Yes the stock is currently 144 ineligible. According to the attorney I spoke to, DKTS lost its 144 eligibility upon the settlement agreement with Huffman and Co. last year. At that point, it was deemed a shell. Unsecured Lenders who gave funds to Pierce in 2014 prior to the settlement agreement with Huffman and Co. did so because Rule 144 was available at the time the money was sent. Use of proceeds was very specific as to how the money was to be used. I believe this is why Lenders (rightfully so) were so upset when Pierce and Co. moved 75% of the assets to ISBG without being notified. Use of Proceeds would have included obviously everything to do with Besado which was to be the company's flagship brand, including production, marketing, sales, etc. So, folks who loaned the Company money were rightfully upset in that they had no way to collect unless the Company or a third party paid them back since they could not convert debt to equity. In addition, there was a basement provision put into the convertible notes which I'm told is significantly higher than the current stock price of DKTS.
I was only suggesting based upon what I wrote above, that it makes economic sense to audit DKTS since they were auditing ISBG anyway and it would involve auditing the brands moved over from DKTS. After the audit is completed, a Form 10 could be filed and the Company, now having operations would not be deemed a shell, hence the ability to rely upon Rule 144 would be restored. If this is done as I have suggested, there would be no dilution in ISBG which I'm certain ISBG would love to avoid and theoretically, DKTS should trade at about a 75% discount to ISBG on a market cap weighted basis. If this is the case, it makes economic sense to keep unsecured DKTS lenders in DKTS. Yes, this would cause DKTS dilution unless the debt is satisfied by cash payment. But Pierce would end up with a fully reporting SEC filer with only 360 K worth of debt at worst.
The only thing IMO, that really mattered was the success of the brands. Without that, there would be no options for anyone, whether they owned debt or equity, it would have been ugly. if he and the Company are successful, then everything changes clearly. So now we wait to hear the details of this contract that was tweeted out this morning. Hope this helps
