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To me it looks like any other pinkie R/S, a familiar milestone in the evolution of a paper-printing POS.
What's kind of odd is the timing. They really expect FINRA to approve this over thanksgiving??? If/when it does get a tick, should be listed here: http://www.otcmarkets.com/otc-pink/marketActivity/splits
The SEC are also claiming CR is playing dirty by making onerous document production demands on employees and investor witnesses due to give depositions as SEC witnesses - trying to scare them off.
SEC case/Dworkins: Interesting scuffle in the court filings. The parties are taking depositions over the next little while. Dworkin's counsel sent around a message saying he was going to assert 5th amendment rights, ie not provide anything of substance. Then the SEC counsel responded that he understood that Dworkin would *not* take the 5th. CR's counsel is now demanding to know whether the SEC & DoJ have been putting any "improper" pressure on Dworkin to be responsive, eg by claiming it would be a breach of his plea deal in his criminal case.
Ugly.
I wonder where they are with the FINRA process for the R/S? This is the rule FINRA works under now:
Under Rule 6490, FINRA now has the authority to exercise discretion in reviewing notifications and to request additional documentation when necessary. Additionally, FINRA now has the authority to conduct detailed reviews of notifications and delay requests to announce company-related action on a case by case basis. This more detailed review is only triggered if the FINRA Operations Department believes that one of the following five factors exists with respect to the notification:
•FINRA believes the forms and other documentation submitted by the issuer are not complete, accurate, or were filed without the appropriate authority;
•The issuer is not current with its reporting obligations to the SEC or other regulatory authority;
•FINRA has actual knowledge that parties related to the corporate action are the subject of pending or settled regulatory action or are under investigation by a regulatory body or are pending criminal action related to fraud or securities law violations;
•FINRA has actual knowledge that persons related to the action may potentially be involved in fraudulent activities related to the securities market or may pose a threat to public investors; or
•There is significant uncertainty in the settlement and clearance process for the security.
I wnder if FINRA cares that the company's main "funder" is being issued paper at massive discounts and is apparently associated with a guy (Hugh a/k/a Eugene Austin) with a $100M+ default judgement lodged against him in a civil money laundering case; is headed by this cheesy promoter, Damon Roberts:
Court finally got around to denying Eiten's objection to SEC's motion for default against NFC - the no-attorney thing, with Eiten unsuccessfully attempting to represent his companies pro se.
06/05/2012 15 Opposition re 13 MOTION for Default Judgment as to National Financial Communications, Corp. filed by Geoffrey J. Eiten. (Lyness, Paul) (Main Document 15 replaced on 11/20/2012) (Danieli, Chris). (Entered: 06/06/2012)
06/06/2012 16 MOTION to Strike 15 Opposition to Motion by Securities & Exchange Commission.(Bernstein, Deena) (Entered: 06/06/2012)
11/20/2012 17 Judge George A. OToole, Jr: ELECTRONIC ORDER entered granting 16 Motion to Strike 15 Opposition to Motion (Danieli, Chris) (Entered: 11/20/2012)
Don't think so. JF's lawyer has banged away over & over again asking why TM & others haven't been pinged, trying to dilute JF's guilt. I'm pretty sure he called TM as a witness in order to interrogate him in front of the jury, more or less.
TM is Mr Teflon.
The LP administrator dismissed the case against him when he settled with Gulabtech. The guy working out the distribution trust doesn't seem to be taking any action against him. No sign of SEC or DoJ action.
From the court docket, TM is one of the four witnesses JF called - be interesting to see a transcript of that, but anyway it obviously didn't do him any good.
Jury quickly finds JF guilty on all 31 counts; sentencing set for Feb next year.
What a fiasco for him. If he'd taken the plea deal he, like JL, would have had all but one count dismissed & been sentenced to five years. For the whole 31 counts he's looking at 20+ years according to the sentencing guidelines. I doubt the judge will give him that much but it's going to be ugly for him.
11/19/2012 329 ELECTRONIC Clerk's Notes for proceedings held before Judge Douglas P. Woodlock: Jury Trial DAY 17 as to James Fields (2) held on 11/19/2012; jury deliberations continued; jury question no. 1 received; hearing held with counsel; jury exhibit no. one marked; jury in and further instructed; deliberations continue; Jury Verdict returned finding the deft Guilty of all counts; jury is discharged; Sentencing is set for 2/14/13 at 2:00 PM; deft released on same bail terms and conditions; trial exhibits returned to respective parties. (Attorneys present: AUSA's Lelling and Levenson for Gov't; Pollack and Colmey for the deft)Court Reporter Name and Contact: Brenda Hancock (617-439-3214). (Lovett, Jarrett) (Entered: 11/19/2012)
11/19/2012 330 REMARK: Trial exhibits electronically stored in Jury Evidence Recording System (JERS) as to James Fields (2). (Lovett, Jarrett) (Entered: 11/19/2012)
11/19/2012 331 JURY VERDICT as to James Fields (2) Guilty on Counts 1,2,3-10,11-19,20-26,27,28,29-31. See 323 Notice re renumbering. (Lovett, Jarrett) (Entered: 11/19/2012)
11/19/2012 332 Judge Douglas P. Woodlock: ORDER entered. PROCEDURAL ORDER re sentencing hearing as to James Fields (2): Sentencing set for 2/14/2013 02:00 PM in Courtroom 1 before Judge Douglas P. Woodlock. (Lovett, Jarrett) (Entered: 11/19/2012)
So no quarterly filing at OTC Markets (was due Nov 14th) and no late filing notice. Have they gone completely dark? They don't have to file any reports if they don't want to, having deregistered themselves a few years ago - but if they don't, insiders run risks if they trade.
Asked why the S.E.C.’s division of corporation finance allowed the offering to proceed, John Nester, an S.E.C. spokesman, said, “As is always the case, Enforcement and Corporation Finance staff closely and appropriately coordinated their efforts in this case.
Of course, this little afair is another demonstration that Corporation Finance and Enforcement do not, in fact, coordinate very well.
I've been following that one - the case seems to have slipped into a coma or something. How long does the judge need consider a ruling on poor ole Geoff's motion??
Nope, I'm wrong - he's letting it go to trial.
10/22/2012 286 ELECTRONIC Clerk's Notes for proceedings held before Judge Douglas P. Woodlock: Jury Trial DAY 1 as to James Fields (2) held on 10/22/2012; hearing held with counsel; 279 and 280 Defendant's Motions in Limine are DENIED; further pretrial issued addressed and ruled on by the Court on the record; venire sworn; voir dire conducted; peremptory challenges exercised by the Gov't and deft; jury of 12 with 3 alternates selected; jury excused; trial continued until 10/23/12 at 9:00 AM in Courtroom 1 before Judge Douglas P. Woodlock. (Attorneys present: AUSA's Lelling and Levenson for Gov't; Pollack, Colmey and Solomon for the deft)Court Reporter Name and Contact: Brenda Hancock (617-439-3214). (Lovett, Jarrett) (Entered: 10/22/2012)
This should be interesting.
The court has released the transcript of Latorella's sentencing hearing: http://www.scribd.com/doc/110669952/Jl-Sentencing-Transcript
The transcript from Latorella's sentencing hearing has been released: http://www.scribd.com/doc/110669952/Jl-Sentencing-Transcript
It's interesting in the context of the discussion of instances where the prosecution asks for a lesser sentence than the probation office's recommendation; and for insight into the way plea deals are negotiated and presented to the court.
In this case, the plea agt was for 5 years; probation had recommended 20+ years based on the Guidelines. The transcript shows the prosecution arguing that the Guidelines are "out of whack" - they produce sentences for white-collar crimes which are just too Draconian.
Some interesting quotes:
MR. LELLING [prosecutor]: We are fully aware that it is a generous resolution, and we considered our case against these two
defendants fairly strong. There were certain factors that to us militated in favor of making it five years, and what they really are is variations on a 3553 theme. First, we are of the view that the Guidelines for securities cases are out of whack and need to be revised.
THE COURT: You understand that the court reporter is taking this down.
MR. LELLING: Am I speaking very fast?
THE COURT: No. However fast you are speaking, what
you are saying is being taken down.
MR. LELLING: I know. I crossed that bridge long ago, your Honor.
THE COURT: Me too.
Addressing the same point earlier in the hearing:
LELLING: ... But, as a matter of policy, we believe that at this
particular point, 2B1.1, as it relates to securities offenses,
is a little bit out of whack. ... If you take on their face the enhancements, which Probation does, you can get to a substantially higher sentence without breaking a sweat in a case that involves almost no loss. Consider a CEO, for a moment. You have a base of six or seven. You get four levels for being the officer of a publicly traded company involved in a securities fraud .... You can get to 12 additional levels that are almost definitional in any securities case, sophisticated means, more than 10 or more than 50 or more than 250 victims, role in the offense, the new plus four for being an officer of a publicly traded company. We're at 12 levels without evendoing anything.
THE COURT: And that is, I think, probably true in most securities cases involving the officers or directors, and I think I share the view that there is a kind of Guidelines accelerant that is being poured over this kind of white-collar case; because it works the same way, frankly, in the Base Offense Level, that it is not geometric but it is pretty close to that in terms of what it does to the Guidelines.
Later, the judge had this to say:
THE COURT: ... That is to say, the political bargain that was struck, if we have to personify it, was between Senator Kennedy, Senator McDermott and Senator Thurmond wanting heavier sentences for what I will call "blue-collar crimes" and Senator Kennedy wanting heavier sentences for white-collar crimes. So, strange bedfellows sometimes lead to unnatural acts, and this was the outcome, a set of Guidelines that created tough, tough sentences on their face for white-collar criminals.
JF's trial starts Monday.
I'd guess he will cop a plea before it starts.
I agree - but that's the problem, of course: corrupt and/or incompetent fund managers.
I hadn't seen this before: Yorkville got hundreds of $M in non-recourse loans under the fed TALF program. Faaarrrk ... http://www.forbes.com/sites/nathanvardi/2012/10/17/sec-charges-formerly-1-billion-yorkville-advisors-hedge-fund-with-fraud-and-bogus-valuations/
Nice to see, finally.
But once again I really wish these actions could somehow look more closely at the funds' investors - the "pension funds" and "funds of funds" mentioned in the complaint.
Apparently they were lied to but equally apparent, if they had done any real diligence (not just accepting Yorkville's statements) and if they had really performed on their fiduciary obligations, they would never have invested in YA funds.
Focusing just on the scammers inadequately serves the interests of the real past and future victims, the beneficiaries of these pension etc funds. Fiduciaries need to be held much more accountable.
FWIW, the SEC pinged Yorkville f/k/a Cornell Capital for similar valuation, fee inflation etc badness today: http://www.sec.gov/litigation/litreleases/2012/lr22510.htm
They were one of the big penny PIPE players, like NiR.
The amended complaint filed in August certainly continues to focus on bad valuations etc etc with a bit more detail. Some quick comments here: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=78696939
Defendants filed their answer on 21st Sep, but it's the usual uninformative thing - "Denied", "Denied" etc.
Be odd if DoJ were holding off waiting for a civil trial outcome but who knows?
Despicable
"Ace Ankomah" is a great name - if I ever need an attorney in Accra, he's my man.
The link in that should be http://www.dtcc.com/legal/imp_notices (without the period)
This tranche of the T&T settlement was 99M shares. Something like 900M shares of VRAL have traded since 30th June. The O/S as of that date was 1.2B, versus A/S of 1.5B.
Presumably not all of those 900M shares were dumpage but surely (?) there's been new issuance of more than the 300M they had left of the A/S. Which is interesting, because if true it means they've raised the A/S rather than do a R/S.
I guess they'll get around to telling the market about it at some point, but maybe not until they file their Q3 report due in mid-Nov.
Ha! I remember reading about that affair, but had no idea that CR's father was involved.
Without a lawyer, he's running a big risk of delivering a summary victory to the SEC without a jury ever seeing it.
Roddy Boyd shutting down The Financial Investigator but starting a new non-profit. like so:
The goal of the Southern Investigative Reporting Foundation is to unlock the truth found in the sea of legal and financial filings corporations often use to keep the details of their true condition and business practices opaque.
The reporting will be free of charge and bias: Neither SIRF nor its staff will profit from any form of investment in the companies we report on and no one compensates us in any fashion. Our donors are concerned individuals, businesses and foundations who will not have foreknowledge of our work. We will advocate for no political or social agenda beyond good investigative work; individuals and company’s we discuss will be given every opportunity to participate in the story.
To that end, SIRF’s delivery of superior document-driven investigative reporting on capital markets issuers and participants can enable transparency and provide accountability on behalf of the American investing public.
http://www.talkingbiznews.com/1/biz-journalist-creating-non-profit-to-cover-markets/
Good luck Roddy!
This Eno Research outfit seems like a good fit with VRAL.
Eno and its CEO, Jim Flowers, are defendants in a Florida class action suit. They were the manufacturers for a MLM operation called Waiora selling some kind of snake oil; the suit claims the snake oil was mostly water, despite claims from Flowers et al that it was chock full of something-or-other. See http://mlmblog.net/site/wp-content/uploads/2012/02/https-ecf-flsd-uscourts-gov-doc1-051110326079.pdf
Flowers and Eno didn't bother to answer the complaint, so the clerk of the court has entered defaults against them.
Apparently Flowers set up a competing snake oil MLM operation after being dumped last year by Waiora, which doesn't seem to have fared very well, according to this: http://www.theliquidzeolitebook.com/zeolite-information/ncd-wellness-and-jim-flowers
Thankee. Seems like FINRA's discretion is pretty limited - if the form-filling is OK & no clearing issues, then it needs to have actual knowledge of shadiness.
"Under Rule 6490, FINRA now has the authority to exercise discretion in reviewing notifications and to request additional documentation when necessary. Additionally, FINRA now has the authority to conduct detailed reviews of notifications and delay requests to announce company-related action on a case by case basis. This more detailed review is only triggered if the FINRA Operations Department believes that one of the following five factors exists with respect to the notification:
•FINRA believes the forms and other documentation submitted by the issuer are not complete, accurate, or were filed without the appropriate authority;
•The issuer is not current with its reporting obligations to the SEC or other regulatory authority;
•FINRA has actual knowledge that parties related to the corporate action are the subject of pending or settled regulatory action or are under investigation by a regulatory body or are pending criminal action related to fraud or securities law violations;
•FINRA has actual knowledge that persons related to the action may potentially be involved in fraudulent activities related to the securities market or may pose a threat to public investors; or
•There is significant uncertainty in the settlement and clearance process for the security."
Question: FINRA has to sign off on a R/S before a company can execute it, right? What's FINRA's approval process - is just a bureaucratic exercise to make sure the company has filled in all the boxes, or do they perform a more substantial review - and if so, what kinds of things do they look into?
Check this out, LH Financial's event in memory of Solomon Obstfeld: http://www.facebook.com/media/set/?set=a.236361489722562.68845.107850092573703&type=1&comment_id=3517856&offset=0&total_comments=10
The smiles on our children's faces perpetuate the legacy of Solomon Obstfeld.
Being a thuggish money launderer doesn't mean you can't also care about kids, I guess, but the gorge still rises.
Asher Enterprises, Inc: http://asherenterprises.org
Apparently, President & Founder Curt Kramer and his "team" are excited about the JOBS Act.
Some Asher Enterprises Inc deals:
688239 B.C. Ltd., Baeta Corp. (OTCPK:BAEA), Bitzio, Inc. (OTCPK:BTZO), Brownie's Marine Group, Inc. (OTCPK:BWMG), CelLynx Group, Inc. (OTCPK:CYNX), CLICKER Inc. (OTCPK:CLKZ), Coates International Ltd. (OTCPK:COTE), Compass Biotechnologies Inc. (OTCPK:COBI), Freeze Tag, Inc. (OTCPK:FRZT), Global Earth Energy, Inc. (OTCPK:GLER), Greenchek Technology, Inc. (OTCPK:GCHK), Greenfield Farms Food, Inc. (OTCBB:GRAS), Internal Fixation Systems, Inc. (OTCBB:IFIX), Investview, Inc. (OTCBB:INVU), League Now Holdings Corporation (OTCPK:LNWZ), Mass Hysteria Entertainment Company, Inc. (OTCBB:MHYS), Max Sound Corporation (OTCBB:MAXD), Medical Care Technologies Inc. (OTCPK:MDCE), Megola Inc. (OTCPK:MGON), Micro Imaging Technology, Inc. (OTCPK:MMTC), Monster Offers (OTCBB:MONT), mPhase Technologies, Inc. (OTCBB:XDSL), National Automation Services, Inc. (OTCPK:NASV), North Bay Resources, Inc. (OTCPK:NBRI), Odyssey Pictures Corp. (OTCPK:OPIX), PCS Edventures!.com, Inc. (OTCPK:PCSV), POWRtec International Corp (OTCPK:POWT), Q Lotus Holdings, Inc. (OTCBB:QLTS), Resource Exchange of America Corporation (OTCPK:RXAC), Shamika 2 Gold, Inc. (OTCPK:SHMX), Skinvisible Inc. (OTCPK:SKVI), Solar Energy Initiatives, Inc. (OTCPK:SNRY), Solar Park Initiatives, Inc. (OTCPK:SOPV), Sunvalley Solar, Inc. (OTCPK:SSOL.D), Surge Global Energy, Inc. (OTCPK:SRGG), The Graystone Company, Inc. (OTCPK:GYST), The PAWS Pet Company, Inc (OTCPK:PAWS), United States Oil & Gas Corp. (OTCPK:USOG), US Natural Gas Corp (OTCPK:UNGS), Vendum Batteries Inc. (OTCPK:VNDB), WaterPure International Inc (OTCPK:WPUR), Worthington Energy, Inc. (OTCPK:WGAS)
Don't think so.
The NiR Group (Corey Ribotsky) board: http://investorshub.advfn.com/NIR-Group-11792/
One former deal missing from that list: LocatePLUS, ex-LPHC/LPHCQ, recently deregistered. LPHC was a toxic funder picnic stock, with Cornell/YA, Dutchess, Laurus and Corey Ribotsky all involved at one time or another.
I don't think Dutchess is active anymore?
Some of their deals:
Advanced Life Sciences Holdings, Inc. (OTCPK:ADLS), American Asset Development, Inc. (OTCPK:AADI) (Pending), Asher Xino Corporation (OTCPK:AXNO) (Pending), Baobab Resources Plc (AIM:BAO), Bedminster National Corp., Bioflamex Corporation (OTCPK:BFLX) (Pending), Bioject Medical Technologies Inc. (OTCPK:BJCT) (Pending), City Loan, Inc., Coates International Ltd. (OTCPK:COTE), Commerce Planet, Inc. (OTCPK:CPLT), Competitive Companies, Inc. (OTCPK:CCOP) (Pending), Compumed Inc. (OTCPK:CMPD), Cordex Pharma, Inc. (OTCPK:CDXP), Cyber Digital Inc. (OTCPK:CYBD), Dinewise, Inc. (OTCPK:DWIS), DNAPrint Genomics, Inc. (OTCPK:DNAG), Eagle Broadband Inc. (OTCPK:EAGB), EGPI Firecreek Inc. (OTCPK:EFIR), Encompass Holdings, Inc. (OTCPK:ECMH), Enegi Oil Plc (AIM:ENEG), Enerlabs, Inc. (OTCPK:EGSR), FTS Group Inc. (OTCPK:FLIP), Green Energy Live, Inc. (OTCPK:GELV) (Pending), GTX Corp (OTCPK:GTXO), Halberd Corporation (OTCPK:HALB) (Pending), HealthLinx Limited (ASX:HTX), Houston Lake Mining Inc. (TSXV:HLM) (Pending), iCo Therapeutics Inc. (TSXV:ICO) (Pending), Independent Bank Corporation (NasdaqGS:IBCP), Innolog Holdings Corporation (OTCPK:INHC) (Pending), Integrated Pharmaceuticals, Inc. (OTCPK:INTP), LAB Research, Inc., LOGIC Devices Incorporated (OTCPK:LOGC) (Pending), Lomiko Metals Inc. (TSXV:LMR) (Pending), m-Wise Inc. (OTCPK:MWIS), Mannatech Inc. (NasdaqGS:MTEX), Medivac Limited (ASX:MDV), Metal Storm Limited (ASX:MST), MethylGene Inc. (TSX:MYG) (Pending), Metro One Development, Inc., Micro Imaging Technology, Inc. (OTCPK:MMTC), Motopia Limited (ASX:MOT), Nordic Oil & Gas Ltd. (TSXV:NOG) (Pending), Oracle Coalfields Plc (AIM:ORCP) (Pending), Pacel Corp., Patient Portal Technologies, Inc. (OTCPK:PPRG), Payment Data Systems Inc. (OTCPK:PYDS), Platinum Studios, Inc (OTCPK:PDOS), PolyMedix, Inc. (OTCBB:PYMX) (Pending), Prime Petroleum Group, Inc., Range Resources Ltd. (ASX:RRS), Resource Holding Management Limited (AIM:RHM) (Pending), San West, Inc. (OTCPK:SNWT), Save the World Air, Inc. (OTCBB:ZERO), Seawright Holdings, Inc. (OTCPK:SWRI), Sofame Technologies Inc. (TSXV:SDW) (Pending), Solo Oil PLC (AIM:SOLO) (Pending), Somerset International Group, Inc., SPO Medical Inc. (OTCPK:SPOM) (Pending), Sun TV Network Ltd (BSE:532733), Sunkar Resources Plc (AIM:SKR), Tank Sports Inc. (OTCPK:TNSP), TurboSonic Technologies Inc. (OTCPK:TSTA) (Pending), United Protection Security Group Inc. (TSXV:UZZ), ValiRX PLC. (AIM:VAL), Video River Networks, Inc. (OTCPK:NIHK), Viking Systems, Inc. (OTCBB:VKNG), Viper Resources, Inc. (OTCPK:VPRS) (Pending), VirTra Systems Inc. (OTCPK:VTSI), Walker Financial Corp. (OTCPK:WLKF)
Auctus Private Equity Fund LLC is currently active. The MD, Lou Posner, used to be VP Corporate Finance at Dutchess.
Deals:
Aqualiv Technologies, Inc. (OTCPK:AQLV) (Pending), Capital Reserve Canada Ltd. (OTCPK:CRSV.F) (Pending), Coastal Pacific Mining Corp. (OTCPK:CPMC.F), CRC Crystal Research Corp. (Pending), CYIOS Corp. (OTCPK:CYIO), DigitalTown, Inc. (OTCPK:DGTW) (Pending), Eagle Oil Holding Company, Inc. (OTCPK:EGOH) (Pending), EVCARCO, Inc. (OTCPK:EVCA) (Pending), Exergetic Energy, Inc. (OTCPK:XNGR) (Pending), Feel Golf Company, Inc. (OTCPK:FEEL) (Pending), Green Energy Live, Inc. (OTCPK:GELV) (Pending), GreenGold Ray Energies, Inc. (OTCPK:GRYE) (Pending), ImmunoCellular Therapeutics, Ltd. (AMEX:IMUC), Insight Management Corporation (OTCPK:ISIM) (Pending), Island Breeze International, Inc. (OTCPK:IBII) (Pending), Microgenix Manufacturing Inc. (Pending), Monster Offers (OTCBB:MONT) (Pending), Rebel Testing Inc., Revolutions Medical Corporation (OTCPK:RMCP), Rising India, Inc. (OTCPK:RSII), Seaway Valley Capital Corporation (OTCPK:SEVA) (Pending), Solanbridge Group, Inc. (OTCPK:SLNX) (Pending), Steele Resources Corporation (OTCPK:SELR) (Pending), StrikeForce Technologies, Inc. (OTCBB:SFOR) (Pending), Sunshine Heart Inc. (ASX:SHC), Sunvalley Solar, Inc. (OTCPK:SSOL.D), Winchester International Resorts Inc. (OTCPK:WNCH) (Pending)
Every pennytrash company I've ever looked at with toxic "financing" quite obviously knew exactly what it was doing. As management, you'd have to be completely cretinous not to.
I guess there must be some companies out there which are managed by total cretins, but I doubt there are very many of them.
The US needs something like the penalties you find in other places against directors for allowing a company to trade while insolvent.
JF's motion to compel denied. I guess that now they either agree on the plea deal as offered by the govt (same as JL's) or the case goes to trial in mid-Oct.
Remember where the case had gotten to when they settled.
All of VRAL's claims against T&T had been dismissed - all the Harry Jr stuff, all the allegations of T&T trying to drive them into bankruptcy etc etc - except for a breach of contract claim alleging T&T should have funded an additional ~$500K (I think) for the SA trial. And the individuals had been dismissed as defendants, so the claim was just against the T&T LLC entity, which I would guess had no assets. In other words, VRAL probably had nothing to gain from going to trial.
On the other hand, VRAL and Haig had never moved to dismiss T&T's claims against them - ie that they lied about having clear ownership of the patent, and that they lied about not having already sold the African rights to another party before T&T. So those claims were going to trial, with the possibility of several million in damages being awarded not only against VRAL but also against Haig *personally*.
I see the settlement basically as VRAL printing off shares to get Haig (as well as itself) off the hook. No sign that Haig wore any of the pain; the company and its shareholders gave him a free ride, it seems.
VRAL touting the outcome as a victory was ridiculous, IMO - $1.9M for regional rights for a drug which is years and many millions away from reaching the market, if ever ...
No idea how T&T would have fared in court, but if their claims re the patent and African rights were weak, why didn't VRAL move to dismiss? Dunno - but in any case, I guess it was safer just to settle by printing off a bunch more gambling chips oops shares, rather than risk the court decision.
Q2 report filed at OTC Markets. Don't see anything new on the biz front, but some things of interest on capital etc.
They say they are pre-paying the $450K T&T tranche due in November by issuing 99M+ shares of common. That's around $0.0045 per share - dunno how they get to that price - seems high - but if accurate it obviously looks better than a deal based on cuurent levels. Presumably those shares are being dumped now, or will be soon.
No word on any reset to the DMBM conversion price, but this is interesting:
In the three month period ended June 30, 2012 the Company received additional advances aggregating $263,300. It is the intention of the Company and DMBM to enter convertible debentures with similar terms to those previously issued. For purposes of these financial statements these advances have been treated as if convertible debentures were issued. Although there may be modifications.
At the current $0.0025 conversion price that's another 100M+ shares required. Presumably the reason for delaying entering into the convertible agts for these advances is that the "modifications" involve a reset of the conversion price requiring more conversion shares than they have available, so they need to increase A/S or do a R/S or something first.
In the 6 months to 30 June DMBM converted $427K in principal into 170M+ conversion shares at $0.0025, presumably all dumped. VRAL says that DMBM's paper profit from the huge discount to market prices in that period was $1.7M. No word in this report on what possible justification there could be for delivering such an enormous (5X on paper) short-term return to DMBM at the expense of common shareholders; find it hard to imagine what justification they could offer.
Interesting things with the preferred stock. Recall that the Series A pref shares control the company, being guaranteed 50.05% of the shareholder vote, no matter how many shares of common stock are on issue. Each pref converts at holder's will into 10 shares of common - at the moment.
- They intend to swap the options and warrants held by Newell, Haig, Capizzano and Berliner into an unspecified number of prefs. These option/warrants are deeply, deeply out of the money. It escapes me why insiders should be given control stock in exchange for effectively worthless paper. (BTW, why isn't Monica Ord included in the sweetheart deal? Is she still with VRAL?)
- They are filing to increase the number of these prefs authorised from 5M to 10M. At the same time, Haig is swapping $252K of the amount owed by VRAL to his Best Investments into 3.5M of the prefs. How come?
The new certificate of designations defining the terms of the prefs isn't included with this report, which absolutely sucks - are there any other changes being made apart from increasing the authorised - any changes to conversion coditions which would benefit holders in the event of a R/S?
Whenever you see insiders playing around with prefs in a Delaware "blank check" company like VRAL there is reason to be nervous. The board (ie Haig and his brother) can do pretty much what it likes with the terms of prefs. Eg: a classic pennyscam ploy is for insiders to use prefs as a lifeboat to ride thru a R/S, fiddling around with the conversion terms to preserve or increase their positions post-R/S.
Interesting to see what happens here ...