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Check out this angled overhead view of the place (The red arrow indicates that same 'house') from google maps
All four of the 'houses' we see on that side of the street have significant commercial parking in the back...they look like old homes that have been converted into an office park of sorts.
Perhaps that doesn't inspire the greatest confidence, but it's nowhere near as sketchy as having 20 businesses registered to a typical single family home, as it initially appeared to be.
Apparently there's a link for each individual page....try this:
https://imgur.com/kgtYKTM
https://imgur.com/DnfK0n4
https://imgur.com/b4ZUJIE
https://imgur.com/Y1734VM
https://imgur.com/EcNrx6c
https://imgur.com/gtvKxpt
https://imgur.com/dmOq0dY
https://imgur.com/9AiwsFr
https://imgur.com/atAtUPR
https://imgur.com/wKENJ67
https://imgur.com/fncgyxG
https://imgur.com/8fulTeQ
https://imgur.com/mivm7Dz
https://imgur.com/R2byE2y
https://imgur.com/oUcI25C
https://imgur.com/sqIOz4s
https://imgur.com/zcGLt0C
https://imgur.com/Ffmgl5X
https://imgur.com/viLNjiQ
https://imgur.com/sARLwno
Him funding the buyback is part of the supposed "DD" that's been posted here, it's not something that I came up with.
The company is broke, so the money has to be coming from somewhere....I think Greg Rotman might be the alleged source of the claim. It's been posted hundreds if not thousands of times in this thread.
But I think the fact that he took out this loan indicates that he probably doesn't have any money. Otherwise, why not loan the 80k to VYST himself, especially if he's prepared to spend multiple millions on the buyback? It just doesn't make any sense.
I agree. And it's Steve Rotman's signature on that note, not the former CEO as some have been claiming.
After reading the terms of that note, there's no way in hell I'd sign that for a measly 80k. And he's supposed to be this mega-successful furniture dealer that's funding the share buyback out of his own pocket.
So why would a multimillionaire take out such a piddly loan with such insane terms?
Those types of loans are only taken out by folks with no other options. You could borrow money from the mafia with better terms than that note.
No, I wouldn't. Besides the 26M shares they're seeking, they're also seeking damages of at least $4.2 million, as well as their legal fees reimbursed.
As far as the buyback, the terms of the 12% note forbids VYST from doing any kind of buyback without permission from EMA, until the note is paid off in full. So they can't legally buyback anything until this matter is resolved, at the very least.
The other convertible notes that are still outstanding might also include terms forbidding share buybacks, although I haven't read them so cannot confirm such.
How do you know they tried to pay them? And did they follow the procedure for prepayment laid out in the note? Can you provide a source for this info?
The amount of shares sought is based on the formula for conversion spelled out in the note...it's not some random number they chose.
The fact that EMA might come out with millions more worth of stock than the amount of the loan is irrelevant. The stock was worthless when the loan was made, and thus the terms for conversion reflect that. VYST agreed to it.
These lenders often don't get paid back in cash and have to take shares of often worthless companies....the fact that this one miraculously happened to appreciate doesn't mean that VYST gets to renege on the deal.
I agree this suit is not a big deal. What's another 25M shares when the AS is 1.5 billion already? It mainly just reflects poorly on the perceived competence of VYST management.
EMA filed a motion with the court...a judge reviewed their complaint, and their evidence, and agreed to grant their motion...which means VYST was served a summons to appear in court to explain to the judge why he shouldn't order VYST to honor the conversion requests. The judge could've denied their motion if he thought it was without merit.
At that hearing, it will be VYST that has to convince the judge not to award EMA the shares they seek, because EMA has already convinced the court that they have the right to those shares based on the terms of the note.
I'm not sure who, or if anyone, benefits from this fiasco.
If the share price falls significantly, the lender might win the suit but will be awarded with less valueable shares by the time its all over.
VYST could've just printed the shares to pay them off and make this go away at virtually no cost. If they win the suit, all they gain is the satisfaction of keeping shares from the lender...but if the price falls, even a win in court could be a huge net loss.
Interestingly, I noticed clause in the 12% note that prevents VYST from buying back any stock without the permission of the lender...so if they're in a state of default with regards to this convertible note, they can't legally buy any shares back until the entirety of the debt to EMA is paid back.
Link to Securities Purchase Agreement
https://imgur.com/wmXpBcc
There was also an SPA submitted as evidence....working on linking that as well
Link to view Terms of 12% Convertible Note
Here ya go:
https://imgur.com/AIhKkF5
Link to view EMA Financial v. VYST Complaint
Not sure if anyone has posted a copy yet, but here's a link for those who'd like to read it for themselves.
https://imgur.com/a/B1gq21a
I just finished reading the complaint. It's pretty cut and dry.
EMA says it tried twice to convert outstanding debt into common stock as per the terms of the note, but VYST refused to honor the conversion, allegedly because honoring the conversion would provide EMA with "too great a profit"
So EMA is alleging breach of contract, due to VYST's refusal to honor the notices of conversion as per the terms of the note.
They also allege that VYST switched transfer agents recently, but didn't inform EMA as per the terms of the note.
Additionally, they claim that VYST has failed to maintain the required collateral shares with the transfer agent allow for the full conversion of the debt as per the terms of the note.
They're asking the court to order VYST to honor the terms agreed to in the note and hand over the shares they're owed (totaling roughly 26 million shares), unrestricted, so they can sell them whenever they wish..(the Court has granted EMA's 'Order to Show Cause' request which means VYST will be issued a summons to appear in court)
They're also seeking monetary damages of at least $4,226,187 with the final amount to be determined in court. They're also seeking compensation for their legal fees.
I think that mostly covers the pertinent points contained in the complaint.
Vystar CAN'T buyback shares yet-
They have no cash.
Any cash used must be disclosed in the financials. That won't happen for months.
All convertible notes must be paid. That is why you see the Ema lawsuit.
In any event, the Ema lawsuit by itself tells you that no buyback is happening anytime soon.
Thank you for the thoughtful response.
I've recently arrived at a different theory, although mine is admittedly much more pessimistic.
They raised the A/S to 1.5 billion on Jan 4th, I believe (effective Jan 2nd).
This stock, up to that point, was on life support, trading in the triple zero range with very little volume. But starting around Jan 2, volume began to rise inexplicably. Just a few days later, the 'new DD' began to appear, which laid out the current narrative of the Rotman's merger and stock buyback. This was the beginning of the current run up.
All of a sudden Greg Rotman was available to field calls from investors to confirm the 'new DD'. Just a few days/weeks prior, you can find several posters in this thread complaining about the lack of transparency from management and their failure to return calls and emails from shareholders.
It was as if this company had miraculously done a 180 and was now poised to make a run up to the Nasdaq!
It's my current suspicion that the January AS increase of 500M was done in order to pay a stock promoter to pump new life into VYST....this would explain the volume increasing and the 'new DD' and new narrative that was laid out....and the timing all fits together eerily well...I hadn't thought of this until I saw it mentioned yesterday that Rotman's is getting involved with some stock promoter in the near future to make some new videos and other promotional items.
I urge anyone interested to go back to the beginning of this thread and see for themselves how, and when, this all started and make your own judgement.
With no filings expected until the end of March, we unfortunately have quite a while before the actual truth is revealed, I suspect. If I'm wrong, this stock obviously goes parabolic when the filings finally hit, and this goes down as one of the greatest OTC plays ever. If I'm right, this goes down in history as just another OTC pump and dump. Time will tell...
Theoretically, it's a neutral action that shouldn't raise or lower total value.
But there seems to be psychological biases that tend towards the downside for reverse splits, for whatever reason. And it tends to be opposite for regular stock splits, which increase total shares but are usually regarded as bullish, perhaps for the simple reason that people perceive a doubling of the number of shares they hold as a net win for whatever reason.
Also probably a lot of the dislike in otc market is due to the shenanigans pulled by so many unscrupulous companies over the years that abuse the system by massively diluting their shares, then reverse splitting, only to dilute again, over and over.
But to answer your question, it shouldn't be a bad thing for VYST or their shareholders.
Re: the AS issue....if you believe that VYST had to create a billion shares for their treasury to hold for some past convertible notes, then I guess there's no reason to be worried.
I personally find that explanation to be lacking of credibility. If these notes are old and never hit the market, and were paid off beforehand, as we've been led to believe (supposedly all convertible debt was paid off, except for a single note for 100k-ish or something due sometime this month), then I find the notion that they had to create another half billion shares in January (in addition to the half billion shares they created in Nov) to act as collateral for notes that no longer exist to be highly dubious. To each their own...
Re the 36 PE ratio, you're obviously free to use whatever metric you please, but I find that multiple to be extremely misleading and inaccurate. I looked at as many furniture stocks as I could find just now, and I can't find a single stock that trades anywhere near the 36 multiple you prefer using. Here's a brief list of what I found:
Company.....................PE Ratio
LayZboy.......................17.54
Ethan Allen...................15.18
Bassett.......................24.59
Leggett & Platt...............15.86
American Woodmark Co..........22.21
Hooker Furniture..............11.27
Sleep Number Corp.............16.73
Tempur Sealy..................22.75
CompX Int'l...................11.09
Herman Miller.................16.18
HNI Corp......................19.48
Knol Inc......................14.40
I get that Greg Rotman thinks using a 36 PE for valuations is the better choice, but there's a clear conflict of interest there. Also, there's not a single furniture sector stock trading anywhere near a 36 PE, at least that I could find.
Nobody is claiming that VYST will never do a small reverse split if necessary to achieve their Nasdaq up listing! What people are trying to educate you on is the fact that no reverse split has been voted in here...and if/when that ever changes, then all the joe retail VYST shareholders will be the very 1st ones to know it, because we will all receive a Shareholder Proxy Vote Notification 30 days in advance of any reverse split vote at any ratio!
The Company has received an executed written consent from a majority of shareholders of the Company’s common stock with respect to taking the following actions:
...
...
6.
To authorize a reverse stock split of the common stock of the Corporation at any time over the next 12 months in the Board’s discretion, at a range from 5:1 through 50:1;
A few thoughts on your current valuations.....
You can't add the total NOL to revenue to make a valuation.
An NOL can be used to reduce future taxable income. The $31M NOL that VYST is carrying means up to $31M in future revenue will be tax exempt.
With a corporate tax rate of 15%, that means the total value of the NOL is $31M x .15 = $4.65M in taxes that don't have to be paid.
(For simplicity's sake, I'm ignoring any MA state corporate tax savings that may exist, due to MA's extensive stipulations on the use and amounts of NOLs permitted by the state for tax reduction purposes)
That's actually being a bit too generous, as it assumes they'll use the entire value of the NOL and ignores the time value of money, which would lower the value of the NOL depending on how many years it takes VYST to fully utilize the NOL.
So the value of the NOL is probably closer to $4.5M. This point alone will cut your valuations by more than 50%.
And that's ignoring the 500M outstanding shares number you're using. That's a very optimistic guess, and represents the absolute best-case scenario.. The TA is gagged, and there are 1.5 BILLION authorized shares. Assuming the OS is still anywhere in the realm of 250M-500M is pretty naive, imo.
Also, according to Zack's, the previous 5 year average PE for the home furniture industry is 14.71. (see link below)
https://www.zacks.com/commentary/191364/home-furnishing-industry-outlook-margin-pressure-to-continue
If we use that PE ratio, which seems more appropriate, and a 1.5 billion OS (which represents the worst case scenario regarding share structure based on current data) the valuations are reduced from $3.51 & $2.77 per share to $0.21 and $0.10 per share, respectively.
That's also assuming, of course, that everything we've been told about the merger is accurate. So far, there's nothing verifiable about it besides VYST mentioning that the board of directors has granted approval for the acquisition of 58% to 100% of Rotman's in their last SEC filing. (I personally don't consider bluster from the CEO's son to be verifiable proof that the merger is a lock)
Whats your source for this OS?
If it’s accurate, it means that the treasury has 1.2 billion shares it allegedly has to hold as collateral for convertible debt. (Even though there’s no convertible debt on the balance sheet and, as they’ve been stating repeatedly, there’s no more outstanding convertible debt...so make of that what you will)
I have shares. What's in question is do I load up on more or not.
I don't like holding bags. It sucks.
If everything is kosher and this stock is what it says it is, then me asking questions can't possibly affect your well-being. In fact, you should be welcoming all the doubters and shutting them down casually with verifiable facts. It only strengthens the stock. And if there are problems, don't you want to find out about them now instead of being blindsided when it all goes to hell?
But there's a ton of people here that are terrified of the slightest scrutiny. They just want to pump the hell out of this, copy/pasting the same spam over and over, high fiving each other, and burying any meaningful discussion of the underlying under an avalanche of shitposts. It's kind of sickening and is actually a disservice to the stock, imo.
So it's standard.
In that case, I think the valuation estimates in the sticky are probably way off base, given that they assume a 500M OS. If we can reasonably expect to issue a billion shares for the acquisition, it seems like a numerator of 1.5B would give a more accurate estimate.
The reason I'm surprised by this, in part, is because I thought I saw a post detailing the specifics of the deal, something like half in cash and half in shares, to be bankrolled by Rotman. I also thought the number was much smaller than what a billion shares would equate to, which would be something like 30 million if we assumed no decrease in PPS was to occur.
The only thing still nagging me is the predatory loans the company has been taking out throughout 2018. The terms seem atrocious for these relatively small sums, but I suppose that VYST could just have such poor credit that there were no other options.
Ok, i'll try to explain it better.
The AS was 975M in November...and their intentions to purchase Rotman's were also made public around the same time.
If the OS is really 500M, then they already had approval to issue another 475M. So why did they have to expand the AS to 1.5B in January?
If they were to utilize that capability in full, they would effectively triple the OS from 500M to 1.5B.
So I'm asking, does that seem typical? What contingency could they be preparing for that would require a billion shares? And would it make sense given that they claim to want to buy back shares? It seems suspicious to me.
Well, the AS was just shy of a billion as of November. And they just made it 1.5 billion about 3 weeks ago.
I say unaccounted for because if we're to accept that the OS is 500M, then there has to be an explanation for the continuing expansion of the AS, wouldn't you agree? If they never issued the 975 million that was authorized in Nov, (an let's say they only used half of it), would they need to amend the articles again to include an additional 500M shares if they were already sitting on the capability to issue 500M? If so, what are they expecting migbt happen that would require them to triple the OS? Is that typical? Especially while they're simultaneously announcing a buyback program?
Why are we even dividing by 500 million? There's no evidence that indicates the OS is 500 million. It's just been repeated over and over with no source given.
The AS is 1.5 billion, so it seems to me we need to come up with a good reason to ignore that extra billion shares before we just accept that the OS is actually 500 million.
I posted this question earlier and someone commented that the extra shares were prob for the Rotman's acquisition. But we're talking about a billion shares essentially unaccounted for....even if the latest increase in AS from 1B to 1.5B is for Rotmans's, we're still looking at 500 million shares that are still seemingly unaccounted for.
O/S=500 million but A/S=1.5 billion?
It's stated in the stickied posts that the current OS is roughly 500 million shares. Yet the latest amendment to the articles of incorporation authorizes 1.5 billion shares, and was filed just a few weeks ago. And the amendment before that authorized 975 million shares, back in November I believe.
Can anyone explain how the 500 million O/S figure in the stickied posts is derived? Why is there seemingly a billion shares unaccounted for?
Excuse my ignorance if there's something simple I'm overlooking here.
Where are these numbers coming from?
In their latest filing with GA Sec of State (from just about a month ago), they amended their articles to authorize 1.5 billion shares of common, which is up about 500 million from the previous amendment, which authorized ~970 million shares of common sometime in Nov if I remember correctly.
I might just be confused about what's actually being discussed. If so, i apologize in advance.
It's a POS because the former management focused on selling the latex in bulk...these guys are taking the brand and patents and making their own retail products to sell at a nice markup, instead of trying to sell the latex as a commodity item in bulk with almost zero profit margins. And they're in a pretty good spot to know what retail customers will buy.
I did see that...I'm just being paranoid I guess. It seems too good to be true lol.
So he pays his kids 4k a week roughly?
Nothing earth-shattering about that, imo.
Are you not even a little bit worried that this is an elaborate hoax? I've got a smallish position that I'm holding no matter what and I'm inclined to believe management, but there's still a small chance in my mind that we're being played for the Herb.
I'm not sure if anyone knows the terms of the deal right now.
that's why we desperately need to see some paperwork filed on all this in order to be 100% sure. If it's legit, the stock goes thru the roof instantly imo.
Management has already gotten authorization from a majority of shareholders for a RS, anywhere from 5:1 to 50:1, at any time in the next 12 months, at their discretion.
This was in their last SEC filing, in Nov if I remember correctly.
So he can roll the net operating loss over into the new entity? And lever Rotman's to get to the Nasdaq? Making his friends and family wealthy in the process? Just a guess.
I thought I read that insiders hold 25% of the outstanding, not 75%. But I'm not sure where I saw that at the moment, so I can't confirm it.
Absolutely...I personally consider the buyback to be just lagniappe in the big picture... a nice bonus, but almost irrelevant to the fundamentals underlying the business.
Supposedly they had to announce the buyback or it's illegal insider trading. I'm sure they would've loved to buy at a lower price if possible.
The board authorized up to 250M shares to be bought back. But now that the price has changed so drastically, I wouldn't expect the buyback to be anywhere near that many shares. IMO.