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It won't be long before we get the next financial filing to see how bad the cash burn is after that desperate property purchase, sale, leaseback deal to refinance the defaulted debt as a long term liability. They were paying nothing on that debt previously but as a result of that deal must now pay on it monthly. Meanwhile the regulation "A" offering that was first qualified in October 2022 still isn't viable. The offering was requalified in November 2023 with amendments. Mr. Leon further added, “I have been questioned often about what our plans are to consolidate the stock and I can report that there are no near term plans to do so. I can only see that happening in conjunction with an up-listing when that time comes, and I believe it will come, based on our much stronger financial position, fantastic opportunities, and our vast experience in the addiction treatment industry.”
Pay attention to what Shawn Leon said in July 2023, "..."I have been questioned often about what our plans are to consolidate the stock and I can report that there are no near term plans to do so. I can only see that happening in conjunction with an up-listing when that time comes, and I believe it will come,..." Now the statement in the February 6th 2024 press release about "...financing and up-listing in the coming weeks... Now when Glacial Shawn mentions something to be done in weeks just say months, many months. 🤣
It takes FOREVER for Shawn Leon to do anything once he announces it but time must be running out because he has packed the debt right back on after the refinance fiasco. How bad it is should come with the annual which should be release in the next couple of weeks. My scenario for what he is going to eventually do in post# 49524. I believe that this will be trading at $0.0001 when he finally announced the plan and after the reverse split but it won't be the bottom because this will get hammered post split by the regulation "A" offering whos shares will be immediately tradable.
Bubae
Re: N-13 post# 49520
Wednesday, January 10, 2024 2:23:58 PM
Post# 49524 of 49781
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173601160
So I am looking for a 1:2400 reverse split because once announced you can bet it will be trading at $0.0001 in a flash. No one will want to hold these shares into a split knowing that it is a setup for the offering. This is why you should do the split first in my opinion. 🙄 So I'm thinking 1: 2400 gets the new price to $0.24 then sell the units, or really shares, priced at $0.12 for the discount to market. This will also fit Shawn Leon's narrative of an uplist effort in the event of a reverse split. He will need to maintain a trading price above a penny for that to have a chance.
Ethema Executes Two Real Estate Transactions and Major Debt Repayment
July 17, 2023 09:34 ET
https://www.globenewswire.com/en/news-release/2023/07/17/2705721/0/en/Ethema-Executes-Two-Real-Estate-Transactions-and-Major-Debt-Repayment.html
Ethema to Present an Update at the Emerging Growth Conference on February 8, 2024
February 06, 2024 08:00 ET
https://www.globenewswire.com/en/news-release/2024/02/06/2824259/0/en/Ethema-to-Present-an-Update-at-the-Emerging-Growth-Conference-on-February-8-2024.html
At these meetings, there was unanimous support for the Company’s growth plans supported by financing and up-listing. The Company hopes to identify which partners it will go forward with for the financing and up-listing in the coming weeks.
The SEC is widening its war on toxic funders
Published on August 24, 2021
https://www.linkedin.com/pulse/sec-widening-its-war-toxic-funders-steve-taylor/
...it also increasingly utilized qualified Reg A offerings to acquire free-trading stock which they then dumped into the market without disclosure....
..This was a significant concern, as Reg A shares are immediately free-trading...
...To make money on their toxic convertible loan, these funders require volume to dump into. Lots of volume, because they have a lot of stock to sell....
Happy Friday GRST longs
Maybe 2024 is the year : }
Same old song (almost true) ... Nothing has change in years (Not really, operation did grow, and debt better structured) ... and it won't (what do we know???) ... Because an incompetent CEO (If that was, he would have quit trying a long time ago) ... End of story (Who knows, but if you think so sell your shares whatever you still can get) ... As our big specialist (who forecasted disaster for years), you, I and he do not know how it will turn out (50-50) and knowing wha we do ... or do not ... all what one can say is that ''It's end of story,'' or ''There are reasons to be hopeful''' ... WE SHAL SEE!
Same old song and dance. Nothing has changed in years and it wont due to a very incompetent CEO. End of story.
As I often said, This is a highly speculative stock considering the lack of information we have (50% chance of having to right it off) but it's also an operating compa ny reporting as do responsible companies (50% of chance to to see pps explose upward). The foollowing justifies the above:
Revenue : $ 5,500,00
Market cap : $ 1,500,000
PE ratio : 0,87
EBIDATA (Earnings Before Interest, Taxes, Depreciation, and Amortization): $ 773,500
Debt To Equity : -129.51%
THE ISSUE IS OBVIOUSLY THE DEBT causing our current PPS to reflectt a multiplier more or less 0,35.
Considering the above, this justifies saying that this is a good but high risk BET (best case:a high risk investment).
Stick a fork in it rich boy. This is done.
It can come back to life, no ceo does it on purpose.
Why would a CEO throughly destroy this stock.This thing has been dead since the A offering.Talk about shooting yourself in the foot.Every company that that tries that dies instantly.
3 YEARS AND ONE HALF AGO I BOUGHT MY FIRST SHARES (ONLY HAD AND STILL HAVE 2 OTC STOCKS) IN VIEW OF TRADING TILL I COULD HAVE SHARES AT $0 COST.
2020-10-18 Achat 0,00490
2020-10-18 Achat 0,00560
2020-10-21 Vendre 0,00670
...
Never made it to $0 cost but went up to many millions shares at a net cost quite below 0,0015.
Still a loser but I believe it is worth to wait some more believing as I often said, there is a chance (50%) that this become a money maker.
Worst case (50%) I lose a few thousands $$$ that will not change my life but, I then will have enjoyed the ride playing the game herein.
I just hope Leon will some day support our faith by being somewhat more transparent about how he plans to succeed but honestly, I do not lose sleep over that.
If I decide to quit before I see the end of the story, I probably will be able to cut my current book loss by 1/3 or so.
GLTA!
This business model will never create any value with zero reasons to trade outside the trips. Rich boy should just retire with all the bagholder's money.
I think people start bashing because they are impatient, I still beleive in the company. I was in a stock and people bashed it all the time but I was patient and it made big move 2 yrs. ago
I knew you would not understand the eating cookies story... of LOTB (BEL20 since yesterday)
No problem man, life is more than being smart. 😉
have a great weekend! X
Only if you love fiction.
Great story and very uplifting, it's us hope.
Hahaha... thank you for doing my accounting.
I know it must hurt people like you and B that lost all their money in the markets and only have one thing left to do... bashing stocks that made them go BK.
It's sad. But pick up your life and try making something out of it.
12 years ago I started with 10k euro in the crypto market... there is a lot possible in 10 years. I even made money by eating cookies (LOTB) 😃. Good luck.
Kind regards and let me know if I can help you. ❤️
Hey, lova. ❤️ You should really take a self-inventory sometime.
Using the very tactic you like to use on others, I checked out your earlier GRST post history.
I made 300k dollar on GRST
''Going back to December 2021 I find a post where I mentioned a reverse split''
Ha!, Ha!, Ha! ... Keep saying it, one day you may even be right on something (LMHO)
Now I understand why you are BANKRUPT! 😄
What the F are saying? 🤡
300k profit in 2021
Now 116k invested at avg 0.001
O yeah, what a LOSER I am 😂
So you are down $69K on this trash at the moment yet you have made $300K trading this it while they diluted it. OK 🙄 So in one respect you are down despite what I have been posting here for more than two years, yet on the other hand you are so clever you have managed to bank $300K on your flips while heavily promoting this all the way down? My prediction is that you will be down more than $100K when the split is announced. 😆 I made 300k dollar on GRST. Today I'm holding 116,000,000 shares at avg 0.001.
Hi loverboy 😘 looks like you can't miss me 💋💋
Is Bubae not giving you enough attention? 💘💕
You go look up and see where I bought GRST in 2021 and where I sold and write a paper about it.
I made 300k dollar on GRST. Today I'm holding 116,000,000 shares at avg 0.001.
I post 1 or 2 post a day bc I like it and hate losers like you posting bs on boards all day on stocks you don't own.
You bought OMID for $1500 at 0 05, a stock that is death with a 100% spread and ZERO volume!!!
Really, man, think about it... who is the fool here.
If GRST goes to zero, so be it. I don't care. But you would be heartbroken 💔 if $GRST goes up and people make money. Sick!
Really, man, you are not only a fool! You are sick. Go get some help.
Meanwhile $BTC hitting $67000 I hope you have some.
The only fools I see here are you and a few other clueless cheerleaders.
The only possible way at this point to make the reg A offering viable is to do a R/S. They can no longer dilute either with the anemic volume and interest. What don't you understand?
I'm the fool? 😆🤣😂😅
Who has been holding this crap since the summer of 2021 and pumping it all the way down. Holy crap, talk about dilution and denial. People looking at this really should look at your and Paul's post history here for the past few years. I stand by mine.
No one can tell you when they will split the stock so stop wit the BS. I have been talking about the potential for reverse split since they dumped right at 1 billion new shares is Q3 and Q4 2021 taking this into the trips for the start of 2022. Maybe if Shan Leon had done what he should have done he wouldn't have had the debt go into default. Maybe he wouldn't have needed to hand over their best performing wholly owned asset in the Canadian property to Leonite. Maybe the could have purchased the treatment center property like they said instead of the crazy property purchase, sale, lease back deal to refinance the mess into a long term liability that now must be paid on monthly, On and On...
Now they continue to borrow because apparently Shawn still hasn't come up with a scheme to get that regulation "A" offering sold. Once he does however you can bet there will be a split. Shawn Leon moves at a glacial pace and by the time he does act the benefit is largely lost. That will be the case for this regulation "A" offering as well in my opinion. By the time he makes it viable it will do little other than retire some debt instead of something constructive for shareholder value.
Going back to December 2021 I find a post where I mentioned a reverse split. That post shows yet another example of how dishonest the people behind this are. The FAQ page release July 27th and a response to the question of dilution. They state that the end is coming soon and that it has been on the decline in the previous three months. But that wasn't the case was it, in fact they went on to dump right at 1 billion new shares in Q3 and Q4 2021 after saying that it would end soon.
Bubae
Member Level
Re: StockLogistics post# 40286
Friday, December 24, 2021 4:20:21 PM
Post# 40293 of 49755
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=167252620
The company really should answer some questions about previous comments. One about the reverse split issue in light of the recent share structure destruction and the debt amount of debt that is currently eligible.
Another would be about the about the statement that the dilution would stop soon in the July 2021 document. I bet a lot of traders have banked losses based on that statement believing that they might catch a bottom.
Maybe the comment was based on the assumption in the quote. But to your point, they continue to borrow funds to operate because net earning even with the addition of ARIA isn't cutting it.
FAQ page release July 27, 2021
https://ethema.wpengine.com/?page_id=683
When will the debt be brought under control and when will the dilution stop?
"We cannot tell yet how much more conversion there will be but the rate and amount are in a dramatic decline. We do see an end coming soon since that has been the direction for much of the past three months."
For the quarterly period ended March 31, 2021
https://sec.report/Document/0001721868-21-000319/
Authorized and outstanding
The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share.The company has issued and outstanding 2,262,849,130 and 2,027,085,665 shares of common stock at March 31, 2021 and December 31, 2020, respectively
235,763,465 new shares for Q1 2021
For the quarterly period ended June 30, 2021
https://sec.report/Document/0001721868-21-000524/
Authorized and outstanding
The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding 2,601,515,456 and 2,027,085,665 shares of common stock at June 30, 2021 and December 31, 2020, respectively. 338,666,326 shares for Q2
338, 666,326 increase for period Q2 2021
For the quarterly period ended September 30, 2021
https://sec.report/Document/0001721868-21-000835/
Authorized and outstanding
The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding 3,111,047,811 and 2,027,085,665 shares of common stock at September 30, 2021 and December 31, 2020, respectively.
509,532,355 new shares for Q3 2021
For the fiscal year ended: December 31, 2021
https://sec.report/Document/0001903596-22-000192/
a) Common shares
Authorized and outstanding
The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding 3,579,053,805 and 2,027,085,665 shares of common stock at December 31, 2021 and December 31, 2020, respectively.
468,005,994 new shares for Q4 2021
So you are talking about being "accurate" and in the same sentence you say you have been saying FOR 3 YEARS GRST is going to do a RS.
LMFAO 😂
You should take a minute and think about the 3 years of posting on the GRST board and the complete fool you have become.
O right, and yes, you did say GRST will do a promotion to sell the A-offering at 0.0012.
But that was also a lie it seems.
You have been wrong for 4 years. Give it up.
Now try to be accurate. I was actually calling for $0.24 post split. 😄 Now considering that they should have split the stock when they sent it into the trips with nearly 1 billion new shares in Q3 and Q4 of 2021. Shawn Leon is more likely to just doddle along with more colorful refinancing and borrowing. The hole just keeps getting deeper as they convert defaulted debt into long term liabilities that must now be repaid monthly. They however fool no one but themselves because this treatment center business is a very expensive business model returning nothing to Ethema Health (GRST) shareholders. Now consider that the regulation "A" will need room to work and those who subscribe will likely get those shares at a 50% discount to market. Also, Ethema Health wants to up-list so they need to keep the price above a penny. I have been saying this for a while, I would expect a 1:2400 reverse split to get the price up to $0.024 after the reverse split announcement drives the price to $0.0001. Everyone will know that the dilution will follow so $.0001 is no longer the bottom.
Bubae
Re: None
Tuesday, February 13, 2024 2:29:51 AM
Post# 49692 of 49752
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173832386
Yeah! Look at all the new people here 🤣 what a waste of your time...
GO GRST even Bubae says this will hit 0.0012 anyway and soon.
That's 300% profit!
It will take years for rich boy to create enough value to move this out of the trips considering he could care less about the shareholders. Incompetence here is on another level even for the OTC..
Those new to this ticker do not know the history and the characters working the schemes here. Do you have an explanation as to why the folks operating the OTC markets had a "promotion risk" icon to this company's profile? It is gone now, what is up with that. It will be interesting so see what Ethema Health does next and to see how badly retail gets beaten off the next promo.
I shall from now on seriously reduce my answering to your borring continuous disparaging obviously justified by an hidden agenda of yours. No doubt you know the history of the company (as we all do) but you know as much as any about what future lies ahead. Enjoy your crappy posting and i wish you do end up getting a life and get over your unexplained frustration.
Another 450 words without saying anything... wawot 🤑
For those who are saying company is a scam, since you care so much for shareholders, the right thing would be is to try to get scam delisted.
The scary information is all in the company's own print. Shawn Leon needs to do two things, find a new story that convinces current shareholders to hold. second, a good enough story that convinces new traders will chase. What does the OTC markets people know that isn't obvious yet to everyone that would prompt the promotion risk icon?
See that 8K announcing the revolving credit line of $1 million. Under pledge and security agreement, exhibit "A" labeled "collateral" they appear to be committing all assets including that of American Treatment Holdings, Inc (ATHI) which is the holding company for the shares of the Evernia treatment center. Now will they be paying off the lenders who have debt secured by options against the direct shares of ATHI?
One of Shawn Leon's favorite tactics is to find new borrowed funds to pay off existing debt and announce in a press release that they paid off the debt. This is what he did with the crazy property purchase, sale, leaseback deal last summer where essentially refinancing the defaulted debt over a 20 year period resulting is a million in expenses. Now that defaulted debt that they weren't paying on must be serviced every month. Traders chased that up to $0.0007 before once again realizing that they had been duped. He did this with the large Leonite note of June 2022 which eventually went into default and again the hapless chased the news. It really is fun to watch Shawn Leon dig this hole even deeper and still not be able to raise any funds off that regulation "A" offering. 🤣
FORM 8K
https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0000792935/000190359624000061/grst_8k.htm
TEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Testing 123, LLC (“Testing”)
On February 1, 2024 Ethema Health Corporation, American Treatment Holdings Inc, and Evernia Health Center LLC (the “Company” or “Companies”) entered into a revolving line of credit agreement (“ Agreement”) with Testing. The term of the Agreement is two years and the maximum amount that may be drawn down is $1,000,000.00.
Pledge and Security Agreement
https://www.sec.gov/Archives/edgar/data/792935/000190359624000061/ex10_03.htm
Wow man great job. So tell me... why do you post this to me?
O pure ❤️ you couldn't miss me... 🥰
You know how META started?
You know how AAPL started?
You know how AMZN started?
LOL.
GRST - If you where "Defame" as he is....How would you Feel???....
''LEON HAS GOOD CREDENTIALS And Impressive Background!....''. Granted but now he has an impressive challenge ahead of him. Let's see but remain patient.
P.S.: A little transpârency on his part should be more than welcome. Unfortunately Leon do what he does behind a total blackout and this attitude is deploreable.
The big scare tatic is on ... SCAM. not impress
only someone reading here for the first time ever would not do that. this stock went from a company that practically faile, became a great trading toy for few yesr at the beguinning of the 20's, the saw if operation resurect, carrying a very large debt. just looking at that, someone would not be very smart to accept that this is currently a very high risk bet currently.
On the otherhand, the company does currently duly report running a real business that Leon keep trying to grow. At current price, only someone not understanding that a good future could be will be affirmative that this is a failure in the making. that person may very well be justified to risk few $$$ understanding the risk and betting on it, considering current pps.
future will tell and none of us knows for sure if leon will fail (write off) or succeed (potential great return). Only having a crystal ball can justify one to be pessimistic or optimistic ... unless someone has an hidden agenda creating a whisful thinking involvig desaster.
That's why I say it's a 50-50 BET ... only 2 alternatives Failure or success. Place you bets.
GRST - SO WHAT???*** Mr. Shawn E Leon -PRESIDENT, CHIEF EXECUTIVE OFFICER, CFO & DIRECTOR
***Shawn E. Leon is a Canadian businessperson who has been the head of 8 different companies. -Presently, he holds the position of President, Chief Executive Officer, CFO & Director at Ethema Health Corp. Mr. Leon is also on the board of Sparta Capital Ltd.
In the past he was President of Leon Developments Ltd., President for Port Carling Inn Developments Ltd., President for Locks Developments Ltd., President at JLeon Developments Ltd., President at 1816191 Ontario Ltd., President of 1816191 Ontario Ltd. and President of Greenestone Clinic Muskoka Inc.
Shawn E. Leon received an undergraduate degree from Wilfrid Laurier University.
*** SHAWN LEON HAS GOOD CREDENTIALS And Impressive Background!....
My drama? 🙄 The history has defined Shawn Leon with all the debt from two failed treatment centers and the current treatment that requires Ethema Health (GRST) to accumulate more debt to support the real investors who have claim to direct shares of the treatment center. This really is a scam in my opinion, with these deals supporting a subsidiary with a separate shares structure. Shawn Leon was desperate after closing the other West Palm location and hooking up with Lawrence (LARRY) Hawkins has defined the operation since. Talk about making out like a bandit, the guy got bailed out of a costly legal situation, still owns 25% of the treatment center, and draws a monthly salary. ...may be after all Leon will turn out to be smarter than who you want us to believe he is. FUTURE WILL TELL. Turn the dices ... LOL1 My view that this is a scam stems from the fact that the purpose of Ethema Health (GRST) is to fund a treatment center operation that was structured as its own business entity with share structure that is largely held by others. Debt for start-up buildout was funded by Ethema shareholders those who hold options for direct shares of American Treatment Holdings, Inc, (ATHI) the holding company for the shares. 25% of the shares of ATHI is still held by original seller Lawrence (LARRY) Hawkins. Colorful history there including a $1.3 million judgement against the treatment center entity that Ethema bought into that included Peace of Mind Counseling Services. Talk about coming out smelling like a rose. If Ethema Helth (GRST) has had to spend so much money building out this treatment center, you have to ask what was sold to them to begin with.
Re: janetcanada post# 49263
Friday, November 24, 2023 9:07:22 AM
Post# 49269 of 49737
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173287955
justified by historic stories is all that exist. a real pitty.
with you drama, disaster, failures, ... justified by historic stories is all that exist. a real pitty. you are either a generally frustrated person or someone trying to address a bad personal experience withy Leon. do not take me wrong, you may be hitting one of your wishful targets since you shoot everywhere but, who knows, may be after all Leon will turn out to be smarter than who you want us to believe he is. FUTURE WILL TELL. Turn the dices ... LOL1
Low cost toy? Been a toy since a penny? Losses come much quicker trading a this level. When a reverse split is announce here my BET is that it hits $.0.0001 immediately. This is because most potential buyers will understand that what comes next is the dilution from the regulation "A" offering. One doesn't doesn't need to look around much to find other tickers without this obvious baggage. Most of these stinky pinks aren't carrying more than $4 million in defaulted debt. The balance on those defaulted series "N" notes as of September 30th was $4,186,078. Thursday, January 21, 2021 9:55:58 AM, Post# 23678 ''GRST can be used as a LOW-COST TOY to play with for day-trader-type GAMBLERS'' ... Not sure this is ''PUMPING THE ENTIRE WAY''.
For the quarterly period ended September 30, 2023
https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0000792935/000190359623000912/grst_10q.htm
Series N convertible notes
Between January 28, 2019 and June 11, 2020, the Company closed several tranches of Series N Convertible notes in which it raised $3,229,000 in principal from accredited investors through the issuance to the investors of the Company’s Series N convertible notes, in the total original principal amount of $3,229,000, which Notes are convertible into the Company’s common stock at a conversion price of $0.08 per share together with three year warrants to purchase up to a total of 52,237,500 shares of the Company’s common stock at an exercise price of $0.12 per share. Both the conversion price under the Notes and the exercise price under the warrants are subject to standard adjustment mechanisms. The notes matured one year from the date of issuance.
The series N convertible notes matured and are in default. The Company is considering its options to settle these notes.
Honestly, there are much better bets out there. Anyone who has ever experienced a regulation "A" offering dump knows better than to touch this. Typically the company splits the stock then comes the offering. Not Shawn Leon, he files for the regulation "A" offering in October 2022 and it has hung over this stock ever since. Why do you think there is a promotion risk added under the security details tab for this stock on the OTC website? I don't see anywhere in the description for this symbol that say this stock is a good bet. I have been going after another trash stock that we know is actively running infomercials to move new shares that doesn't even have this symbol attached but it certainly should. That one has zero revenue, zero full time employees and has been heavily promoted into heavy debt conversion activity. Something has triggers that "promotion risk" icon to be added to this stock and it isn't obvious yet, but I believe you all will be finding out what that is soon. My BET is that it won't be good for retail traders of this stock.
Now that the regulation "A" offering has been qualified for the second time last November and pretty much tells everyone what is to come to make it viable. Most traders aren't so stupid since It is worse than handing over shares to a toxic lender these days since the SEC has been going after the toxic share dumps. These regulation "A" shares will be sold at a steep discount to market and Will be immediately tradable.
OTC Website Security Deatils
https://www.otcmarkets.com/stock/GRST/security
https://www.otcmarkets.com/files/OTC_Markets_Group_Policy_on_Stock_Promotion.pdf
Publicly Identify Securities Being Promoted
We are working to publicly identify securities that are the subject of stock promotion by placing a
“promotion” risk flag next to the stock symbol on our websites, including otcmarkets.com, and our
market data feeds. This promotion flag is designed to provide an alert regarding the potential risks
associated with trading the security. Coming First Quarter 2018.
The SEC is widening its war on toxic funders
Published on August 24, 2021
https://www.linkedin.com/pulse/sec-widening-its-war-toxic-funders-steve-taylor/
...it also increasingly utilized qualified Reg A offerings to acquire free-trading stock which they then dumped into the market without disclosure....
...This was a significant concern, as Reg A shares are immediately free-trading. That makes it much more attractive to many investors compared to restricted securities sold under Reg D exemptions, but it also is definitely more attractive to those looking to make a quick buck by breaking the law. This case demonstrates the SEC may not have been looking hard enough at the Reg A market for fraud, as certain financiers and funders have been scalping stock without disclosure in the filings....
What Toxic Financing Is And How Public Companies Can Avoid It
PUBLISHED
MAR 16, 2023 10:31AM EDT
https://www.nasdaq.com/articles/what-toxic-financing-is-and-how-public-companies-can-avoid-it
Additionally, convertible note issuers with a track record of driving toxic financing deals generally limit the holding period on their notes to six months for SEC-reporting companies. The Securities Act of 1933 requires all unregistered securities acquired directly from the issuer to be held for at least six months, which is why a six-month timeframe is often given as the holding period on toxic debt.
Press Release
Stock Issuers & SEC Taking the Fight to ‘Toxic’ Lenders
by Howard Mulligan August 15, 2023 in Financial Services
Agency bringing actions against convertible noteholders for failing to register as dealers
https://www.corporatecomplianceinsights.com/sec-toxic-lenders/#:~:text=Since%20early%202020%2C%20the%20SEC,required%20by%20the%20Securities%20and
In March 2022, a Florida district court dealt with a defendant that purchased convertible notes of over 100 microcap issuers, converted the notes into shares of stock at massive discounts and then dumped over 17.5 billion shares into the public market, generating over $21.5 million in profits.
In August 2022, the SEC initiated an action for failure to register and then entered into a settlement with a noteholder that, from 2016-2020, purchased approximately 250 convertible notes and profitability sold the converted shares. In the settlement, the defendants agreed to (1) pay disgorgement and prejudgment interest of $8,390,601.27, (2) the entry of a civil penalty of $810,307 and (3) a five-year suspension from acting as a penny-stock dealers.
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