Hangover Joe's Holding Corp. (fka HJOE)

[james885]

So KBM was created and Seth Kramer made president to get around the restrictions placed on Curt Kramer by the SEC and FINRA. I doubt either the SEC or FINRA are going to be very happy about that. But both Curt and Seth Kramer have already proven they don't care what laws they break or fraud the commit as long as they can line their pockets with more cash.

FINRA’s action in the Ecolocap case could have far-reaching effects. The kind of toxic financing offered by Asher is extremely dilutive. Typically, the funder gives his client companies cash in exchange for convertible notes. The relative financing agreements provide for conversion of the notes into common stock at discounts of as much as 50 percent to market price. As the funder converts and sells time after time, stock price is driven down, and so more and more shares must be issued to meet the terms of the agreement. That is why these arrangements are called “death spiral funding.”

As dilution takes the shares outstanding to dizzying heights, many of Asher’s clients find it convenient to effect large reverse splits so they can “start over.” As of April 13, 2014, ECOS had 6.9 billion shares outstanding; the number is likely higher now. A 1:2,000 reverse split would have brought that under control, but it would also have destroyed the investments of current holders of common stock.

Thanks to FINRA, that split is no longer an option. That’s bad news for the company, but perhaps worse news for Asher Enterprises and Curt Kramer. It will be interesting to watch the next moves in this chess game and whether FINRA will blackball other bad apples in the future.



https://www.securitieslawyer101.com/2014/finra-blacklists-curt-kramer-mazuma-asher-enterprises/