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It'll be a great story if it happens - ugly-paper-printing-scam-duckling turns into a real biotech/swan. Don't see that very often!
This is an interesting analysis: http://www.nature.com/bioent/2013/130301/full/bioe.2013.3.html
Double/nothing it is!
The people you cite are helping VG with VG1177. Some of the consulting contracts are in the attachments & my reading of them is that things are still at a very early stage. This is confirmed by the commentary on p7:
We began animal toxicity studies [on VG1177 ] in November 2013[..] These toxicity studies are the prerequisite step before beginning a Phase I clinical trial. We expect these safety results in late 2014. We have engaged an additional team of industry consultants to guide us through this pivotal, pre-FDA planning stage with a specific focus on drug formulation, on-site inspections, clinical creation and other aspects of clinical planning. This group of advisors includes [those people you mentioned] ...
So at the very best they may have started a Phase I by the end of the year - surely not enough data to get anybody interested enough to do a meaningful deal on that timeframe. The consultants have been engaged at this stage to help put together the IND submission - a long way to go ...
In a recent filing, PwC says Walters, Monarch etc have now complied with subpoenas and further sanctions against them unnecessary.
Things I pick up from the Form 10 filing on a quick read:
- Haig's total comp including paper value of options etc for 2013 was $597,470. This included his salary of $92,500 as head of VGE.
- On VGE: While we believe that VG Energy could develop viable products, we are not investing significant resources in this subsidiary so we can focus our efforts on our drug development programs. (Item 1)
- None of our directors or executive officers has been involved in any bankruptcy or criminal proceedings (p58) This doesn't seem to be the case for director Arthur Keledjian, Haig's brother; pretty certain he is the Arthur Keledjian who filed for Ch7 in 2011 - case is 11-bk-33628 in CA central district.
- Date for getting a registration approved for Dutchess extended to August - the equity line financing doesn't kick in until then. Clear that the conversion pricing is determined at the time VG draws on this line. Agreement included in the attachments.
- Seems like fairly complete details on VG's various royalty agreements & on a very quick skim they seem pretty standard.
- Many attachments!
More later if/when I get around to it.
Owe you 20c!
The Form 10 filing: http://www.sec.gov/Archives/edgar/data/1091326/000101968714002510/0001019687-14-002510-index.htm
Nope, Dworkin's sentencing rescheduled once again, to 1 ug:
05/27/2014 22 SENTENCING MEMORANDUM by USA as to Daryl Dworkin (Attachments: # 1 Exhibit A - SEC Letter) (Paes, Winston) (Entered: 05/27/2014)
05/28/2014 23 SENTENCING MEMORANDUM by Daryl Dworkin (Marks, Jonathan) (Entered: 05/28/2014)
05/30/2014 24 SENTENCING MEMORANDUM by Daryl Dworkin (Marks, Jonathan) (Entered: 05/30/2014)
05/30/2014 25 Letter in support of lenient sentence as to Daryl Dworkin (Marks, Jonathan) (Entered: 05/30/2014)
05/30/2014 ELECTRONIC NOTICE OF TIME CHANGE OF SENTENCE as to Daryl Dworkin. Counsel are advised that sentence currently scheduled for 6/3/14 at 11:00am will be held at 2:30pm due to the unavailability of the Court at 11:00am. Should counsel have any questions, they are advised to phone Ms. Mulqueen at 718-613-2435. (Mulqueen, Ellen) (Entered: 05/30/2014)
06/03/2014 26 Minute Entry for proceedings held before Judge Raymond J. Dearie: Sentencing as to Daryl Dworkin held on 6/3/14. AUSA Daniel Spector and Winston Paes; Jonathan Marks for defendant. For the reasons stated on the record, sentence is adjourned to 8/1/14 at 10:30 AM. (Court Reporter: Lisa Schmid.) (Chee, Alvin) (Entered: 06/05/2014)
The govt's sentencing memo is sealed, but Dworkin's isn't, and from that it looks like the Probation Dept has recommended 2 yrs probation, no slammer time, based on:
He assisted the U. S. Attorney's Office and the S.E.C. in their investigations of N.I.R. As the Government has written to Your Honor, Dworkin provided substantial assistance to both agencies. He met with them extensively and was "exceptionally candid."
5K letter dated May 27,2014, p. 2. As a result of Dworkin's cooperation, the S.E.C. brought a successful civil action against Ribotsky. Ribotsky was required to disgorge $12,000,000 in profits, pay $1,000,000 in prejudgment interest and a $1 ,000,000 fine.
Latest from the court docket, below. Appears that sentencing should have happened on 6/3 but nothing about what sentence was given yet. (Management of docket filing sucks in Brooklyn, from what I've seen in other cases.)
05/27/2014 22 SENTENCING MEMORANDUM by USA as to Daryl Dworkin (Attachments: # 1 Exhibit A - SEC Letter) (Paes, Winston) (Entered: 05/27/2014)
05/28/2014 23 SENTENCING MEMORANDUM by Daryl Dworkin (Marks, Jonathan) (Entered: 05/28/2014)
05/30/2014 24 SENTENCING MEMORANDUM by Daryl Dworkin (Marks, Jonathan) (Entered: 05/30/2014)
05/30/2014 25 Letter in support of lenient sentence as to Daryl Dworkin (Marks, Jonathan) (Entered: 05/30/2014)
05/30/2014 ELECTRONIC NOTICE OF TIME CHANGE OF SENTENCE as to Daryl Dworkin. Counsel are advised that sentence currently scheduled for 6/3/14 at 11:00am will be held at 2:30pm due to the unavailability of the Court at 11:00am. Should counsel have any questions, they are advised to phone Ms. Mulqueen at 718-613-2435. (Mulqueen, Ellen) (Entered: 05/30/2014
Dutchess is kind of interesting. They were one of the big toxic pennyscam "funders", pretty much the same kind of thing as Ribotsky, Cornell/YA Global, Laurus etc etc. (Some people seem to think Ribotsky was a scam-genius who invented this stuff - actually, he was just one of a bunch of penny-grifters working the same scam, invented decades ago,)
Dutchess has never had any SEC or DoJ actions, as far as I know, but they have been sued by some of their investors for some of the same kinds of things as Ribotsky did: http://masscases.com/cases/app/84/84massappct75.html
They seemed to go dormant for a while, but now they are back in business. The head guy is Douglas Leighton, who these days seems to be all hot & sweaty over pot stocks: http://www.theglobeandmail.com/globe-investor/investment-ideas/investing-in-marijuana-a-growing-interest/article17070406/
However their recent deals seem to be less toxic than the pre-2010 stuff (at least on paper) and they actually do get involved with some companies which appear to be real even if troubled. See eg http://investorshub.advfn.com/boards/read_msg.aspx?message_id=100844521
Q1 report filed at OTC Markets; at least they're getting these done closer to the due date now.
On a quick skim:
- O/S up to 22.9M as of mid-May. That's up from 5.4M as of end March 2013, so more than 4X in a bit over a year.
- Cash at just ~$200K at end March. Do they get any more cash from Medbridge? No mention of the Dutchess deal that I can see; just generic statements about needing to raise more capital.
- Taking things at face value, VG Energy has been "inactive" at least since end 2013 (ref Item 1 of the quarterly). No big surprise but a company with good governance would have told shareholders that the VGE play didn't work out before now.
OMG - just imagine the inferno if all those fake bond certs caught fire.
Don't you get overwhelming urges to screw with these people?
Your messages need to focus on the company and the stock and should not contain comments about people who post on the board whether specific or in general. Other posters are never the topic of the board. That aside, I find that on a visceral level your eloquence and wit trigger certain glandular responses and I am willing to marry you any day next week except for Tuesday.
Also, PCAOB revokes registration of ACDU's auditor, Berman W. Martinez y Asociados, and bars Martinez himself, for bad ACDU audits for FY 2009-2011.
http://pcaobus.org/Enforcement/Decisions/Documents/2014_Berman.pdf
PCAOB revokes registration of ACDU's auditor, Berman W. Martinez y
Asociados, and bars Martinez himself, for bad ACDU audits for FY 2009-2011.
http://pcaobus.org/Enforcement/Decisions/Documents/2014_Berman.pdf
USPR auditor Jeffrey & Co registration revoked by PCAOB: http://pcaobus.org/Enforcement/Decisions/Documents/2014_Jeffrey.pdf
Also, PCAOB bars J & C staffer Paul W. Marchant for stupid bad stuff with respect to a couple of un-named J&C clients: http://pcaobus.org/Enforcement/Decisions/Documents/2014_Marchant.pdf
PCAOB revokes registration of Jeffrey & Company and bars Robert G. Jeffrey CPA for misconduct with respect to some China plays:
Asia Electrical Power International Group, Inc, Amanasu Techno Holdings Corp and Amanasu Environment Corp.
http://pcaobus.org/Enforcement/Decisions/Documents/2014_Jeffrey.pdf
Also bars J & C accountant Paul W. Marchant for stupid bad stuff:
Respondent failed to cooperate with a Board investigation and violated PCAOB rules and standards when he: (1) improperly altered, created, backdated and added to audit work papers; (2) assisted the Firm in producing these false work papers to the Division; and (3) falsely testified in connection with a Board investigation that these documents represented the Firm's work papers completed during the audit, when he knew they did not.
http://pcaobus.org/Enforcement/Decisions/Documents/2014_Marchant.pdf
OTC Markets lists J & C as auditors/accountants for ANSU, AIVN, AXIM, IPWG, USPR.
Love the one from his cellmate - never seen that before.
Yes, my 20c bet re the registration filing looks gravely at risk but I'm not letting anybody claw it out of my hand until I see an actual filing :)
Re T&T: Seems obvious that you'd rather have the right to convert at VWAP rather than at a fixed $0.367, when the VWAP is currently well below that fixed level?
Anyway, really need to see the entire agreement to work out what's going on. If they do get a registration statement accepted, I think the agt will be attached to it; presumably it would be material enough for that.
Re the science work: I think clearly the goal should be to get a credible strategic pharma partner & doing so would go a long way to validating everything. I have no idea how likely that is or how much progress they would need to make before it becomes a realistic prospect.
For the peptide stuff, they still haven't gotten past the pre-clinical animal work; now saying it should be completed by 4th quarter. If you go back over their filings, they've been estimating "a few more months" to do this, for years. Maybe they'll actually get it done, finally. But if they rely on the Dutchess "financing" for it, they'll obviously have to do something to increase trading volumes. Will be interesting to watch.
One fundamental question: Assuming that Newell-Rogers is crucial to the work, how much time is she spending on it, given her demanding-sounding day job?
I think the sup info details are inconsistent with the details you point out from the body of the annual. Who knows which is correct? VG really needs to get its reporting together - it's not rocket science.
As you say, if there is actually a fixed conversion price of $0.367 it would be a great outcome for VG. But why would T&T have agreed to this? As Mr Negative, I'll assume that the sup info is correct until further notice.
Well, seeing it closed at $0.48 on 28 Oct and was down to $0.20 by mid Nov, I don't think that was a bad call (tho calling penny stock prices is generally a loser's game and I usually avoid it).
From the supp info doc, the work-out with T&T is to extend the term of the $862K owing to 1 Jan 2020. In the meantime T&T can convert at VWAP whenever it wants to, and any amount remaining at the end of the term gets converted automatically.
That's not a terrible resolution, on the face of it - apparently no penalties etc etc - but the note is still a floorless overhang. Even tho they've reserved a certain number of shares for current purposes, the actual amount to be issued is unpredictable & will depend on the VG share price at the times when T&T chooses to convert.
Yes, they say they're working on whole bunch of different disease indications. Some might prefer them to show concrete progress with the previous targets before branching out.
Check out the record of security issuance in this latest supp info compared with the one filed late last year; why the differences and have they got it right this time? Given that author on the latest doc is the COO, Brennan DeRaad, you'd hope so.
I also note they've added this language to the MB and DMBM prom notes: "... and the right to convert the promissory note at any time." Does that override the condition that only 25% of the note is convertible per quarter, and not before Dec 2014? It's not very clear, but if so, it's certainly a material change. Eg: If they can't convert before Dec, and the Dutchess deal comes into effect in June, then MB/DMBM would be locked in & exposed to whatever dilutive effects the Dutchess deal might have before Dec. But if they are now allowed to convert whenever they want, I guess they can dump along with Dutchess (as can T&T).
Dworkin's sentencing finally going to happen on 3 June (unless it gets extended again, I guess):
04/10/2014 20 AMENDED NOTICE OF SENTENCING AND BRIEFING SCHEDULE as to Daryl Dworkin: Sentencing set for 6/3/2014 at 11:00 AM in Courtroom 10A South before Judge Raymond J. Dearie. Pre-sentence report to be disclosed on or before 4/18/14. Objections to pre-sentence report due 5/6/14. Defense sentence submission due 5/16/14. Government sentence submission due 5/27/14. Ordered by Judge Raymond J. Dearie on 4/8/14. (Chee, Alvin) (Entered: 04/10/2014)
Thanks again - that is interesting.
Digging into Viking a bit, it doesn't seem like a scam or an example of gross mismanagement; and it does seem like a Dutchess deal these days isn't necessarily the mark of a total POS, as it used to be.
On the other hand, this is surely still something you only do when there's nothing much else available. These deals aren't "investments" - Dutchess essentially just acts as an agent to immediately sell stock to punters, with profits locked in & not dependent on the share price. The mechanism is totally dependent on liquidity. The higher the trading volumes, the more stock the company can sell to Dutchess.
A POS company taking this kind of deal will pump things up to keep trading volume high, so it can get more $$$ from Dutchess - leading to more dilution & more pressure on the share price; and if punters are dumb enough to keep buying, you're in a classic death-spiral.
A company with reasonable management will use it sparingly in the hope of being able to achieve enough to get profitable, attract a real investor or whatever; which is what Viking did.
Assuming VG does get a registration statement approved and its Dutchess deal does go ahead, will be interesting to see which way it handles things.
It's interesting to look at Viking's documentation for the eventual CONMED deal: http://www.sec.gov/Archives/edgar/data/1065754/000101968712002960/viking_14d9-082412.htm
Think it's pretty clear from this that Viking had reasonable governance but also that it wasn't going anywhere, biz-wise. Falling sales, no sign of profitability. Cantor Fitzgerald did a good job scaring up the CONMED deal, but it was the only one on the table, apart from a dead-end deal with "Party A" which looks like an opportunistic attempt to get control of the IP etc for a small up-front; and another equity credit line with "Party B", I would guess Dutchess again.
The board's reasons for not going with "Party B" are worth looking at:
(i) an equity line of credit would have taken several months to become fully operational such that the Company could access financing; (ii) it was understood that the Company’s ability to raise capital under such arrangement would be directly tied to the liquidity of the Company’s stock and the recent trend of the stock had been one of low trading volumes and decreasing price; and (iii) the Company would need to incur an estimated $30,000 - $40,000 of expenses to register any shares to be sold under an equity line with no guarantee that any significant amount of capital could be raised in a timely way. In addition, there were concerns by the Board that an announcement of an equity line of credit could negatively impact discussions with strategic partners/buyers at this critical time.
Interesting, thanks.
I confess my negativity towards Dutchess is so entrenched that I'm taking this as a hint that there's something rotten in the state of IBCP & will now start digging into it a bit :)
See VG filed its annual at OTC Markets. A lot to go thru in this, but in one sense the most important thing is in the subsequent events section, where they disclose a $5M equity line of cedit agreement with Dutchess Capital.
Dutchess over its long-ish history has been one of the major toxic penny-crap "funders" & while it may possibly at some point have invested in a company which wasn't a scam and actually achieved something, I don't know of any.
Anyway, the deal presumably doesn't become effective until VG gets a registration statement accepted by the SEC (Dutchess of course needs unrestricted stock it can dump as soon as it gets it, or before), which VG undertakes to do by 26 June.
On a quick look, no other sign of getting a Form 10 filed or the involvement of KWCO PC. Myron Landin is given as the author of the annual financials doc.
See that Dutchess are active again, with a particular interest in pot stocks ... eg: http://www.theglobeandmail.com/globe-investor/investment-ideas/investing-in-marijuana-a-growing-interest/article17070406/
CR hadn't paid any of the SEC judgement as of 2 April. On that date the SEC filed a restraining order with the court, forbidding him from transferring etc any property in which he has an interest, with certain limited exceptions.
It also filed a similar restraining order against Stacey Ribotsky, with respect to any of CR's property, including money she apparently owes him.
Monarch Staffing subsidiaries lost their contracts with the CA corrections dept in 2012, over the stuff reported here: http://www.ocregister.com/taxdollars/strong-478800-walters-companies.html
(Not paying dentists etc amounts they were owed under contract.)
The main thrust for PwC seems to be investigating what happened with a $3M+ convertible loan which Monarch apparently got from AJW but which is missing from the records in PwC's possession.
Would be interesting to follow the money, wherever it went ....
Investors probably won't see much after PwC and their attorneys etc get their fees, I agree.
But on the assumption that the SEC actually collects anything from CR (unlikely?), it would probably go into a fair fund for distribution to investors.
Also, as part of the SEC settlement, private litigation by PwC etc against CR effectively gets first bite, in the sense that the $14.5M SEC amount gets reduced by whatever the private litigation can chisel out of him.
Presumably PwC will litigate against service providers and marketers, and there might be something to be gotten from that. It'll also be interesting to see if PwC tries to claw back anything from those investors who managed to strong-arm redemptions from CR back in the day.
Anyway, it'll take years to resolve, no doubt.
The debts are to the funds - AJW etc - not to NIR, the former manager.
David Walters, Monarch Staffing Inc., Monarch Bay Securities, LLC, and Monarch Bay Associates, LLC adjudged to be in civil contempt by the judge at a hearing on 9 April, for not responding to PwC's document & examination requests.
Walters made no response to PwC's motion for contempt and apparently ignored the hearing.
He has to pay $2K towards PwC's attorney fees, provide the docs by 28 April and appear for an examination on 12 May. If he doesn't, he has to appear before the court on 2 July to explain why he shouldn't be further sanctioned.
Not exactly the behavior of somebody with nothing to hide :)
Interesting, but why would CR have converted notes back in the day without dumping the shares - if that is what you're proposing?
Makes sense to me.
I guess one possibility is that PwC has sold some positions to spivvy players - which would make PwC an arms-length spiv :) I'd think that more likely than PwC playing P&D games itself.
If the US was the main venue for the bankruptcy case the receiver would file status reports, available thru PACER, which would provide details on this kind of thing. Unfortunately, that's not the situation here.
I agree that the lack of any apparent pump campaign recently is a possible sign that things aren't as bad as they used to be with VG - maybe. Better signs would be:
- Getting a credible auditor.
- Getting rid of Haig and his brother.
- Getting rid of DMBM.
- Getting some independents on the board.
- Getting a credible biotech CEO.
- Full & timely disclosure.
- Sorting out the capital structure.
Just download the docs, open them up & check the "Author" field under Properties. Standard diligence when looking at pinkies :)
See they've filed a late-filing notice for the annual, yet again. With all the bods they say are now working with VG, I can't see any valid excuse for this & I just assume that they want to delay disclosures while insiders dump.
Also see that O/S are up to 19.5M as of 31 March: http://www.otcmarkets.com/stock/VGLS/company-info So another ~2M common issued over the quarter.
If you look at the properties of the Jan 16th docs, you'll see the author is one "kbechler".
Fair guess that this is Kyle Bechler, previously a staff accountant at TynanGroup, then moved to a Santa Barbara-based asset management outfit.
http://www.linkedin.com/pub/kyle-bechler/54/879/652
http://www.peritusasset.com/about/people/kyle-bechler
No idea why he'd be moon-lighting for his old boss, if that's what it is.
Wonder how the Form 10 is coming along? They said last year sometime they were hoping to get it filed & approved by the SEC & so become fully reporting this quarter.
I bet 20c they never really went anywhere with it, or gave up when they realized how much work it would be getting through the SEC review process etc. But happy to be proved wrong.
If they have actually been working on it - including the audits for the last two years a little company like VGLS requires for a Form 10 - you'd think that maybe for once they could get an annual report filed on time ie next week sometime.
The auditor, KWCO PC, doesn't look very good from its last PCAOB review: http://pcaobus.org/Inspections/Reports/Documents/2014_KWCO_PC.pdf
The PCAOB reviewed its audits for three issuers, and found problems worth commenting on in two of them. I guess if you are a glass-half-full kind of person you could say that this criticism might cause KWCO to get its act together better for the VGLS audits ...
It sure does.
Perhaps DeRoos and the other scammers all live in the same trailer park?
Hope the SEC etc don't put this in the too-pathetic-to-litigate basket.
Can't we just assume drugs?
It's usually pretty much the answer, when things don't make sense.