Quantum Materials Corp. (fka QTMM)

[Jamis1]

My understanding is that lenders in the OTC land do gamble. They are in it for a short investment and gain. If they see an opportunity to get a bigger gain, they go for it.

I think given Steve's comments and what I gleaned from the 10Q about due dates, they must have gambled that Steve would default since their cash reserves were nearly depleted and that QMC hasn't announced additional funding agreements. Unfortunately, it looks as though their gamble was a bust as QMC paid them on time.

They may stand to gain something if they keep the share price suppressed and QMC defaults on the last payment.

You can find the terms of their agreement on the SEC website. I just took a brief look. I'm not a lawyer, but it appears that SBI and L2 can not short sell the stock during the "Commitment Period." Maybe QMC suspects they were shorting the stock and took them to court to stop it as a violation of the agreement? I don't know what the reason, but apparently per Steve, he believes one of their lenders is doing something proprietorial.

There may be other provisions in the agreement that may indicate a violation of the contract which would give QMC leverage to file and injunction, etc., or claim the investor was doing something illegal.

Section 5.2 SHORT SALES AND CONFIDENTIALITY. Neither the Investor, nor any affiliate of the Investor acting on its behalf or pursuant to any understanding with it, will execute any Short Sales during the period from the date hereof to the end of the Commitment Period. For the purposes hereof, and in accordance with Regulation SHO, the sale after delivery of a Put Notice of such number of shares of Common Stock reasonably expected to be purchased under a Put Notice shall not be deemed a Short Sale. The Investor shall, until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company in accordance with the terms of this Agreement, maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents.

“Commitment Period” shall mean the period commencing on the Execution Date, and ending on the earlier of (i) the date on which the Investor shall have purchased Put Shares pursuant to this Agreement equal to the Maximum Commitment Amount, (ii) March 29, 2020, or (iii) written notice of termination by the Company to the Investor (which shall not occur at any time that the Investor holds any of the Put Shares).

https://www.sec.gov/Archives/edgar/data/1403570/000149315217003482/ex10-1.htm