Greenfield Farms Food Inc. (fka GRAS)

[starkd748]

What Epic Failed investment this was lmfao

[starkd748]

This pos is dead lol

[starkd748]

At this moment this pos doesnt trade and will never trade...

[starkd748]

Hahahaha we were riiiight what an Epic Fail shiiiity shiit stock lol

[otcsource]

UNITED STATES OF AMERICA
Before the SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 86703 / August 19, 2019

ADMINISTRATIVE PROCEEDING
File No. 3-19285

In the Matter of chatAND, Inc., DTS8 Coffee Company, Ltd., and

Greenfield Farms Food, Inc.,

Respondents.
ORDER MAKING FINDINGS AND
REVOKING REGISTRATION OF
SECURITIES PURSUANT TO
SECTION 12(j) OF THE
SECURITIES EXCHANGE ACT OF
1934 AS TO GREENFIELD FARMS FOOD, INC.

I.
The Securities and Exchange Commission (“Commission”) deems it necessary and appropriate for the protection of investors to accept the Offer of Settlement submitted by Greenfield Farms Food, Inc. (“GRAS” or “Respondent”) pursuant to Rule 240(a) of the Rules of
Practice of the Commission, 17 C.F.R. § 201.240(a), for the purpose of settlement of these proceedings initiated against Respondent on July 29, 2019, pursuant to Section 12(j) of the Securities Exchange Act of 1934 (“Exchange Act”).

II.

Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over it and the subject matter of these proceedings, which are admitted, Respondent consents to the entry of this Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to Greenfield Farms Food, Inc. (“Order”), as set forth below.

III.
On the basis of this Order and Respondent’s Offer, the Commission finds that

1
:
1. GRAS (CIK No. 1440517) is a defaulted Nevada corporation located in
Dallas, Texas with a class of securities registered with the Commission under Exchange Act Section 12(g). As of July 22, 2019, the common stock of GRAS (symbol GRAS) was quoted on OTC Link (formerly Pink Sheets) operated by OTC Markets Inc., had six market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2-11(f)(3).
2. GRAS has failed to comply with Exchange Act Section 13(a) and Rules
13a-1 and 13a-13 thereunder because it has not filed any periodic reports with the Commission since the period ended March 31, 2017.
IV.

In view of the foregoing, the Commission deems it necessary and appropriate for the protection of investors to impose the sanction specified in Respondent’s Offer.

Accordingly, it is hereby ORDERED that:
Pursuant to Section 12(j) of the Exchange Act, the registration of each class of Respondent’s securities registered pursuant to Exchange Act Section 12 be, and hereby is, revoked. The revocation is effective as of August 20, 2019].

2
For the Commission, by its Secretary, pursuant to delegated authority.
Vanessa A. Countryman Secretary



1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any other person or entity in this or any other proceeding.

2 This Order applies to all classes of Respondent’s securities registered pursuant to Section 12 of the Exchange Act, whether or not such securities are specifically identified by ticker symbol or otherwise in this Order.

[jhnvtjll]

It's a good way to offset gains so I don't have to pay capital gains taxes.

I won't be writing off GRAS this year. I have other older dead stocks to write off first.

[C.G.B Spender]

Yup, That tax write off will be something else, Won’t it?

[jhnvtjll]

Crazy how correct I was.

jhnvtjll   Thursday, 07/18/19 02:24:50 PM

GRAS summer to remember.

[jhnvtjll]

But I was right first.

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=123604648

[C.G.B Spender]

Right, But in THIS case.... I was right all along

[jhnvtjll]

I can say that about every pink stock and get it right 95+% of the time. It's much harder to be right about a pink stock that will make people money.

So I was correct in calling this a "scam" and saying everyone who bought would "lose their money"?

[C.G.B Spender]

So I was correct in calling this a "scam" and saying everyone who bought would "lose their money"?

Maybe that's why

[Renee]

GRAS registration revoked:

https://www.sec.gov/litigation/admin/2019/34-86703.pdf

[rs99]

08/20/2019 08:43:48 12(j)Registration Revoked by SEC 08/20/2019 08:44:00
GRAS
Greenfield Farms Food, Inc. Common Stock

[otcsource]

Close to the bottom of the page "in RED"

[C.G.B Spender]

It’s right there in red....

[tundra1]

Otc Where, I do not see how Green Field played in to to what you copied and pasted.

[otcsource]

Greenfield Farms went through some issues with debt.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 0:17-cv-62255
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.

IBRAHIM ALMAGARBY and
MICROCAP EQUITY GROUP LLC,

Defendants, COMPLAINT
Plaintiff, Securities and Exchange Commission (the “Commission”), alleges as follows:

I. INTRODUCTION
1. This case involves the buying of more than $1.1 million of convertible debt of
microcap (i.e., penny stock) issuers and the subsequent selling of more than 7.4 billion shares of
the microcap issuers’ stock into the market by Ibrahim Almagarby and his wholly owned and
controlled business entity, Microcap Equity Group LLC (collectively, “Defendants”), without
either registering with the Commission as a dealer or being associated with an entity that was
registered with the Commission as a dealer.
2. Between January 2013 and July 2016, Defendants, as part of a regular business,
engaged in the buying and selling of securities for Defendants’ own accounts. Defendants
purchased from debtholders the aged debts of various microcap issuers of securities.
Contemporaneously, and as part of their purchase of the aged debt, Defendants obtained
agreements with the issuers permitting Defendants to, at their discretion, convert the debt into
Case 0:17-cv-62255-XXXX Document 1 Entered on FLSD Docket 11/17/2017 Page 1 of 10

2 shares of the issuers’ common stock. Defendants deposited these shares (once converted from
the debt) into their brokerage accounts and sold significant numbers of them into the market.
Finally, Defendants deposited the net proceeds from the stock sales into their bank accounts.
3. Defendants’ gained $1,474,901.63 from selling the shares, which represents the
difference between their known costs of acquiring the convertible debt securities and their net
proceeds obtained from converting the debt into shares and then selling the shares into the
market.

4. By virtue of their conduct, Defendants violated Section 15(a)(1) of the Securities
Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78o(a)(1)].

5. Additionally and alternatively, Ibrahim Almagarby is a controlling person of Microcap Equity Group LLC under Exchange Act Section 20(a) [15 U.S.C. § 78t(a)] and
Ibrahim Almagarby is therefore liable for Microcap Equity Group LLC’s violations of Section
15(a)(1).
6. Unless enjoined, Defendants are likely to commit such violations in the future.
Among other relief, Defendants should be enjoined from future violations and should be ordered
to disgorge, with prejudgment interest, any ill-gotten gains obtained as a result of their
violations, and ordered to pay an appropriate civil money penalty.
II. DEFENDANTS
7. Ibrahim Almagarby, age 27, on information and belief, resides in Tamarac,
Florida.

8. Microcap Equity Group LLC is a Florida limited liability company formed on
January 8, 2013, and is wholly owned and controlled by Ibrahim Almagarby. On information
and belief, Microcap’s principal place of business is in Tamarac, Florida.
Case 0:17-cv-62255-XXXX Document 1 Entered on FLSD Docket 11/17/2017 Page 2 of 10
3
III. JURISDICTION AND VENUE

9. This Court has jurisdiction under Exchange Act Sections 21(d), 21(e), and 27
[15 U.S.C. § 78u(d), 78u(e), and 78aa]. In connection with the transactions and acts alleged
herein, Defendants, directly or indirectly, made use of the means and instruments of
transportation and communication in interstate commerce and of the mails.
10. Ibrahim Almagarby, during the relevant period, resided in the Southern District of
Florida. Microcap Equity Group LLC is a Florida limited liability company, and certain of the
transactions and acts alleged herein took place in the Southern District of Florida. Venue
therefore is proper in this district under Exchange Act Section 27 [15 U.S.C. § 78aa].
IV. FACTUAL BACKGROUND
A. Defendants Bought and Sold Large Volumes of Microcap Issuer Securities as
Part of their Regular Business.
11. Between January 2013 and July 2016, Defendants bought more than $1.1 million of convertible debt of 39 different microcap issuers and subsequently sold more than 7.4 billion
shares of the microcap issuers’ stock into the market.
12. Defendants purchased the convertible debt securities through agreements that
granted Defendants the right to convert the microcap issuers’ debts into shares of the issuers’
common stock. Defendants frequently exercised all or some of their conversion rights soon after
closing on the purchase of the convertible debts and then began selling the resulting shares into
the market using accounts that Defendants maintained at various brokerage firms.
13. Defendants’ buying and selling of securities is illustrated by the following
example:
Case 0:17-cv-62255-XXXX Document 1 Entered on FLSD Docket 11/17/2017 Page 3 of 10
4
a. On or about July 1, 2016, Defendants acquired $20,184.10 in aged debt
issued by Halitron, Inc. (“Halitron”), a microcap issuer. Defendants
negotiated a debt purchase agreement to acquire the aged debt from the
debtholders at face value.
b. Defendants contemporaneously negotiated an agreement with Halitron
whereby Halitron agreed to permit Defendants to immediately convert the
debt into shares of Halitron common stock.
c. On July 6, 2016, Defendants converted the debt into 25,230,125 shares of
Halitron stock and deposited the shares into a brokerage account that
Defendants maintained at a third-party brokerage.
d. Between July 22, 2016 and August 8, 2016, Defendants sold all
25,230,125 Halitron shares into the market generating net proceeds of
$56,177.52 and a net profit of $35,993.42.
14. Between January 2013 and July 2016, Defendants entered into 57 other debt
purchase agreements via which they acquired more than $1.1 million in aged debt convertible
securities from 38 other microcap issuers. Defendants converted the securities into more than
8.9 billion shares of microcap stock, more than 7.4 billion of which they sold into the market,
reaping a gain of $1,474,901.63.
B. Defendants Violated the Federal Securities Laws by Acting as Unregistered
Dealers.
15. Any person engaged in the business of buying and selling securities for such
person’s own account (through a broker or otherwise) must register with the Securities and
Exchange Commission.
Case 0:17-cv-62255-XXXX Document 1 Entered on FLSD Docket 11/17/2017 Page 4 of 10
5
16. Between January 2013 and July 2016, Defendants bought and sold securities for
their own account as part of a regular business in which they entered into 58 different debt
purchase transactions to purchase convertible debt securities of 39 different issuers of microcap
stock, exercised their conversion rights to obtain more than 8.9 billion shares of microcap stock,
and sold more than 7.4 billion shares of microcap stock into the market, reaping a gain of
$1,474,901.63.
17. Defendants used means or instrumentalities of interstate commerce to buy and sell
securities.
18. Between January 2013 and July 2016, neither Ibrahim Almagarby nor Microcap
Equity Group LLC were registered with the Securities Exchange Commission as dealers.
19. Between January 2013 and July 2016, neither Ibrahim Almagarby nor Microcap
Equity Group LLC were associated with individuals or entities that were registered with the
Securities Exchange Commission as dealers.
C. Defendants Bought and Sold Penny Stocks.
20. At least some of the 7.4 billion microcap shares that Defendants sold did not
meet any of the exceptions from the definition of a “penny stock,” as defined by Exchange Act
Section 3(a)(51) [15 U.S.C. § 78c(a)(51)] and Exchange Act Rule 3a51?1 [17 C.F.R. §
240.3a51?1].
21. Defendants therefore participated in the offering of penny stock by acting as
dealers engaged in the buying and selling of penny stocks.
/
/
/
Case 0:17-cv-62255-XXXX Document 1 Entered on FLSD Docket 11/17/2017 Page 5 of 10
6
COUNT I
Violation of Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)]
(Against both Defendants)
22. The Commission re-alleges and incorporates by reference each and every
allegation in paragraphs 1-21, inclusive, as if they were fully set forth herein.
23. By engaging in the conduct described above, Defendants made use of the mails or
other means or instrumentalities of interstate commerce to effect transactions in, or to induce or
to attempt to induce the purchase or sale of securities while not registered with the Commission
as a dealer or when they were not associated with an entity registered with the Commission as a
dealer.
24. By reason of the foregoing, each of the Defendants violated Exchange Act
Section 15(a)(1) [15 U.S.C. § 78o(a)].
25. A violation of Section 15(a)(1) does not require proof of scienter.
COUNT II
Violation, as a Control Person, of Section 15(a)(1) of the Exchange Act
(Against Defendant Almagarby)
26. The Commission re-alleges and incorporates by reference each and every
allegation in paragraphs 1-25, inclusive, as if they were fully set forth herein.
27. During the relevant period, Ibrahim Almagarby was the sole person who owned
and controlled Microcap Equity Group LLC.
28. Under Exchange Act Section 20(a) [15 U.S.C. § 78t(a)], every person who,
directly or indirectly, controls any entity liable under any provision of the Exchange Act or of
any rule or regulation thereunder shall also be liable jointly and severally with and to the same
extent as such controlled entity to any person to whom such controlled person is liable (including
Case 0:17-cv-62255-XXXX Document 1 Entered on FLSD Docket 11/17/2017 Page 6 of 10
7
the Commission), unless the controlling person acted in good faith and did not directly or
indirectly induce the act or acts constituting the violation or cause of action.
29. Ibrahim Almagarby did not act in good faith, and he directly induced the act or
acts constituting Microcap Equity Group LLC’s violations of the Exchange Act.
30. By reason of the foregoing, Ibrahim Almagarby violated Exchange Act Section
15(a)(1) through his control of Microcap Equity Group LLC.
RELIEF REQUESTED
WHEREFORE, the Commission respectfully requests that this Court enter a judgment:
I.
Permanent Injunction
Permanently restraining and enjoining Ibrahim Almagarby and Microcap Equity Group
LLC and their agents, servants, employees, attorneys, and all persons in active concert or
participation with Ibrahim Almagarby and Microcap Equity Group LLC who receive notice of
the injunction by personal service or otherwise, from acting as an unregistered dealer in violation
of Exchange Act Section 15(a)(1) [15 U.S.C. § 78o(a)(1)] by using any means or instrumentality
of interstate commerce, or of the mails, or of any facility of any national securities exchange, to
effect transactions in, or induce or attempt to induce the purchase or sale of, securities while not
registered with the Commission as a dealer or while not associated with an entity registered with
the Commission as a dealer;
II.
Penny Stock Bar
Permanently restraining and enjoining Ibrahim Almagarby and Microcap Equity Group
LLC from participating in the offering of any penny stock, including engaging in activities with a
Case 0:17-cv-62255-XXXX Document 1 Entered on FLSD Docket 11/17/2017 Page 7 of 10
8
broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the
purchase or sale of any penny stock, under Exchange Act Section 21(d)(6) [15 U.S.C. §
78u(d)(6)];
III.
Civil Penalties
Ordering Ibrahim Almagarby and Microcap Equity Group LLC, jointly and severally, to
pay an appropriate civil penalty under Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)];
IV.
Disgorgement
Ordering Ibrahim Almagarby and Microcap Equity Group LLC, jointly and severally, to
disgorge, with prejudgment interest, all ill-gotten gains derived from the activities set forth in
this Complaint;
V.
Cancellation and Surrender
Ordering Defendant Microcap Equity Group LLC to surrender for cancellation its
remaining shares of stock of, and surrender its remaining conversion rights under the convertible
securities issued by the following issuers: Aluf Holdings, Inc., Axxess Pharma, Inc., Bulova
Technologies Group, Inc., CD International Enterprises, Inc., CUBA Beverage Company,
Daniels Corporate Advisory Company, Inc., Dewmar International BMC, Inc., East Coast
Diversified Corp., Elray Resources, Inc., Energy Revenue America, Inc., Eyes on the Go, Inc.,
Gold & Silver Mining of Nevada, Inc., Gold and GemStone Mining Inc., Green Energy
Enterprises, Inc., Greenfield Farms Food, Inc., Grid Petroleum Corp./ Simlatus Corporation,
Halberd Corporation, Halitron, Inc., Healthnostics, Inc., Healthy & Tasty Brands Corporation
Case 0:17-cv-62255-XXXX Document 1 Entered on FLSD Docket 11/17/2017 Page 8 of 10
9
(a/k/a GRILLiT, Inc.), Hybrid Coating Technologies, Inc., In Ovations Holdings, Inc., Indo
Global Exchange(s) Pte, Ltd., InoLife Technologies, Inc., InternetArray, Inc., Las Vegas
Railway Express, Inc., LIG Assets, Inc., Medical Care Technologies Inc., Mining Global, Inc.,
MyECheck, Inc., Next Galaxy Corp., North American Cannabis Holdings, Inc., PM&E, Inc.,
PotNetwork Holdings Inc., PPJ Healthcare Enterprises, Inc., Quasar Aerospace Industries, Inc.,
Sanomedics, Inc., Seven Arts Entertainment, Inc., and Urban Ag Corp.
VI.
Retention of Jurisdiction
Retaining jurisdiction of this action in accordance with the principles of equity and the
Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and
decrees that may be entered, or to entertain any suitable application or motion for additional
relief within the jurisdiction of this Court; and,
VII.
Further Relief
Granting such other and further relief as this Court may deem just, equitable, or necessary
in connection with the enforcement of the federal securities laws and for the protection of
investors.
/
/
/
/
/
/
Case 0:17-cv-62255-XXXX Document 1 Entered on FLSD Docket 11/17/2017 Page 9 of 10
10
DATED November 17, 2017 Respectfully submitted,
By:
____________
Amy J. Oliver
Trial Counsel
Florida Special Bar No. A5502307
Direct Dial: [phone]
E-mail: [e-mail]
Lead Attorney
Attorney To Be Noticed
Daniel J. Wadley
Trial Counsel
Florida Special Bar No. A5502306
Direct Dial: [phone]
[e-mail]
Lead Attorney
Attorney To Be Noticed
ATTORNEYS FOR PLAINTIFF
SECURITIES AND EXCHANGE COMMISSION
351 South West Temple, Suite 6.100
Salt Lake City, Utah 84101-1950



LIB* looks like no bid soon as well.

[otcsource]

Tough break for some of the holders here.

[tundra11]

Management may keep updating financials. Why not? We will see soon.

[jhnvtjll]

This is going to the greys. Impossible to sell this shell.

The owners of the shell will have a hard time selling it in this condition.

[C.G.B Spender]

They did, I knew it was coming... No one wanted to heed the warnings though... Now they can enjoy their tax write offs lmmfao

[roger wilco]

If there was a scam stock awards show each year Greenfield Farms Food Inc. aka GRAS would be a front runner every year. This piece of crap deserved this trading suspension and delisting to the grey sheets.

[Magnum7419]

Thanks to GRAS and Carebourn LIBE is clean an about to be a winner IMHO

[SPARK]

GRAS is a shell not so clean and without a management or a lawyer, and a mess of paper that is too expensive to sort out and trace. The owners of the shell will have a hard time selling it in this condition.

[tundra11]

Get ready. The libe deal will not happen. Those who lost, and bought because of a 8-k, then GRAS let THE DEAL GO. LAW SUIT.

[Big Wheel]

BIRDS OF A FEATHER, FLOCK TOGETHER. libe$.

[C.G.B Spender]

"Lawsuits"? It'll be thrown out.... Just like the one against these clowns before lol

[tundra11]

Investors bought in because of NGEN.
Then there's a slit. I smell law suits. It will never happen.
There has to be consideration.

[jhnvtjll]

Amen. GLTU2!

[stju1979]

All I can say is a tax write off for next tax season. GLTU!

[jhnvtjll]

Sounds like NGEN is abandoning the sinking GRAS ship and hopping over to the LIBE ship. LIBE looks like junk. The only positive thing there is that it's current with their periodic reports.

Game over.

[tundra1]

"The unwinding"
Now what?

[AK2003]

https://www.sec.gov/Archives/edgar/data/1503161/000149315219011805/form8-k.htm

This might help shed some light as to what might be going on.

[tundra11]

Wow. That's to bad.

[C.G.B Spender]

To bad, Their suspended... And headed to the greys once the suspension is over, Game over here

[jhnvtjll]

According to the SEC, GRAS never even received the delinquency letter that was sent to them over a year ago on July 9, 2018.

[jhnvtjll]

I've had many penny stocks suspended then revoked. It's the risk I take for playing triple zeros. IMO, the only hope is for GRAS to re-register with the SEC after it gets revoked. It'll be a long process. I don't expect to see a bid on this stock anytime in 2019 or 2020, and maybe never.

Read the following link. It's the best write-up I've seen on SEC suspensions.

https://otcmarketresearch.com/the-sec-just-suspended-my-stock-now-what/

[trader53]

GRAS 0.0002


https://www.stockscores.com/charts/charts/?ticker=GRAS

[tundra1]

Some posts really have to wonder why GRAS continues to submit financial updates under the gloom and doom umbrella. Perhaps its business as usual at GRAS and their time schedule is not the same as SEC. It's not like GRAS management did not know SEC was going to pull the plug. This was not a surprise. Too much going on to let GRAS become a shoe box in a closet.
GLTA

[C.G.B Spender]

Wrong, They are suspended UNTIL that day... Then the Grey markets

[tundra11]

So gras has until 8/12 to update or ask for an extension. So what.
I betting they come through.

[C.G.B Spender]

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=150258186

[C.G.B Spender]

And will be on the GREY MARKET (That's for dead tickers)

[TB]

The U.S. Securities and Exchange Commission announced the temporary suspension of trading in the securities of the following issuers, commencing at 9:30 a.m. EDT on July 30, 2019 and terminating at 11:59 p.m. EDT on August 12, 2019:
[/color]

Greenfield Farms Food, Inc. (GRAS)


https://www.otcmarkets.com/stock/GRAS/news/SEC-Suspension-of-Trading?id=235662

[C.G.B Spender]

Well, unfortunately there’s nothing “fake” about being suspended by the SEC... Now, show me where they “Been through that before”

[C.G.B Spender]

Not this trash (or the 99.99% of the scams stuck in the Grey's), unfortunately

[JackAskSlap]

Burnt Gras grows back 10x stronger

Sucks but I'm not worried

[infamous]

i think so too

[C.G.B Spender]

I THINK NOT LOL

Grey Sheets Trading
Should be Avoided


Grey Sheets, also spelled "Gray Sheets," and also known as the "Gray Market" is another category of OTC stocks that is completely separate from Pink Sheets and the OTCBB.


The differences are as follows . . .

Unlike other financial markets,

• No recent bid or ask quotes are available because no market makers share data or quote such stocks. There is no quoting system available to record and settle trades.

All Grey sheet trading is moderated by a broker and done between consenting individuals at a price they agree on. The only documentation that can be publicly found regarding the trades is when the last trade took place.

• No SEC registration and little SEC regulation. Regulation of Grey Sheet stocks takes place mainly on a state level. Unlike Pink Sheets, these stocks have no SEC registration to possess a stock symbol or to possess shares, or trade shares, of that stock.

• Such penny stocks, similar to Pink Sheets, are not required to file SEC (Securities and Exchange Commission) financial and business reports.

• These stocks may not be solicited or advertised to the public unless a certain number of shares are qualified to be traded publicly under 504 of Regulation D.

• Extremely Illiquid. Gray sheet trading is infrequent, and for good reason... Difficult to trade, not advertised, difficult to follow the price, the least regulation possible, hard to find any information on the stock, very small market cap, little history, and most such stocks do not yet offer public shares; so shares of such stocks are commonly privately held.

The lack of information (bids, history, financial reports) alone causes most investors to be very skeptical of Gray Sheets and avoid them altogether. Grey sheets trading is rarely made by Extraordinary Investors.

• Shares of such penny stocks are privately held and restricted from being sold publicly unless such company files a 504 of Regulation D and meets basic qualifications; for instance, have a concrete plan of operation, and a certain number of private stocks being held for at least one year, and a planned sale of shares worth no more than $1 million. The benefit of the public offering of stock is to raise capital for operations.



Gray Sheets are commonly associated with Initial public offering (IPO) stocks or start up companies or spin-off companies.

Actually most Gray Sheet stocks are not IPO's. But many are start-ups and some are spin-offs.
IPO's are new shares of stock publicly sold unofficially before they trade on any stock exchange or other financial market.




In the case of IPO's, start-ups, and spin-offs...

The idea for being listed on the Gray Sheets is most likely for seven major reasons:

• to obtain a stock symbol, transfer agent, and shareholder base without attracting attention from the general public, at least for the time being.

• to formulate, structure, and pursue a business plan and operation for future growth and success.

• to gain a history of trading, and shareholder growth, until such time that a company qualifies to offer public shares, or to be traded on the Pink Sheets, OTCBB, or one of the stock exchanges. This all depends on the goals of a company and its qualifications.

• to accumulate shares from private and public sources in preparation to meet requirements to be listed on the Pink Sheets or OTCBB.

• to get an idea of the investor reception once they are officially traded (for IPO's).

• to gain investor awareness and potential funding/financing options.

• to limit the fees and regulations associated with Pink Sheets, OTCBB or the Stock Exchanges. Many start-ups do not qualify to register to trade on the other financial markets.

In addition, the costs associated with registering can be prohibitive.

The Grey Sheets offer a start-up company the opportunity to grow so that later they may meet the qualifications and expenses to be traded on a more prestigious financial market.


Grey Sheets is also Home to delisted stocks from other markets

Some stocks on this financial market were once traded on the NASDAQ, OTCBB, or the Pink Sheets but ran into serious misfortune - usually financial - and thus failed to meet the minimum requirements of the registered SEC filings and/or stock exchange regulations for a financial market. Such stocks were delisted or removed and may begin trading on the Grey Sheets.


Besides start-up companies and delisted stocks. . .

Grey Sheet Trading: Some companies choose be listed or traded on in these sheets or remain on these sheets.

If a company chooses to be traded on these Sheets, then the shares are many times held privately by management, employees and others associated with the company. Such stock is traded privately between these stock holders. Shares of such stock are extremely illiquid.


The History of Gray Sheet Stocks in general

Obviously this type of stock usually has very little history. And finding information on such stocks is difficult if not impossible since they are not required to file such reports with SEC (The Securities and Exchange Commission).

Selling such shares of stock can be difficult and very slow for the reasons given.

So grey sheet trading generates great risk if you can trade them at all.

Those Gray Sheets stocks that do have a history must be studied carefully - if you can find the information.

Although companies with a history may have had serious past problems, they may still have novel and exciting developmental product(s) in the making that could become in high demand.

And/or the company may have pulled out of their past problems and are now productive valued companies that choose to remain on the Grey Sheets.

I am thinking though that many such companies would have been, or will likely be, targets to be merged with, or bought out by, larger companies if such super products, or patents, are actually in development that are worth their weight in gold.

Why?

Because if shares are available for public trading, such companies can be bought or controlled for a fraction of the price then if traded on a stock exchange or even the OTCBB. This deal is possible because of the low number of shares outstanding.



Risks of Grey Sheet Trading...


Grey Sheet Trading is inherently risky for the following reasons:

• If Gray Sheet stocks register to offer public shares, then you can only trade them through a broker that agrees to participate in that stock transaction. Such agreement is verbally expressed between the buyer and seller and is based on mutual good will.

If such agreement is broken by either participant before the transfer of shares occurs, there is little, if any, legal recourse to make the participant comply. Broker commissions for such transactions are far higher than for other securities - the broker's cut for services rendered.

• No way to track bids and asks and difficult to figure what the stock is actually worth.

• Very difficult to impossible to find good fundamental and technical information on these stocks.

• Such stocks mostly have very little history and may fold any time.

• Many of these stocks are likely companies in name only with little to show.

• Most of these stocks are very illiquid - difficult to buy and may be more difficult to sell.

• Management has more control over the shares.


Risks are Limited in some important areas:

The SEC has established certain regulations for Gray Sheet stocks that limit risks to investors, as follows:

• The stock may not be solicited or advertised - so pump-n-dump scams by broker, mail, fax, etc are limited.

• Grey Sheet stocks that do have a public offering of shares cannot be shorted. This is a benefit in that unreasonable plunges in share values are minimal because broker-dealers and other investors and scam artists cannot short the stocks by law.



Gray sheet stocks usually trade higher than they would when officially traded on one of the exchanges considering the size of the company, but that is mostly because so few shares exist with such low market cap - less than $1 million usually - in comparison to publicly traded companies.


?Private Companies desiring Grey Sheet status through acquiring grey sheet shell companies...

Acquiring a shell company does not require that much paper work - filing for a corporation etc., not near as much as obtaining your own legal business documentation or ticker symbol.

Be careful with grey sheet shell companies.

*Watch for hidden debt. No readily accessible financial reports are available.

*Be careful for old lawsuits pending. You purchase the shell and any problems it may have legally; thus, the legal issues may now be your problems.

*As a requirement for purchase, the shell company management may desire to retain their shares of stock in your company once you acquire their shell, which can be worth far more to them than actual cash received from a buyout or normal merger if your company truly has a significant chance for success.

*For a merger, the management may desire shares of your stock in exchange for a discount sale of their company.?
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*if the grey sheet company is not yet qualified for public trading, and has a very small number of shares, then you still have work to do to achieve all that with the proper paperwork and obtaining the necessary qualifications to become publicly traded as mentioned on my site.

*If you can find a way to outright control a shell company that has public shares, and you gain control through purchase of the company's public shares, then you may be paying a premium for the shell far beyond its actual worth - as many investors will hold out and will not sell right away, just to see how high the price will go up first. But the savings in time and paperwork may make this worthwhile. Since so few shares exist in many grey sheet stocks, you may actually need far more than 10% ownership to take control since the management own most of the shares. As well, the grey sheet company likely has private stock besides the public stock.

Rather than explain everything regarding this topic, I direct you to a couple sites that specialize in such transactions...
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venturevest.com/shellsreversemerger.html

http://www.expressipo.com/faqs.html

?Such specialist are in a far better position to advise you because they are already aware of many of the shells and their flaws and their good points.

Maybe you already viewed these sites. There are others you can view too by doing a web search.

All in all, if you can eliminate the negatives of acquiring a shell company, such as hidden debts and dealing with the shell management, or potential old lawsuits, buyout paying premium price for public shares, etc.... if the shell is clean, then you do well to acquire the shell and start work on your company far sooner.

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Summary of Grey Sheet Trading

Grey sheet trading should be treated with the highest suspicion. Remember, Gray Sheets have the least regulation and very little history in general. They are not under any SEC disclosing requirements and are not advertised. Information is difficult to find if not impossible for such stocks, so determining the value, if any, is next to impossible. These stocks are highly illiquid.

I am not sure that a way exists to efficiently study such companies or the real value of shares - no bid and ask prices available. You could try calling the company and requesting information.


I stay away from the Grey Sheet Trading completely and do not follow them because far too much time-labor involved to find solid gray sheet stocks worth investing, and no guarantee I could even sell the shares.

Why take such risks when plenty of re-searchable quality penny stocks can be easily found on the OTCBB and Nasdaq?

Don't let online con-artists dupe you into investing in Gray Sheet stocks. Tooo risky!!!
This concludes this lesson on Grey Sheets Trading. When you are ready, please continue on to the next lesson.

https://www.extraordinaryinvestor.com/grey-sheets.html