Health Sciences Group Inc (HESG)

[funmaxus]

I'm responding directly to your post, however my post is also directed towards all through your questions.

Statement: I've read where the MM's have manipulated the Hell out of this stock. Also that this stock should be trading at .10 cents/share and investor's are setting there sales up to $5.00/share GTC.
Response: I previously attempted to calculate pps given certain available information and provided a post on the matter.
Please see here---> "Some thoughts on Share Structure, Revenue and Price Per Share"
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45048647

Statement: I don't understand what in the heck is going on. We are currently trading at .0004 which just keeps seeming to get lower and lower. I've also read where this stock may go to .0001
Response: As some have indicated in prior posts, buys at $0.0005 are recording at $0.0004. Based upon my previous calculations given available information, the stock should be trading much higher.

Statement/Questions: Who is right and what are we to expect. Is this stock going to go higher and in a Big way fast or not ?
I mean we have been holding on to our shares for the last 2 month's with the same stories about naked shorting. If this is true when will the truth come out ?
Response: At the present time, stock symbol HESG is non-reporting, and thus does not fit the definition of a Threshold Security. I've placed certain information in bold, followed by an additional response to your questions.
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Division of Market Regulation:
Key Points About Regulation SHO
http://www.sec.gov/spotlight/keyregshoissues.htm

Close-out" Requirement: Regulation SHO imposes additional delivery requirements on broker-dealers for securities in which there are a relatively substantial number of extended delivery failures at a registered clearing agency7 ("threshold securities"). For instance, with limited exception, Regulation SHO requires brokers and dealers that are participants of a registered clearing agency8 to take action to "close-out" failure-to-deliver positions ("open fails") in threshold securities that have persisted for 13 consecutive settlement days.9 Closing out requires the broker or dealer to purchase securities of like kind and quantity. Until the position is closed out, the broker or dealer and any broker or dealer for which it clears transactions (for example, an introducing broker)10 may not effect further short sales in that threshold security without borrowing or entering into a bona fide agreement to borrow the security (known as the "pre-borrowing" requirement).

IV. Threshold Securities
A. The Basics
1. What is a Threshold Security?
Threshold securities are equity securities that have an aggregate fail to deliver position for:
five consecutive settlement days at a registered clearing agency (e.g., National Securities Clearing Corporation (NSCC));15
totaling 10,000 shares or more; and
equal to at least 0.5% of the issuer's total shares outstanding.16

Threshold securities only include issuers registered or required to file reports with the Commission ("reporting companies").17 Therefore, securities of issuers that are not registered or required to file reports with the Commission, which includes the majority of issuers on the Pink Sheets,18 cannot be threshold securities. This is because the SROs need to look to the total outstanding shares of the issuer in order to calculate whether or not the securities meet the definition of a "threshold security." For non-reporting companies, reliable information on total outstanding shares is difficult to determine.------------------------------------------------------------

Once HESG updates its information, and moves from a non-reporting to reporting status, it will no longer be exempted from the Threshold Secuirities list, assuming that a) A fail to deliver position was actually recorded at a registered clearing agency. b) more than 13 consecutive settlement days have expired. When will the truth come out? Fortunately, HESG has provided a press release on the matter issued on December 14, 2009 and indicated that the issue(s) will be resolved January, 2010. Click here for link---> http://ih.advfn.com/p.php?pid=nmona&cb=1263042289&article=40816875&symbol=NO%5EHESG

"Health Sciences Group Company Update INDIAN HARBOR BEACH, FL -- (Marketwire) -- 12/14/09 -- Health Sciences Group, Inc (PINKSHEETS: HESG) would like to address the following concerns and updates to the current and future shareholders: We would like to address and clarify a few questions and updates regarding recent and future activities of the Company 1. The Company is making application to Pink Sheets, to apply for its disclosure and news service. Once approved and cleared through Pink Sheets compliance, along with an attorney letter in respect to such documents, the company will be disclosing all issues pertaining to the business of Health Sciences Group, including up to date financials and ISSUED, OUTSTANDING and AUTHORIZED shares. Upon approval the Company will be Pink Sheet Current tier. Hopefully this will take place in January 2010. 4. The Company has no intentions of doing a reverse stock split 5. The Company does have intentions of increasing our authorized shares for purposes of acquisitions, this number is yet to be decided 6. Due to the situation with a drop in our stock price and the situation surrounding TD Ameritrade and Scottrade our acquisitions of two Montana medical marijuana facilities have been set aside until we resolve the stock trading issues. However there are now 14 states and Washington, D.C. which allow certain opportunities for the Company to establish a presence within the medical marijuana industry in each of the fifteen which we are investigating and exploring And we will be adding a company updates section to our website by next week 8. We have in fact retired 2.0 billion restricted common shares. This does not affect the authorized share count"

Additional commentary: With or without a Naked Short or Fail To Deliver position, given a low float and/or outstanding shares along with future revenue streams then HESG could be considered extremely undervalued. Once HESG provides the marketplace with the necessary information to be able to make an informed decision, HESG should see rapid price per share appreciation. It would be in the best interest of HESG to follow through on the December 14, 2009 press release as HESG appears to have a desire to acquire ongoing entities through the use of restricted and/or preferred shares. The sooner HESG clarifies the share structure, the faster it will be able to make and complete these acquisitions.

For additional information regarding short sales, naked short sales, fails to deliver, and systemic risk, please review the following link which will require approximately one hour of your time. Next review in sequential order the SEC document written in July 2009, followed by The Federal Reserve paper on systemic risk. Best of luck to you and all.

Finally, I'll leave you with this parting information....

"Indeed, while many penny-stock investors think there's something fishy if not downright illegal about market makers shorting stocks, the SEC says it's legit. In fact, SEC officials say shorting by market makers is often necessary to keep the markets operating smoothly. Why? Market makers are supposed to sell a stock when investors want to buy it. When there's a big buying demand, a market maker may have to go short and borrow shares in order to a produce a ready supply of stock. "I don't know how you can be a market maker without going short," says Knight's Dorsey."Read more: It's the @#$%! Market Makers at SmartMoney.com http://www.smartmoney.com/investing/stocks/Its-the-Market-Makers-4806/#ixzz0c7mPYmWt



fun

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Darkside Of The Looking Glass
http://www.businessjive.com/

SEC Takes Steps to Curtail Abusive Short Sales and Increase Market Transparency
http://www.sec.gov/news/press/2009/2009-172.htm

SECURITIES AND EXCHANGE COMMISSION 17 CFR PARTS 200 and 242 [Release No. 34-60388; File No. S7-30-08] RIN 3235-AK22 Amendments to Regulation SHO
AGENCY: Securities and Exchange Commission. ACTION: Final rule. http://www.sec.gov/rules/final/2009/34-60388.pdf

Federal Reserve Bank Of Cleveland
Policy Discussion Paper Number 27, August 2009
On Systemically Important Financial Institutions and Progressive Systemic Mitigation
James B. Thomson
http://www.clevelandfed.org/research/policydis/pdp27.cfm

Fails to Deliver
http://failstodeliver.com/default.aspx


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