from the above allegations:

a.

Original Agreement and Intent: The agreement made on November 7, 2022, with Mo Chen through Mo Chen’s agent contained two clear conditions:

i.

Dr. Xiaodi Hou would return as CTO (not CEO), and

ii.

Voting power would be given to Mo Chen for two years.

b.

This forms the foundational intent of all subsequent documentation.

73.Unified Nature of the Agreements

a.

Simultaneous Execution and Presentation. Both agreements were:

i.

Presented together on November 9, 2022 as part of the same transaction;

ii.

Provided to Dr. Hou by the same parties (Cheng Lu and Alice Lu);

iii.

Signed in the same session under the same circumstances; and

iv.

Part of a single package of documents, including Board resolutions appointing Mo Chen to be the chair of the Board and Cheng Lu to the Board.

74.Document Structure and Formalities

a.

The Proxy Agreement contained a witness block and was witnessed by Mo Chen’s lawyer;

b.

The Voting Agreement lacked a witness block, suggesting it was not meant to stand alone; and

c.

The first three pages of the Proxy Agreement were later regenerated to reflect the two-year duration.

75.Express Terms of the Proxy Agreement

a.

The Proxy Agreement contains provisions that legally preclude a separate voting arrangement:

i.

Explicitly prohibits either party from “entering into a voting agreement or other similar understanding or arrangement;”

ii.

Forbids either party from unilaterally exercising rights mentioned in the agreement; and

iii.

These provisions make a separate, permanent Voting Agreement legally contradictory and invalid

76.Contemporary Evidence of Unified Treatment

a.

Video amendment:

i.

Was recorded immediately after signing;

ii.

Specifically addressed the “proxy arrangement” expiring in two years;

iii.

Was recorded at the instruction of Mo Chen’s own attorney (Alice Lu); and

iv.

Was witnessed and video recorded by multiple parties.

b.

Mo Chen’s Original Form 13D (November 15, 2022)

i.

Critical contemporaneous evidence showing Mo Chen’s own understanding:

1.

Treated both agreements as a single “Proxy Voting Arrangement;”

2.

Explicitly stated the arrangement “will remain in full force and effect until... the two year anniversary;”

3.

Referenced both agreements together in describing the termination conditions; and

4.

Filed by Mo Chen with the SEC as an official representation of the arrangement.

c.

Mo Chen’s September 18, 2024, statements at press conference addressing the allegations in the July stockholder letter, that Dr. Hou provided voting rights for only two years.

d.

References by the Company in other documents that refer to the Proxy Agreement and Voting Agreement collectively, as “proxy and voting agreement.”

i.

For example, in the Cooperation Agreement from Mo Chen:4

ii.

“White Marble LLC (via proxy and voting agreement)*” (with the asterisk denoting a note, set forth below).

iii.

“White Marble International Limited (via proxy and voting agreement)*” (with the asterisk denoting a note, set forth below).

iv.

The note to the above statements states: “*For so long and only so long as it is subject to the proxy and voting agreement dated November 9, 2022.”

77.Circumstances of Execution of Proxy Agreement and Voting Agreement

a.

Supporting evidence of pressure to obscure the unified nature of the Proxy Agreement and Voting Agreement:

i.

Unannounced arrival by Mo Chen’s attorney and non-attorney agent demanding immediate signing.

ii.

Refusal to allow Dr. Hou’s attorneys to review.

iii.

Constant close supervision during document review.

iv.

Rushed approximately 30-minute review of complex legal documents.

v.

Refusal to revise documents despite identified missing terms.

---

⁴ 4 https://www.sec.gov/Archives/edgar/data/1823593/000119312524008909/d673687dex101.htm

vi.

Use of video amendment rather than formal reversion of documentation.

b.

Conclusion: The two-year expiration should apply to both the Proxy Agreement and the Voting Agreement because:

i.

The Proxy Agreement’s express terms make a separate voting arrangement invalid.

ii.

Both agreements were executed as part of a single transaction.

iii.

Contemporaneous evidence, particularly Mo Chen’s own SEC filing, confirms the unified nature and duration of the Proxy Agreement and Voting Agreement.

iv.

The circumstances of execution.

v.

The Video amendment provides contemporaneous evidence of the parties’ understanding of a unified arrangement.

78.Finally, the whole signing process had an overlay of fiduciary duties by Mo Chen and his agents (including a lawyer) to Dr. Hou and the White Marble entities. The irrevocable proxy creates a fiduciary duty of Mo Chen to Dr. Hou’s entities, which applies to agents working for Mo Chen within the scope of that proxy. Thus, there was an inherent overlay of a trusted, fiduciary relationship that Mo Chen owed to Dr. Hou and his entities—that also, at the latest, started formally without question the moment the Proxy Agreement was executed, which occurred before the Voting Agreement was signed.

J.

Mo Chen Abuses His Control and Engages in Significant Wrongdoing That Has Harmed TuSimple and Shareholders

(a)

Building the Dominated Board (End of 2022)

79.Upon signing the Proxy Agreement and the Voting Agreement in November 2022, Mo Chen wielded controlling power over TuSimple through controlling more than 51% of the Company’s voting rights.

80.Mo Chen then systematically started to stack the Board with what turned out to be his cronies (as displayed over time).

81.For example, in December 2022, Mo Chen appointed his close friend James Lu as an “independent director” to the Board. Then two weeks later, he made another appointment of James Lu to the Company’s compensation committee. Lu’s true allegiance became clear when he subsequently admitted that he on the Board to “help Mo Chen out.”

82.As detailed further in a books and records demand that the White Marble Entities recently served on the Company to investigate wide-spread corporate mismanagement (the “B&R Demand”, attached as Exhibit 3), Mo Chen and James Lu then together immediately awarded Cheng Lu with a severance package in the amount of $15 million cash and $6 million stock options, with all taxes to be paid by the Company.⁵ Cheng Lu is the same person who showed up unannounced at Dr. Hou’s home on behalf of Mo Chen. Dr. Hou was not consulted as part of that “compensation” process. When Dr. Hou raised concerns on November 25, 2022 about the package’s excessive nature, Mo Chen dismissed his concerns.

---

⁵ Earlier this week, TuSimple purported to reject the B&R Demand on pretextual and factually inaccurate bases. See Exhibit 4.

(b)

The Unauthorized Pivot to Computer Gaming and Animation and Cover-Up (2024)

83.Under the stewardship of Mo Chen and his hand-picked crony directors, the Company’s market value fell to $50 million despite holding more than $700 million cash in early 2024.

84.Mo Chen and Cheng Lu then delisted TuSimple from NASDAQ and attempted to deregister from the SEC.⁶

85.Mo Chen and Cheng Lu then started to shift the Company’s focus to video gaming and animation, an area in which Mo Chen owned multiple existing Chinese companies which desperately needed funding.

86.Neither Mo Chen nor management sought shareholder approval for abandoning the Company’s core autonomous driving business in favor of gaming and animation. The fact that TuSimple was a controlled entity at the time (i.e., during 2024 before November 9), makes this self-interested pivot all the more egregious. Mo Chen had established personal interests in this sector, with some of his companies suspiciously sharing TuSimple’s physical addresses and contact information. In the September 18, 2024, press conference, Mo Chen admitted that he had utilized TuSimple’s resources to help him register his personal companies (see Ex. 3, at Exhibit C).

---

⁶ It is unclear whether TuSimple is currently a deregistered entity, as Mo Chen caused the Company to file a Form 15D to register on February 8, 2024, and then another Form 15D on April 26, 2024, to withdraw the initial Form 15D, and then a third Form 15D on August 30, 2024, to withdraw the second Form 15D.

87.The deception extended to a derivative action brought in the Southern District of California federal court (Wilhoite v. Hou, No. 3:23-cv-02333-BEN-MSB (S.D. Cal.)) when in June 2024, while TuSimple was actively recruiting for gaming and animation positions, CEO Cheng Lu made declarations in the derivative action asserting the Company remained focused on autonomous driving development. This misrepresentation was used to justify lifting a temporary restraining order by the Southern District of California which restricted asset transfers to China. In fact, TuSimple was so anxious to resolve that TRO that it rushed to seal a record-breaking $189 million settlement, even before the legal discovery process started—overpaying to be able to escape court oversight and start transferring funds to China to fund this pivot, and where U.S. courts and investors would not be able to reclaim it.

88.The Board’s complicity only came to light after an anonymous shareholder letter on July 30, 2024, exposed the secret pivot. Instead of pausing the pivot to investigate adequately or addressing the lack of required shareholder approval or the CEO’s potentially false court declarations, the board attempted to retroactively legitimize the fait accompli by granting post-hoc approval of the gaming/animation pivot, ignoring both their fiduciary duties and Delaware law requirements for fundamental business changes.

(c)

Transaction with Three Body Animation, a Related Party

89.On August 14, 2024, TuSimple announced a partnership with Shanghai Three Body Animation for developing an animated film and video game. Behind this seemingly ordinary business announcement lies a complex web of conflicts, made particularly troubling by Mo Chen’s control of TuSimple and his long-standing relationship with SINA—the very investor Mo Chen introduced to lead TuSimple’s Series A, B, and D fundraising rounds. This same relationship was evident when, it has been subsequently learned, Charles Chao, CEO of SINA, personally approved Cheng Lu’s compensation package in Japan before any board review.

90.The Three Body Animation deal’s foundation rests on SINA hidden control of the Three Body intellectual property through a 60% stock pledge arrangement via Beijing Micro Dream Innovation Venture Investment Center (“Micro Dream”), a company wholly owned by SINA. This creates an alarming situation where SINA effectively sits on both sides of the transaction: as TuSimple’s second largest shareholder and the controlling party of the Three-Body IP. This dual position was conspicuously absent from TuSimple’s announcement.

91.The conflict of interest is further amplified through overlapping leadership:

a)

SINA employees Yunli Liu and Lijing Zhang serve on TuSen ZhiTu, TuSen WeiLai, the two TuSimple China entities’ boards.

b)

Lijing Zhang simultaneously acts as Micro Dream’s legal representative.

c)

Mo Chen, who controls TuSimple through combined voting power, has a history of related-party dealings with SINA.

92.This arrangement, executed under Mo Chen and Cheng Lu’s control, creates a toxic scenario for TuSimple’s shareholders, especially when TuSimple is a controlled entity. If the project succeeds, SINA benefits twice—through licensing fees and increased IP value across all their ventures. If it fails, SINA still wins—they have effectively used TuSimple’s money to market and enhance their IP’s value, while TuSimple’s shareholders bear all the losses.

93.The structure enables value extraction that benefits SINA at shareholders’ expense:

a)

TuSimple could be pressured to accept an upfront licensing fee, but the revenue share remains unclear.

b)

Development priorities could be skewed toward enhancing broader IP value rather than game profitability.

c)

Marketing expenditures would benefit all SINA’s Three-Body IP while costs are borne solely by TuSimple.

94.With TuSimple management’s excessive spending of $12 million monthly with only 200 employees and no effective oversight, this deal represents a concerning evolution in the pattern of related-party transactions between Mo Chen and SINA, effectively transforming TuSimple’s remaining $450 million of cash into a marketing fund for SINA’s franchise.

(d)

Preparing for New Massive Asset Transfers to China for Gaming/Animation

95.In early November 2024, evidence emerged of potential large-scale fund transfers:

a)

Two TuSimple China subsidiaries, TuSen ZhiTu and TuSen WeiLai, declared registered capital increases of $100M and $50M respectively.

b)

These capital increases are typically prerequisite steps for transferring funds from US to China.

c)

Both entities have 2 Board Directors from SINA.

K.

Mo Chen’s Attempt to Stay in Power by Usurping Dr. Hou’s Votes.

(a)

The Controversial 2024 Annual General Meeting

96.On November 12, 2024, TuSimple distributed its proxy statement for the virtual Annual General Meeting scheduled for December 20, 2024, attached hereto as Exhibit 5. The proxy statement contained the following concerning elements:

i.

The statement, prepared by the Mo Chen-controlled TuSimple, attempted to mislead shareholders by counting Xiaodi Hou’s 29.7% voting power as part of Mo Chen’s control block, representing that Mo Chen controls 57% of the vote.

ii.

Moreover, not only does the statement misrepresent that Mo Chen controls 57% of the vote, but it also completely ignores the two-year duration of the Voting Agreement signed, which was understood and agreed by the parties.

iii.

This Court should enjoin the vote because the materially false and misleading statement that Mo Chen allegedly already controls 57% of the vote, and omitting that this is contested by Dr. Hou, imperils a fair vote: knowing that the Board behind the proposals already has the votes it needs poses a significant and imminent risk that TuSimple shareholders will simply give their proxies to management, or abstain from voting.

iv.

This misrepresentation portrayed the Company as still being a controlled entity under Mo Chen.

97.The proposals as a whole are designed to entrench Mo Chen’s control over TuSimple.

i.

The proposals seek to divide the current six-member board into three classes with three-year terms. If approved, directors could only be removed “for cause.”

ii.

The proposed structure would significantly entrench Mo Chen’s purported current control.

iii.

The timing and nature of this staggered board proposal is particularly alarming. A staggered board structure represents one of the strongest anti-takeover defenses available under Delaware law, as it would prevent TuSimple’s shareholders from removing the entire board at once and make it nearly impossible to challenge management’s decisions.

iv.

The fact that the Company’s proposal comes precisely when Mo Chen is attempting to unilaterally extend his voting control beyond its agreed expiration, while simultaneously preparing for substantial fund transfers to entities with known SINA connections, suggests a coordinated effort by Mo Chen to permanently entrench control and facilitate controversial related-party transactions without meaningful shareholder oversight or the possibility of intervention.

L.

Press Conference Responding to Stockholder Concerns

98.At the latest press conference on September 14, 2024, when discussing the duration of the proxy statement, Mo Chen also announced to the public that: “[T]he proxy lasts for two years. I didn’t say [White Marble] gave me [its] authorization for life; I asked for two years. I needed those two years of proxy to give me absolute power to restructure the company. And now, yes, it’s about to expire.” (see Ex. 3, at Exhibit C).

M.

Mo Chen’s Unilateral Amendment of the Form 13D Is an Admission that His Agreement with Dr. Hou Expired on November 9, 2024

99.Realizing that the description of his agreement with Dr. Hou in the Form 13D filed in November 2022 completely undermines the proxy statement’s claim that Mo Chen controls 57% of the vote, Mo Chen attempted to retroactively rewrite the terms of the November 2022 voting arrangement by amending his Form 13D:

a)

Original Form 13D (November 15, 2022) (attached hereto as Exhibit 6):

i.

Explicitly referred to the Proxy Agreement and Voting Agreement jointly as the “Proxy Voting Arrangement.”

ii.

Clearly stated both would terminate after two years or by mutual agreement.

b)

Amended Form 13D (November 13, 2024) (attached hereto as Exhibit 7) (one day after TuSimple received the White Marble Entities’ demand for books and records:

i.

Artificially separated the Proxy Agreement from the Voting Agreement.

ii.

Claimed only the Proxy Agreement had the two-year limitation.

iii.

Asserted the Voting Agreement continues indefinitely.

iv.

Attempted to maintain permanent control over Dr. Hou’s voting rights despite the documented two-year limitation.

100.Of course, a self-serving description of an agreement drafted two years previously does not constitute an agreement, and is a far less credible evidence of what was agreed to than the description given contemporaneously (or near-contemporaneously) by Mo Chen in his original Form 13D filed November 25, 2022.

101.These coordinated actions—the capital increases in China subsidiaries, the misleading proxy statement, the staggered board proposal, and the unilateral reinterpretation of the voting arrangement, the transparent attempt to amend the Form 13D describing the arrangement—suggest a comprehensive strategy by Mo Chen to cement control and facilitate asset transfers before the expiration of Mo Chen’s voting control.

COUNT I
(Declaratory Judgment)

102.Plaintiffs repeat and reallege each and every allegation contained in the paragraphs above as if fully set forth herein.

103.The Voting Agreement is part of the Proxy Voting Arrangement.

104.The terms of the Proxy Voting Arrangement provide that it expired on November 9, 2024.

105.Contemporaneous statements by Dr. Hou and by Mo Chen reflect a meeting of the minds that the term of the Proxy Voting Arrangement expired on November 9, 2024.

106.Alternatively, the Voting Agreement is invalid and unenforceable because, among other reasons, (i) it was procured based on misrepresentations and under duress, (ii) there was a lack of consideration for the agreement, (iii) there was a failure of a condition precedent, and/or (iv) there was a failure of a condition subsequent.

107.Notwithstanding the expiration or invalidity and unenforceability of the Voting Agreement, Mo Chen purports to claim entitlement to control Dr. Hou’s Voting Rights, including at the upcoming Annual Meeting, and the Company appears to recognize Mo Chen’s claim.

108.Thus, there is an actual and justiciable controversy between the parties regarding the enforceability of the Voting Agreement and the control of Dr. Hou’s Voting Rights.

109.The Court has authority under 8 Del. C. § 111 to interpret, apply, enforce or determine the validity of the provisions of the Voting Agreement, and the Court has authority under 10 Del. C. § 6501, et seq. to issue declaratory relief resolving the controversy between the parties.

110.The White Marble Entities are entitled to declarations that the Voting Agreement expired on November 9, 2024, or, alternatively, that it is invalid and unenforceable, and that the White Marble Entities, of which Dr. Hou is the beneficiary, are entitled to vote their shares in the Company and that Mo Chen has no rights to vote those shares.

PRAYER FOR RELIEF

WHEREFORE, Dr. Hou respectfully requests that the Court enter an Order:

a.

Entering judgment in favor of Plaintiffs and against Defendants Mo Chen and TuSimple;

b.

Declaring that the Voting Agreement expired on November 9, 2024, or, alternatively, that it is invalid and unenforceable;

c.

Declaring that the White Marble Entities, of which Dr. Hou is the beneficiary, are entitled to vote their shares in the Company and that Mo Chen has no rights to vote those shares;

d.

Postponing the Annual Meeting to a time after the controversy relating to Dr. Hou’s Voting Rights is resolved;

e.

Awarding to Dr. Hou the costs and disbursements of this action, including reasonable attorneys’ fees and expenses; and

f.

Awarding such other and further relief as the Court deems just and proper.

 

	Mcdermott Will & Emery LLP
Of Counsel:		/s/ Ashley R. Altschuler
David E. Azar Milberg Coleman Bryson Phillips Grossman PLLC 2355 Westwood Blvd., #311 Los Angeles, CA 90064 (213) 617-1200   Richard Liu Innovative Legal Services, P.C. 355 S. Grand Avenue Suite 2450 Los Angeles, CA 90071   Dated: November 22, 2024		Ashley R. Altschuler (#3803) Harrison S. Carpenter (#6018) Ryan D. Konstanzer (#6558) Alexander T. Dickinson (#6780) The Brandywine Building 1000 N. West Street, Suite 1400 Wilmington, DE 19801 Tel.: (302) 485-3900 aaltschuler@mwe.com hcarpenter@mwe.com rkonstanzer@mwe.com adickinson@mwe.com   Attorneys for Plaintiffs White Marble LLC and White Marble International Limited

 

 

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

WHITE MARBLE LLC, a limited liability company organized in Delaware and beneficially owned By Dr. Xiaodi Hou, and WHITE MARBLE INTERNAITONAL LIMITED, a company incorporated in Samoa and beneficially owned by Dr. Xiaodi Hou,,   Plaintiffs,   v.   MO CHEN and TUSIMPLE Holdings, Inc.,   Defendants.

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

C.A. No. 2024-1208-PAF

 

STATUS QUO ORDER

WHEREAS, plaintiffs White Marble LLC and White Marble International Limited (together, the “White Marble Entities”), both of which are beneficially owned by Dr. Xiaodi Hou (“Dr. Hou”), initiated the above captioned action (the “Action”) on November 22, 2024;

WHEREAS, through the White Marble Entities and other asserted trusts, Dr. Hou holds approximately 29.7% of the total stockholder voting power of defendant TuSimple Holdings, Inc. (“TuSimple” or the “Company”);

WHEREAS, in the Action, as more fully set forth in the Verified Complaint, the White Marble Entities contend that a Voting Agreement executed by the White Marble Entities and Mo Chen (“Mr. Chen”) on November 9, 2022, stating that the White Marble Entities and their assignees and transferees (including the trusts referenced above) are required to vote their shares as directed by Mr. Chen, is inoperable and ineffective, and that the White Marble Entities are entitled to control how their shares are voted, including at the Company’s 2024 annual meeting of stockholders (the “Annual Meeting”), currently scheduled for December 20, 2024;

WHEREAS, at the Annual Meeting, the proposals on which stockholders are scheduled to vote include (i) election of the Company’s proposed slate of six directors (the “Board Election”), and (ii) amendment of the Company’s Articles of Incorporation and Bylaws to create a classified board and eliminate stockholders’ ability to remove directors without cause (the “Governance Changes”); and

WHEREAS, Dr. Hou opposes the Board Election and the Governance Changes, and desires and has caused the White Marble Entities’ shares to be voted against those proposals; and

NOW, THEREFORE, IT IS HEREBY ORDERED, this 13th day of December, 2024, as follows:

1. Trial will be held in the Action in the first quarter of 2025.

2. This Order shall remain in effect until the earlier of (i) a final, unappealable decision from this Court on the merits, whether post-trial or upon any pre-trial motions, or (ii) the Court enters a superseding order.

 

3. Unless and until otherwise ordered by the Court, and subject to the provisions ofthis Order, following the Annual Meeting, the business and affairs of the Company shall be managed by and under the direction of the directors elected pursuant to the Board Election.

4. The Company shall hold the vote on the Governance Changes, and, if approved at the Annual Meeting, shall be able to amend, modify, or repeal any provision of the Company’s Articles of Incorporation or Bylaws, pending resolution of the Action in order to implement those changes.

a. If the Governance Changes are approved at the Annual Meeting (without including the shares of the White Marble Entities and their assignees and transferees) and the Court determines in the Action that the White Marble Entities, not Mr. Chen, control how the White Marble Entities’ shares are voted, approval of the Governance Changes and any corresponding amendment of or modifications to the Company’s Articles of Incorporation or Bylaws to implement the Governance Changes will stand; but the Company will conduct a special meeting of stockholders solely to vote on whether to undo the Governance Changes, and the proxy statement for the new meeting will include disclosures reflecting the judicial determination of the White Marble Entities’ control of the voting of their shares and the corresponding effect of that judicial determination on the voting power controlled by Mr. Chen. The Court will retain jurisdiction over the enforcement of this Paragraph 4(a).

b. If the Court determines in the Action that Mr. Chen, not the White Marble Entities, control how the White Marble Entities’ shares are voted, then the White Marble Entities’ shares shall be deemed to have been voted in favor of the Governance Changes and the vote on the Governance Changes at the Annual Meeting (after giving effect to such voting of the White Marble Entities’ shares in favor of the Governance Changes) shall stand.

5. While this Order is in effect, pursuant to Paragraph 2 herein, the Company shall not take, nor shall Mr. Chen cause or direct any Company personnel to take, the following actions without (i) approval of the special committee, consisting of directors Albert Schultz and Zhen Tao, formed by the Company in connection with the Action, and (ii) 10 business
days’ advance written notice to the Court and the White Marble Entities, through their undersigned counsel:

a. Approving, consenting to, or consummating any merger or acquisition of the Company or Company subsidiaries (including by way of sale of assets) with value greater than 10% of the Company’s assets, as reflected on the Company’s most recent balance sheet prior to
the entry of this Order.

b. Except as provided in Paragraph 4, amending, modifying, or repealing any provision of the Company’s Articles of Incorporation or Bylaws that affect stockholder voting rights.

c. Transferring cash, cash equivalents, or short-term investments exceeding US$15M per month to the Company’s mainland China operations through the first quarter of 2025.

6. The restrictions imposed in Paragraph 5 may be waived on a case-by case basis by written agreement of the parties to the Action. The parties shall notify the Court of any waiver(s) to the application of this Order by providing the Court with the written waiver(s) of the restriction(s). The Court may also modify the restrictions of this Order upon request of any party for good cause shown.

7. The Company is further restricted from taking, and Mr. Chen is restricted from causing the Company to take, any corporate action requiring a stockholder vote - including any sale, lease, or exchange of all or substantially all of the Company’s property and assets without first giving the Court and the White Marble Entities, through their undersigned counsel, at least 10 business days’ advance written notice.

8. Except for purposes of participation in voting at the Annual Meeting, the shares at issue in the Action, which represent approximately 29.7% of the total stockholder voting power of the Company, will not be voted by either the White Marble Entities (or any assignee and transferee, including the trusts referenced above) or Mr. Chen while this Order remains in effect pursuant to Paragraph 2 herein.

9. Except as agreed herein, the parties reserve and do not waive or relinquish any rights, including rights to confirm, contest, rescind, or void actions by the Company, following the Court’s resolution of the Voting Agreement dispute in the Action.

	/s/ Paul A. Fioravanti, Jr
	Vice Chancellor

Exhibit 99.5

 

TuSimple Co-Founder and Largest Investor Sends Letter to the Board of Directors Demanding Immediate Liquidation of the Company

 

Announces Legal Actions to Protect Shareholders’ Investment and Intent to Withhold Support on ALL Proposals at the Upcoming Annual Meeting

 

Since Mo Chen and Cheng Lu Assumed Leadership: TuSimple's Share Value Plummeted 91% as Core Autonomous Driving Business Transformed into Chinese AIGC Venture

 

Recent Corporate Actions Raise Significant Concerns for U.S. Shareholders: $150M Capital Movement to Chinese Subsidiaries Coincides with Reduced U.S. Market Visibility and SEC Reporting

 

Visit www.SaveTuSimple.com to Obtain Important Information and Sign Up for Updates

 

HOUSTON, TX, November 26, 2024 – Dr. Xiaodi Hou, co-founder and largest investor of TuSimple Holdings Inc. (OTCMKTS: TSPH) (“TuSimple” or the “Company”), sent a letter to the Company’s Board of Directors.

 

The full letter is below:

 

November 25, 2024

 

TuSimple Holdings Inc.

9191 Towne Centre Drive, Suite 150

San Diego, CA 92122

Attn: Board of Directors

 

Dear Members of the Board,

As a founder who invested seven years building TuSimple Holdings Inc. (“TuSimple” or the “Company”) and its largest shareholder, it has been disappointing to watch shareholders’ collective investment value plummet by over 91% in less than two years under the leadership of Mo Chen (Executive Chairman until September 2024 and now Chief Producer and director) and Chairman and CEO Cheng Lu.

Since February 2024, I have escalated my corporate governance concerns to the Company’s Board of Directors (the “Board”) through increasingly formal channels - from direct communications to legal filings - while watching the situation deteriorate with each passing month.

Most concerning was in August 2024 when the Board announced its unanimous approval of the animation and video game project. The timing of this approval, following shortly after serious publicly documented concerns of related-party transactions, raises significant questions about the Board's priorities and oversight.¹

This pivot – from TuSimple's autonomous driving mission to Artificial Intelligence Generated Content (AIGC) development in China – represents a fundamental change in business direction. The Company implemented this transformation without any advance communication to or vote by shareholders. The first and only disclosure came through the August 14, 2024 “Three-Body Problem” partnership announcement, with no presentation of feasibility studies or technical roadmap that shareholders typically expect for such a significant business transformation.

Public records also show that the Company has increased its Chinese subsidiaries' registered capital by $150 million.² These corporate actions, undertaken without shareholder notice or approval, cast unprecedented risk to the Company's remaining $450 million in cash reserves.

---

¹ No. 2024-1208 (Del. Ch.)

² No. 3:23-cv-02333-BEN-MSB (S.D. Cal.)

This is a critical moment for me as TuSimple’s largest investor, and for any shareholder trying to understand how the pivot to AIGC creates shareholder value. Shareholders are concerned about:

I.

The Complete Derailment of Shareholder Investment Thesis - TuSimple raised over $1 billion from investors to develop autonomous driving technologies. Without shareholder approval, those funds are now being redirected to gaming and animation development. Eight years of autonomous driving development and shareholder investment have been reduced to “partnerships and licensing.”

II.

Suspected Undisclosed Related Party Concerns Benefiting Mo Chen and Sina - The Three-Body Problem partnership announcement failed to disclose critical facts to shareholders - that Three-Body Problem’s intellectual property is controlled by Sina Corporation (“Sina”), TuSimple's second-largest shareholder, through a 60% stock pledge. This structure involves Sina in dual roles, while other shareholders bear the one-sided risk. Further, Mo Chen's personal gaming and animation companies share identical addresses and personnel with TuSimple China subsidiaries.

III.

The Breakdown of Board and Governance Oversight - The Company's estimated $450 million in cash reserves now operate with no real transparency and due to TuSimple’s contradictory deregistration filings.

 

Finally, on November 8, 2024, public reports show TuSimple quietly increased $150 million registered capital to its Chinese subsidiaries – corroborating my concerns given the Company's suspected undisclosed related party transactions and business pivot.

The impact of these changes extends far beyond major shareholders. Thousands of retail investors who committed their savings to TuSimple's autonomous driving mission have seen their investment value decline by over 91%. Hundreds of engineers who dedicated years to developing this groundbreaking technology have witnessed their work discontinued. The derailment of the Company's original mission represents more than just a financial impact. TuSimple's employees, the autonomous driving industry, and all shareholders deserve an honest answer and a fair resolution.

To protect remaining shareholder value, as you are aware, I have taken the following legal actions:

·

Following public records issued in China showing a $150 million increase in registered capital of TuSimple's Chinese subsidiaries, I filed for a temporary restraining order in the Southern District of California. This legal action seeks to restrict transfers of financial assets from the U.S. to China beyond normal business operations.

·

On November 22, 2024, I filed for injunctive relief in the Delaware Court of Chancery seeking to obtain declaratory judgment regarding the voting rights of my ownership stake corresponding to 29.7% of the total voting power, which Mo Chen claims to control even though the voting arrangement expired November 9, 2024 (as Mo Chen had previously acknowledged to the public). In the same filing, I also seek to postpone the upcoming annual meeting, currently scheduled to be held on December 20, 2024 (the “Annual Meeting”), to prevent the implementation of proposed significant governance changes before the voting rights dispute is resolved.

 

My 29.7% voting rights reverted to me on November 9, 2024, and at the Company's upcoming Annual Meeting, I intend to vote as follows:

Proposal 1 – “WITHHOLD ALL” on the proposed slate of directors

Proposal 2 – “AGAINST” the proposed amendment to classify the Board providing for three-year staggered terms

Proposal 3 – “AGAINST” the ratification of the appointment of UHY LLP as the Company’s auditor

 

Unfortunately, voting is not enough. Given the documented risks to shareholder value outlined above, immediate action is required. As a founder, long-term executive, and the largest shareholder, I believe there is only one path forward for the benefit of all shareholders.

 

I demand the full liquidation of TuSimple with 100% of proceeds distributed to all shareholders on a pure pro-rata basis, regardless of share class.

 

To be clear, in any liquidation I would be forfeiting the super voting rights attached to my Class B shares. I am willing to do this because my sole priority is to maximize value for all shareholders.

 

The Board has a limited window to act in the best interest of all shareholders. Given the upcoming Annual Meeting and the recent increase in Chinese subsidiary capital, time is of the essence. I look forward to the Board's prompt response to these serious concerns.

 

 

Sincerely,

 

/s/ Xiaodi Hou

 

Dr. Xiaodi Hou

 

 

***

 

Investor Contact

Okapi Partners LLC

Mark Harnett

855-305-0856

info@okapipartners.com

 

Media Contact

Longacre Square Partners

Rebecca Kral / Aaron Rabinovich

WhiteMarble@longacresquare.com 

TuSimple Co-Founder and Largest Investor Issues Letter to Stockholders

Votes 29.7% Voting Stake AGAINST Staggered Board Proposal and Re-Election of all Non-CFIUS Directors at Upcoming Annual Meeting

Notes Leading Proxy Advisory Firms ISS and Glass Lewis Highlighted that Staggered Board Proposal is Not in Stockholders’ Best Interests

Demands the Immediate and Full Liquidation of TuSimple to Stop the Transfer of More Than $450 Million to Chinese Entities

Encourages Stockholders to Visit www.SaveTuSimple.com to Learn More and Sign Up for Updates

HOUSTON, TX, December 16, 2024 – Dr. Xiaodi Hou, co-founder and largest investor of TuSimple Holdings Inc. (OTCMKTS: TSPH) (“TuSimple” or the “Company”), today issued an open letter to fellow TuSimple investors.

The full text of the letter is below:

***

Dear Fellow Stockholders,

I write to you today not just as an investor, but as a co-founder who has poured seven years of passion, energy, and personal commitment into making TuSimple a world leader in autonomous driving. Like many of you, I invested in this Company because I believed in its transformative vision—to redefine the transportation industry.

Unfortunately, under the Company’s current management and board of directors (the “Board”), the chance of achieving that vision is fading fast. Given the extensive list of issues at TuSimple under the current leadership team—some of which I have already addressed in court filings—I believe liquidation, which could return $1.93 per share (or more) to stockholders, represents the most equitable path forward for all of us. Visit www.savetusimple.com for additional information.

Director Election Mechanism

The director election at the Company’s upcoming annual meeting of stockholders scheduled to be held on December 20, 2024 (the “AGM”) will be decided by a “plurality voting system,” meaning each of the six incumbent directors needs only a single share vote to be re-elected. While this may give the impression of a predetermined outcome, the results of the AGM’s director election do not seal our fate.

Stockholders have an alternative path to Board renewal through a written consent solicitation, which enables us to remove directors outside the annual meeting cycle with the support of a majority of the outstanding voting power. This is the path that I intend to pursue.

Independent Governance Advisors Share our Concerns

At the AGM, Proposal No. 2 seeks to establish a “staggered Board,” which would significantly undermine stockholders’ ability to hold the Board accountable and inhibit the fundamental stockholder right to change the Board through a consent solicitation or at future annual meetings.

Two leading independent proxy advisory firms, ISS and Glass Lewis, whose recommendations influence institutional investors holding trillions of assets, recommended stockholders vote AGAINST the staggered Board proposal (Proposal No. 2), concluding that it fundamentally conflicts with stockholder interests, particularly in light of the current circumstances that call for enhanced Board accountability at TuSimple.

Both firms have also recommended a WITHHOLD vote for all independent directors of the Company except the CFIUS director, Albert Schultz. ISS has gone a step further by opposing nearly the entire Board slate, including Cheng Lu, Mo Chen, Jianan Hao, James Lu and Zhen Tao.

I have directed my voting rights, representing 29.7% of the total voting power, to be voted as follows at the AGM:

·

Proposal No. 1 – “WITHHOLD” on the proposed slate of all directors, except Mr. Schultz

·

Proposal No. 2 – “AGAINST” the proposed amendment to classify the Board

·

Proposal No. 3 – “AGAINST” the ratification of UHY LLP as the Company’s auditor

My Legal Progress Protects Stockholder Value

My commitment to stockholder rights led me to file a lawsuit in the Delaware Chancery Court (the “Court”) (Case No. 2024-1208-PAF) to confirm my voting rights, and we have made the following progress in protecting stockholder interests:

·

On December 2, 2024, the Court granted expedited proceedings, with a final hearing on voting rights control expected in Q1 2025.

·

On December 13, 2024, after intense negotiations, we secured a Status Quo Order (“SQO”) from the Court that implements crucial protections for all stockholders.

·

The SQO now requires 10 business days' advance written notice before the Company can take several significant actions that could harm stockholder value, including:

o

Transferring cash, cash equivalents, or short-term investments exceeding $15M per month to the Company’s mainland China operations through Q1 2025;

o

Approving, consenting to, or consummating any merger or acquisition of the Company or Company subsidiaries (including by way of sale of assets) with value greater than 10% of the Company’s assets, as reflected on the Company’s most recent balance sheet prior to the entry of the SQO;

o

Amending, modifying, or repealing any provision of the Company’s Articles of Incorporation or Bylaws that affect stockholder voting rights (except as explicitly contemplated in the SQO); and

o

Taking any other corporate action requiring a stockholder vote—including any sale, lease, or exchange of all or substantially all of the Company’s property and assets.

The Path Forward:

While the upcoming AGM may not immediately change the Board’s composition, I anticipate a trial and a declaratory judgment from the Court affirming my voting rights in Q1 2025. Once affirmed, I intend to initiate a written consent solicitation seeking to remove all current directors, except for Mr. Schultz, and ultimately seek to replace them with truly independent directors committed to proper corporate governance. I intend to further pursue a liquidation and dissolution of the Company to enable stockholders to realize ~$1.93 per share (or more) of value.

Stay Involved and Informed:

Over the past weeks, many of you have reached out through emails, calls, and community forums to offer your support and insights. Thank you!

We are not merely observers. Together we have the responsibility and power to determine the Company’s future.

To protect your investment:

·

Vote your shares at the AGM

·

Sign up at www.savetusimple.com for relevant updates, including the anticipated consent solicitation

·

Share this information with fellow stockholders

·

Ensure your broker has your current contact information

Thank you for your patience, grit, and continued belief in what we can achieve together.

With determination and hope,

Xiaodi Hou
Co-Founder and Stockholder, TuSimple Holdings Inc.

Legal Disclaimer:
This letter is provided solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The views expressed are my own and are based on publicly available information as well as personal experience. Certain statements herein may contain forward-looking information and are subject to risks and uncertainties that could cause actual outcomes to differ materially. This letter does not constitute legal, investment, tax, or financial advice. Each stockholder should consult their own advisors regarding their particular situation. Neither the author nor any related party undertakes an obligation to update any information contained herein.

***

Investor Contact

Okapi Partners LLC

Mark Harnett

855-305-0856

info@okapipartners.com

 

Media Contact

Longacre Square Partners

Rebecca Kral

WhiteMarble@longacresquare.com

 

Exhibit 99.7

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including additional amendments thereto) with respect to the Class A Common Stock, $0.0001 par value per share, of TuSimple Holdings Inc., a Delaware corporation. This Joint Filing Agreement shall be filed as an Exhibit to such Statement.

Dated: December 16, 2024

 

	White Marble LLC
	By:	/s/ Xiaodi Hou
		Name:	Xiaodi Hou
		Title:	Manager

 

 

	White Marble International Limited
	By:	/s/ Xiaodi Hou
		Name:	Xiaodi Hou
		Title:	Director

 

 

	/s/ Xiaodi Hou
	Xiaodi Hou

 

---