SunWorks Inc (SUNWQ)

[SandridgeEnergy]

It's not their salary, it's all the free shares they have gotten and sold over the years and, for Nelson's friends, the p-notes.

And making millions of dollars to run a tech scam that produced no value is getting rich when you compare it to the value generated.

But Nelson did something different from the typical tech scam. They usually work exactly as this one did:

-

Have some random idea (the cell) -> spend all your time and effort getting people to invest instead of developing the technology -> keep dragging out development while making grand promises as long as possible -> pay yourself as much as you can get away with in shares and cash -> take off when you can

The difference with this one is that Nelson is a smart guy when it comes to creating financial instruments and marketing. He knew it would look bad to simply pay himself a huge salary. The way this was set up was to create vehicles that would allow the creation for nearly unlimited free shares and have these vehicles held by close associates of his.

One inescapable fact of this company is that the financing costs were massive. To put it simply the vast majority of the expenses went to financing.

I found one example where the company spend over $1M (raised from shareholders) in order to borrow roughly $100,000 for less than one year.

Most people should know that we are living in an era of historically very low interest rates, and yet Nelson was using instruments that cost shareholders well over 1000% (not an exaggeration) effectively in interest. That's how most of the money was transferred from shareholders to insiders and is the crux of the whole scam. He will say that it was impossible to seek other financing or they were very desperate, but that is a lie.

The simple logic that refutes that is this: The market was willing to buy millions of shares at prices 1000% higher or more than what the company was offering to these close associates via p-notes. And since the the market was willing to buy shares at these prices, the company (as normal not scam companies often do) could have sold shares directly to the market to raise funds.

Anybody who attempts to convince you that it is beneficial or acceptable for the company to continuously offer shares to related third parties at roughly a 90% discount to the market price (and this was done many times) is either an idiot, or more likely attempted to deceive you. Keep in mind they were touting the fake solar cell this entire time, telling people that it was done and almost ready to go to market for years. I suppose that is still their official position, as anything else would be tantamount to admission of fraud.

The other scams that run out of Santa Barbara (created by the same group of people) such as BSRC, HYSR and CABN all operate exactly the same way. The continually create debt that converts at a massive discount to the market price of the stock, and then do whatever they can to create volume.

It is volume and not share price they are after, if you look at penny stock promoters the key metric they use to advertise themselves to companies (usually scammy microcaps) is not what share price they can achieve but how many dollars worth of volume they can generate. When one party has effectively infinite shares that cost them next to nothing to acquire, the only thing that matters is how much volume can be generated (how many people click buy in their brokerage accounts), the share price doesn't matter that much.

The other thing they did differently was to use the hype around the cell and a potential acquisition to take the scam to the next level. The p-notes used to finance SunWorks, which were created by raising funds from selling these nearly free shares after investors thought the company had already been purchased netted the holders massive returns and they remain unfinished in selling these shares.

The biggest thing that keeps the company safe is that this whole scheme is really complicated. It takes hours and hours of research to understand it, and you have to be willing to put the time in yourself into understanding how it works. It's best if people do their own research since when I try to explain it most people aren't even willing to listen because they think I am trying to trick them into selling for various reasons.