Well okay here's Paul's trick, which I did not realize at the time but now know since they found their way onto the market.
Okay, Paul allegedly has some convertible note that allows him to convert the debt to stocks.
He issues a directive to convert the shares.
His position, and Michael the transfer agent's position, is since the alleged convertible debt is more than two years old, they are free trading.
So Paul says the debt occurred in 2003, so he can issue shares, and the shares are converted at whatever rate, sort of like an option.
Paul has the shares converted, but since it is his debt, he can direct they be issued to whomever. So he just issues the order to give them to whatever person he chooses.
Now when I signed the conversions based on PT's claim that there was this alleged debt, I signed off on the fact that they would be issued as 144 restricted. However, Michael and PT issued them as unrestricted since the alleged debt was two years old.
Now my position is they should have been 144 restricted even if over two years old because Paul Taylor is an insider. His nominees control the company. Since he was an insider, all his shares should have been 144 restricted. Moreover, since he was a control person, he needed to notify the SEC as to the basis for his sale of shares. The transfer agent knew PT was a control person, and the transfer agent turned a blind eye to all this.
See if you have shares, or even if you are converting debt, so long as you are not a control person, they may not be restricted if the conversion was based on a note over two years old. A control person is someone who has 5% of the voting stock or controls the company.
Paul Taylor could not convert large chunks as that would have made him a control person, so he chose to issue the shares in piecemeal, sell them, then say, "I'm not a control person."
This is why he was just a "consultant" to the company. As a consultant, maybe he's not a control person.
But I can attest that, in my capacity as officer, I took directions from Paul Taylor. I was hired by Paul Taylor. My salary was set by Paul Taylor. Every document I signed was propounded by Paul Taylor. Every proposal I had was forwarded to Paul Taylor. Investor complaints or inquiries were referred to Paul Taylor. The transfer agent consulted with Paul Taylor about each and every transaction. The transfer agent ignored my instruction to stop speaking with Paul Taylor.
As such, Paul Taylor was effectively the control person at the company. Thus, if he had legitimate debt, and I don't think he did, it needed to be restricted. If Paul Taylor wanted to sell shares on the market, he needed to file the necessary docs with the SEC, the same way any company does if an insider is selling shares. And if Paul Taylor sells stock to someone like Frank, he needed to file a notice that a Regulation D transfer occurred because PT was an affiliate.
If you sold your shares to Frank, no form needed to be filed.
So that's that.
Certainly Frank could have gotten a 144 opinion by stating that PT obtained the shares via debt, and that PT was not an insider, just some consultant. Tell counsel that PT runs the show, then there's no 144 opinion coming.
RCA
AI
