MYDX - Sorting out the MYDX debts* This information needs to be looked at CLOSELY and comprehended fully when looking at MYDX debt
Coming into the Summer of 2016, MYDX carried a very small float of around 6,000,000 shares max, but since June of 2016 the float has been growing at an accelerated rate reaching 203,124,474 shares by November 23, 2016. I took a closer look at some of the more suspicious looking debts that have been causing the massive dilution.
Investor Relations Partners
On April 1, 2016, MYDX enters into an Investors Relation Contract with Investor Relations Partners. http://www.irpartners.com
On April 1, 2016, the Company entered into an agreement with Investor Relations Partners (“IRP’), to render certain investor relations and financial communications services to the Company. IRP agreed to perform investor relations, public relations, stock surveillance and other ancillary services as requested by the Company (the “Agreement”). For the requested services, the Company was to pay IRP a one-time payment of Two Hundred Fifty Thousand Dollar ($250,000) (the “Claim”) upon the signing of the Agreement.
Six weeks later on May 24, 2016 the $250,000 debt is transferred to Phoenix Fund Management LLC. Phoenix Fund Management LLC is run by Allen Gabriel Silberstein who previously showed up in SEC litigation through a former company of his named AGS Capital Group LLC https://www.sec.gov/news/pressrelease/2015-50.html https://www.sec.gov/litigation/admin/2015/34-74586.pdf
On May 24, 2016, the Company and Phoenix Fund Management, LLC (“Phoenix Fund”) entered into a Claim Purchase Agreement with IRP to purchase the Claim held by IRP. Phoenix Fund executed a Settlement Agreement (the “Settlement Agreement”) whereas the Company and Phoenix Fund agreed to resolve, settle and compromise the Claim. In settlement of the Claim, the Company shall issue and deliver to Phoenix Fund shares of its common stock as requested by Phoenix Fund, periodically, at a fifty percent (50%) discount from the average closing price of the Company’s common stock for the three trading days prior to the date of issuance.
On June 8, 2016, Phoenix Fund Management LLC (Allen Gabriel Silberstein) files a claim with the Miami-Dade County courts to have the $250,000 debt paid off in free trading stock using the 3(a)10 exemption. https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDXPhoenix60816.pdf
The Court Order is used to circumvent Rule 144 and make the stock free trading despite the debt only being 2 months old.
On June 13, 2016 MYDX issues 1,041,348 free trading shares of stock to pay off the first $72,895 of the $250,000 claim. This is the first major bump to the float since the S-1 registration statement was made effective in 2014.
On June 13, 2016, Phoenix Fund elected to have the Company issue 1,041,348 free trading shares of the Company’s common stock in exchange for retirement of $72,895 of the initial Claim
1,041,348 shares for $72,895 of debt is a conversion price of $.07/share. MYDX opened trading at $.145/share on June 13, 2016.
On August 11, 2016, Phoenix Fund Management, LLC elected to have the Company issue 250,000 free trading shares of the Company’s common stock in exchange for retirement of $16,250 of their debt
250,000 shares for $16,250 of debt is a conversion price of $.065/share. MYDX opened trading at $.135/share on August 11, 2016.
Between August 11, 2016 and September 30, 2016, Phoenix Fund converted the remaining balance of the Note ($160,855) into 18,578,088 free trading shares of stock. That's an average conversion price of $.00866/share.
Just from the $250,000 owed to Investor Relations Partners alone, the float grew by 19,869,436 shares more than tripling from where it started before the summer.
Making the whole Phoenix Fund Management LLC/Investors Relations Partners deal more disturbing is the fact that both entities once shared the same address at 1901 Avenue of the Stars Second Floor, Los Angeles, CA 90067 http://www.otcmarkets.com/research/service-provider/Investor%20Relations%20Partners?id=6181&b=n&filterOn=2 https://web.archive.org/web/20160326133145/http://phoenixfundmgt.com/ContactUs.html
And the fact that Investor Relations Partners provided IR services to Adaptive Medias Inc (ADTM) then also ended up transferring that debt to Phoenix Fund Managment LLC (Allen Gabriel Silberstein) who filed in Miami-Dade County to have the debt turned into free trading stock using the 3(a)10 exemption to circumvent Rule 144 https://promotionstocksecrets.com/wp-content/uploads/2016/12/ADTMPhoenix1.pdf https://promotionstocksecrets.com/wp-content/uploads/2016/12/ADTMPhoenix2.pdf
It should be Noted that the attorneys used for the Court Proceedings were - Jesse Dean-Kluger representing Phoenix Fund and Clayton R Kaiser representing both MYDX and ADTM. Jesse Dean-Kluger was also the attorney that Phoenix Fund Management LLC used to try to register its business with the Florida SOS. http://search.sunbiz.org/Inquiry/CorporationSearch/SearchResultDetail?inquirytype=EntityName&directionType=Initial&searchNameOrder=PHOENIXFUNDMANAGEMENT%20W160000131250&aggregateId=reject-w16000013125-4070d1ca-6415-467c-ad31-2ec986f21183&searchTerm=Phoenix%20Fund%20Management&listNameOrder=PHOENIXFUNDMANAGEMENT%20L020000037830
It should also be noted that there was a typo in the MYDX court filing where they forgot to replace the name Adaptive Medias Inc with MyDx Inc. https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDXPhoenix60816.pdf
In my opinion there is some kind of partnership between Investor Relations Partners and Phoenix Funds Management LLC. Companies are entering into these IR contracts with Investor Relations Partners with the plan already in place for Phoenix Fund Management LLC to pay for the services for the company in exchange for discounted free trading stock - a clear abuse of the 3(a)10 exemption.
Lynx Consulting Group Ltd
April 3, 2016 - MYDX signs a Consulting Contract with Lynx Consulting Group Ltd https://www.sec.gov/Archives/edgar/data/1582341/000121390016018918/f10q0916ex10ii_mydxinc.htm
Lynx Consulting Group Ltd is a British Virgin Islands entity (using a well known money laundering address) controlled by Xiaolan Wang of Hong Kong.
The Contract pays Lynx Consulting Group Ltd $1,000,000 to help MYDX set up a Chinese branch to be used for MYDX business operations in China.
The Contract wasn't disclosed to the MYDX shareholders until November 23, 2016 when MYDX filed its 3rd Quarter Financial Report http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=11705681
By that point the $1,000,000 debt owed to Lynx Consulting Group Ltd had already been transferred to Phoenix Fund Management LLC (Allen Gabriel Silberstein)
On October 5, 2016, the Company, Lynx Consulting and Phoenix Fund Management, LLC (“Phoenix Fund”) entered into an Assignment and Modification Agreement. Phoenix Fund purchased the debt claim held by Lynx Consulting from MyDx. In settlement of the Claim, the Company shall issue and deliver to Phoenix Fund shares of its common stock as requested by Phoenix Fund, periodically, at a fifty percent (50%) discount from the average closing price of the Company’s common stock for the 22 trading days prior to the date of issuance. Upon execution of the assignment, Lynx released MyDx, Inc. from all liabilities under the original note.
So far Phoenix Fund Management LLC hasn't filed anything with the Miami-Dade County courts to have the debt turned into free trading stock using the 3(a)10 exemption, but at some point (probably not too far in the future) I expect they will and when they do the case can be looked up at the following link: https://www2.miami-dadeclerk.com/officialrecords/
Once the court filings start coming in for this Claim the debt will start getting turned into discounted free trading stock and diluted into the market. $1,000,000 can create a ton of dilution especially as the MYDX share price continues to drop.
Lynx Consulting Group Ltd also showed up in the filings for Atlas Technology International Inc (ATLT)
Signing for Lynx Consulting in the ATLT filings is Xiaolan Wang of Hong Kong. Xiaolan Wang also signed in SEC filings for another foreign entity called Capital Flows Ltd. Capital Flows Ltd uses the same BVI address as Lynx Consulting and owns large chunks of shares in a couple of fresh IPOs:
Arc Lifestyle Group Inc (which never got its S-1 approved) https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001647092
Nova Smart Solutions Inc (which never got its S-1 approved) https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001649801
Arc Lifestyle Group Inc and Nova Smart Solutions Inc were basically mirror shells set-up and controlled by the same people. Common insiders from both entities like Dominguez Cinta Abraham, Rory Man Lok San, and Xiaoyue Zhang also show up in the filings for Golden Valley Development Inc (GVDI), Go EZ Corp (GEZC), E-Waste Systems Inc (EWSI), and Tanke Inc (TNKE) which all amounted to just pink sheet junk that got diluted to pretty much worthless.
From the Nova Smart Solutions Inc filings we also learn that Talent Cloud Limited is a wholly owned subsidiary of Nova Smart Solutions Inc.
On June 11, 2015, the Company was incorporated under the laws of the State of Florida. We were formed to market and sell UAV around the world. The Company through its CEO and CFO, incorporated a subsidiary, TalentCloud Ltd, a Hong Kong based corporation, on June 25, 2015 to provide Corporate Solutions. We are in the development stage, and have yet to realize revenues from our operations.
Which brings us to our next section - the Talent Cloud Limited debt
Talent Cloud Limited
Talent Cloud Limited is a Hong Kong based entity.
Obviously with both Talent Cloud Limited and Lynx Consulting Group Ltd having common connections to the same group out of Hong Kong that set up Arc Lifestyle Group Inc and Nova Smart Solutions Inc it stands to reason that as part of its $1,000,000 consulting agreement, Lynx Consulting Group Inc introduced Talent Cloud Limited to MYDX.
Based on exhibits provided to the Manatee County court system we know that MYDX signed a consulting contract with Talent Cloud Limited on July 1, 2016 for Talent Cloud Limited introduce to MYDX up to 20 potential hires as full or part time staff members for the Chinese business operations of which at least 5 of the candidates must have exception qualifications. MYDX will then have the option of whether or not to employ/engage the candidates. For each potential hire engaged by MYDX, Talent Cloud Limited is to be paid a fee with the maximum amount of $300,000 to be paid. https://promotionstocksecrets.com/wp-content/uploads/2016/12/TalentCloudContract.pdf
Later on November 4, 2016 the consulting contract was amended asking Talent Cloud Limited to engage an additional 20 full or part time staff members for the Chinese business operations with the maximum amount to be paid under the contract increasing to $700,000. https://promotionstocksecrets.com/wp-content/uploads/2016/12/TalentCloudamendedcontract.pdf
View all exhibits from all 4 court case at the following links: https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDX81116exhibits.pdf https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDX92016EXHIBITS.pdf https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDX111516exhibits.pdf https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDX112916Exhibits.pdf
So far Talent Cloud Limited has billed MYDX the following amounts:
$48,900 for engaging an E-Commerce Project Manager (no name given) On July 25, 2016
$47,500 for engaging a Community Manager (Jiang Juxia) on August 15, 2016
$47,500 for engaging an APP Manager (Weng Pei Lu) on August 15, 2016
$49,500 for engaging a Finance Controller (Weiguo Zhang) on October 31, 2016
$48,600 for engaging a Business Development Specialist for the Southern Territories (Xiao Fang) on November 15, 2016
$51,720 for engaging a Business Development Specialist for the Northern Territories (Ningbo Li) on November 15, 2016
Signing for Talent Cloud Limited in the court documents is Xiaowei Zhang. Oddly, despite Talent Cloud Limited being a wholly owned subsidiary of Nova Smart Solutions Inc, Xiaowei Zhang's name doesn't show up in the Nova Smart Solutions Inc filings. A Xiaoyue Zhang does making me think that maybe Xiaoyue Zhang is related to Xiaowei Zhang (perhaps his daughter). I also have to wonder if this is the same Xiaowei Zhang that in the past landed in prison in China for money laundering/embezzlement scheme (see the following link for more details) https://www.sec.gov/Archives/edgar/data/1369868/000120445910003011/form8k.htm
The debts being created by Talent Cloud Limited for their services are being acquired by/transferred to Rockwell Capital Partners Inc to be turned into discounted free trading stock.
Rockwell Capital Partners Inc is run by Samuel Oshana. Prior to starting Rockwell Capital Partners Inc, Oshana used to run IBC Funds LLC. IBC Funds LLC got busted by the SEC in February of 2016 for abusing the 3(a)10 exemption. https://www.sec.gov/litigation/admin/2016/33-10042.pdf
I see no difference between how IBC Funds LLC used the 3(a)10 exemption and how Rockwell Capital Partners Inc is using the 3(a)10 exemption now only a few months after being busted by the SEC.
As quickly as Talent Cloud Limited is billing MYDX the debt is being transferred to Rockwell Capital Partners Inc (Samuel Oshana) who is immediately filing with the Manatee County courts to have the debt turned into discounted free trading stock using the 3(a)10 exemption circumventing Rule 144.
Talent Cloud billed MYDX $48,900 on July 25, 2016 for engaging an E-Commerce Project Manager position. On August 8, 2016 that debt was transferred to Rockwell Capital Partners Inc (Samuel Oshana) and on August 12, 2016 the debt was settled in court to be paid back in discounted free trading stock only 3 weeks after the debt was created. https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDXRockwell1.pdf https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDX81116exhibits.pdf
Talent Cloud billed MYDX $95,000 on August 15, 2016 for engaging two positions. On September 20, 2016 the debt was transferred to Rockwell Capital Partners Inc (Samuel Oshana) and on September 21, 2016 the debt was settled in court to be paid back in discounted free trading stock only 5 weeks after the debt was created. https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDXRockwell2.pdf https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDX92016EXHIBITS.pdf
Between August 12, 2016 and September 30, 2016 the $143,900 owed to Rockwell Capital (originally owed to Talent Cloud) plus $10,000 owed to Rockwell Capital (originally owed to Meyers Associates LP for placement services for the Talent Cloud deal) was turned into 17,426,800 free trading shares of stock.
17,426,800 shares of stock for $153,900 in debt is a conversion price of $.0088/share.
Talent Cloud Limited is already owed another $149,820 which has already been transferred to Rockwell Capital Partners Inc and has already been settled in court to become discounted free trading stock. https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDXRockwell3.pdf https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDXRockwell.pdf
So far Talent Cloud Limited has only billed MYDX $283,720 of the maximum $700,000. And so far only $143,900 of the $283,720 has been turned into discounted free trading stock. This deal will create a lot more dilution in the future.
In my opinion, the Lynx Consulting Ltd and Talent Cloud Limited agreements just look like some way for MYDX to create $1,700,000 in bogus debt. It makes no sense for MYDX to start business operations in China when their US operations are losing money like crazy. It also makes no sense for MYDX to pay such extraordinarily high prices ($1,700,000) just to submit some paper work and recruit employees. Just setting up the business operations is costing MYDX so much money leading to so much toxic debt becoming owned by Phoenix Fund Management LLC (Allen Gabriel Silberstein) and Rockwell Capital Partners LLC (Samuel Oshana) that the MYDX share price will be diluted down to worthless before MYDX can even actually start any Chinese business operations. The whole set-up is more than a little fishy and makes me wonder if Daniel Yazbeck is just using these suspicious contracts and probably illegal 3(a)10 exemption agreements as a round-a-bout way of infusing MYDX with hard to get cash.
As new claims are filed with Manatee County, Florida they can be found at the following link: https://www.manateeclerk.org/PublicRecords/CourtRecordsSearch/tabid/57/st/1/Default.aspx
Of Note, the attorneys used for the quick court approved settlement agreements were Michael Geoffrey Brown for MYDX and Charles Nathan Cleland Jr for Rockwell Capital
As a side note, other public companies that are using liabilities to work out cash for 3(a)10 exemption discounted free trading stock with Rockwell Capital Partners Inc (Samuel Oshana) to date can be found at the following link: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=126962240
Meyers Associates LP
Meyers Associates LP is some kind of broker/placement agent often used by public companies when selling securities http://www.meyersassociateslp.com/
Meyers Associates LP is billing MYDX for some sort of finders fee every time Talent Cloud Limited bills MYDX for services provided. It works out to a fee of a little less than 10%.
So far Meyers Associates LP has billed MYDX $27,500 on the $283,720 in Claims that Talent Cloud Limited has submitted.
Like with Talent Cloud Limited, right after Meyers Associates LP bills MYDX, the debt is paid off/transferred to Rockwell Capital Partners Inc (Samuel Oshana) who then files a claim in Manatee County court to have the debt turned into discounted free trading stock only a few weeks after the debt was created using the 3(a)10 exemption and ignoring rule 144.
So far only $10,000 of the $27,500 owed to Meyers Associates LP has been turned into discounted free trading stock. MYDX will see more dilution from the other $17,500 owed to Rockwell Capital Partners Inc through this arrangement plus MYDX is sure to be billed many more times in the future by Meyers Associates LP.
Good Project Debt
Good Project is a Creative Brands specialist http://goodproject.com/
Back in November of 2015, MYDX used Good Project to help print up a bunch of promotional/PR type material.
By November 2016, MYDX still owed Good Project $11,951.25 so MYDX had Rockwell Capital Partners Inc (Samuel Oshana) pay off the debt putting MYDX on the hook $11,951,25 to Rockwell Capital Partners Inc instead. Rockwell Capital Partners Inc including this $11,951.25 debt in their November 29, 2016 court filing getting court approval to turn the debt into discounted free trading stock. https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDXRockwell.pdf https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDX112916Exhibits.pdf
That debt will now lead to future dilution for MYDX
Next Dimension Technologies Inc Debt
As of November 29, 2016, Next Dimension Technologies Inc was owed $138,393.68 for royalties due under the sub-license patent agreement and their patent and services provided in helping build the MYDX sensors.
Outstanding invoices for money owed to Next Dimension Technologies Inc spanned from March 2015 to November 2016 and can be found in the exhibits from the November 29, 2016 court case at the following link (pages 45 - 51) https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDX112916Exhibits.pdf
The entire balance due to Next Dimension Technologies Inc was paid off by/transferred to Rockwell Capital Partners Inc (Samuel Oshana) who then included the $138,393.68 claim in their November 29, 2016 court filing to have the money turned into discounted free trading stock using the 3(a)10 exemption. https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDXRockwell.pdf
That debt will now lead to future dilution for MYDX
Windset Capital Corp
Windset Capital Corp provides working capital loans to small businesses http://www.windsetcapital.com/
On May 31, 2016, MYDX took out a $75,000 loan from Windset Capital Corp as seen in the exhibits from the November 29, 2016 court case (pages 35 - 37) https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDX112916Exhibits.pdf
By late November the Note had balance remaining of $46,527.50 which Rockwell Capital Partners Inc agreed to pay off taking over the debt.
On November 29, 2016, Rockwell Capital Partners Inc included that $46,527.50 in their claim against MYDX in Manatee County court to get the debt turned into discounted free trading stock using the 3(a)10 exemption. https://promotionstocksecrets.com/wp-content/uploads/2016/12/MYDXRockwell.pdf
That debt will now lead to future dilution for MYDX
Other Toxic Lenders
Not really anything suspicious about a penny stock borrowing money from a toxic financier. Unfortunately for most penny stocks getting legitimate funding with decent terms is pretty much impossible leaving start up companies trading on the OTC with no choice but to seek out financing agreements from Toxic lenders. They are called toxic lenders because they accept payment in the form of discounted free trading stock once the debt has aged enough. Usually that discount is 50% below the market price or more creating the toxic effect on the share price. The dilution causes the price to drop and the lower the price drops the more stock it takes to pay back the debts sending the company into a debt/dilution death cycle.
Because MYDX is losing tons of money each quarter through failing business operations, liabilities have been growing quarter over quarter forcing MYDX to start using toxic financing to help fund operations http://investorshub.advfn.com/boards/read_msg.aspx?message_id=126972654
Some of the toxic lenders we find in the MYDX filings include:
1) Vista Capital Investments, LLC (David Clark)
2) Crown Bridge Partners, LLC (no name given in any SEC filings)
3) Auctus Fund, LLC (Lou Posner)
4) Adar Bays, LLC (Samuel Eisenberg)
5) Union Capital LLC (Yakov D Borenstein)
Some of the Notes have started to get paid off with Union Capital LLC receiving 14,777,833 free trading shares in September 2016, Adar Bays LLC receiving 16,699,486 free trading shares in September 2016, and Auctus Fund LLC receiving 22,067,223 free trading shares in September 2016.
For complete details visit the last 10Q http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=11705681
MYDX also issued 112,087,172 free trading shares between October 1, 2016 - November 22, 2016 to pay off debts.
MYDX lucked out that the entire Cannabis industry caught fire starting in September 2016 all the way through October 2016 helping create a lot more volume than usual to soak up that selling. There is no telling how long it will be before the cannabis industry will get hot again.
The MYDX float has grown from around 6,000,000 shares max at the start of June 2016 to 203,124,474 shares by November 23, 2016. Unfortunately for MYDX investors, there will be a lot more dilution in the coming months
*Nodummy is the one that did this amazing research into MYDX debt.