Novation Holdings Inc. (NOHO)

[Hi_Lo]

Michael Gelmon worked with Asher Enterprises to get toxic financing for NOHO.

Asher Enterprises was blacklisted by FINRA (Financial Industry Regulatory Authority) in 2014.

https://www.securitieslawyer101.com/2014/finra-blacklists-curt-kramer-mazuma-asher-enterprises/

FINRA Blacklists Curt Kramer, Mazuma and Asher Enterprises

The kind of toxic financing offered by Asher is extremely dilutive. Typically, the funder gives his client companies cash in exchange for convertible notes. The relative financing agreements provide for conversion of the notes into common stock at discounts of as much as 50 percent to market price. As the funder converts and sells time after time, stock price is driven down, and so more and more shares must be issued to meet the terms of the agreement. That is why these arrangements are called “death spiral funding.”

As dilution takes the shares outstanding to dizzying heights, many of Asher’s clients find it convenient to effect large reverse splits so they can “start over.”


Hence the dilution we're currently witnessing.

Where will Gelmon get the next round of toxic financing from now that Asher Enterprises is blacklisted and what we know of NOHO's business plan most likely won't happen since NOHO has no assets or revenue?

The reverse split the article mentions so they can "start over" is likely coming. It's just a matter of time.

Just search for Asher Enterprises in the quarterly reports:

Novation Holdings Inc. 10-Q Jan 17 2012
https://seekingalpha.com/filing/512086

Novation Holdings Inc. 10-Q/A May 3 2013
https://seekingalpha.com/filing/1025947

Novation Holdings Inc. 10-Q Nov 30 2013
http://www.secinfo.com/d1zv8w.nv.1e.htm

Novation Holdings Inc. 10-Q May 30 2014
https://seekingalpha.com/filing/1617337

Plus Asher Enterprises also pops up for financing in other Gelmon run companies like SNRY that went through a similar dilution.

Maybe FINRA should look into Gelmon and NOHO to see what they find?