Ngen Technologies Holdings Corp. (fka NGRP)

[Carini]

No I am correct. I think you're just misunderstanding my point, which was actually in further support of the original point you were making. Also, I don't need to "contact the SEC directly" because they are an administrative agency and the laws they enforce are codified in public statutes (as interpreted by administrative decisions and applicable case law). Let me explain...

You said:

Where is the mandatory 8k of the $5M financing that was EXECUTED! That tweet is going to be his downfall as there was no safe harbor statement in that!

What I think you were saying in the first part there is that, under SEC rules, LIBE should have filed an 8k within the required time period (3 days? 5 days? Not going to bother checking at the moment because it's definitely well past the deadline...) if they in fact executed a $5MM financing deal, as that would certainly be a "material event" as defined by the disclosure regulations, and require an SEC-reporting company like LIBE to file an 8k to announce it. I don't disagree.

If LIBE closed on $5MM in financing, Brian should have filed an 8k, but he did not.

Instead, he raised the A/S by a few billion shares. Go figure...

With that in mind, in the second part of your statement, as I understand it, you were suggesting that Brian's tweet announcing the execution of a $5M financing deal would "be his downfall" because it was an official statement from the company announcing a material event that was not followed up with the required 8k, thus suggesting either that the deal didn't happen as tweeted (i.e., that the tweet was a false or misleading statement in violation of SEC Rule 10b-5), or that, if it did happen, then LIBE violated SEC disclosure requirements by not following that tweet up with an 8k. I also don't disagree.

My clarification was directed only at the last part of what you said (i.e., "...as there was no safe harbor statement in that!") What I think you were implying there is that Brian may be particularly culpable because the tweet announcing the $5MM equity line does not include a forward-looking statement disclaimer, sometimes referred to as a "safe harbor statement." You know, like the one in LIBE's Peppermint Jim PR:

Safe Harbor for Forward-Looking Statements

This press release may contain forward-looking information. There are many factors that could cause the Company's expectations and beliefs about its operations, its services and service offerings, or its results to fail to materialize. All forward-looking statements in this press release are based on information available to us as of the date hereof and we assume no obligation to update these forward-looking statements.

What I took issue with was the further suggestion implied by your statement that, if the tweet in question had included such a disclaimer (Twitter's 280-character limit notwithstanding), then that might somehow have protected Brian against legal liability. That is incorrect.

In other words, all I am saying is that, even if Brian's tweet announcing the execution of a $5M equity deal had included a "safe harbor statement" like the one above, such a statement would not protect him from legal liability if there was in fact no such deal at that time.

Some context...

The "safe harbor" you are referring to was created when Congress passed the Private Securities Litigation Reform Act of 1995 (the “Reform Act”), codified at 15 U.S.C.A. Sections 77z-2 and 78u-5. It was intended to encourage public companies to make “forward-looking statements” in their disclosures to investors (i.e., to inform investors not only about existing deals, revenues, liabilities, etc., but also about future plans and expectations, acquisitions in the works, deals being negotiated, etc.). The idea was that public companies should not be afraid to tell investors about their planned growth and development out of fear that some of those currently-pending deals might not actually close, or that some of those "projected" revenues might not materialize due to a change in circumstances. The fear, of course, is that if the "intentions" and "expectations" announced by the company do not pan out, the company would be exposed to significant legal risk if it was sued by investors who bought stock on the basis of those failed intentions and expectations.

To alleviate that concern, the Reform Act created the safe harbor provision to protect companies from securities law liability in connection with forward-looking statements, so long as they disclosed at the time of making those statements that they were indeed forward-looking and might never pan out. So, if Elon Musk puts out a PR saying that he "intends" to develop a spacecraft to mine some exotic crystal off of Pluto, and that he "expects" the effort to result in $5B in revenues next year, then Tesla is protected from liability if it gets sued by investors who bought a bunch of stock on the basis of that PR, and then lost a ton of money when the mission failed and Tesla had to book a $500MM loss instead. Put simply, the safe harbor provision says that you can't sue a company for making public statements that later turn out to be false, so long as the company also told you that everything it was saying was forward-looking, and that "actual results may vary." Caveat emptor, so to speak.

That all works out great for real companies like Tesla, IBM, Google, etc., which are highly liquid and trade hundreds of millions of dollars in volume each day, and where big money does serious research before investing, and even retail investors can generally be presumed to be reasonably well-informed about the risk/reward of buying stock on the basis of the company's projections and intentions. It all falls apart, however, in the largely-illiquid OTC, where hundreds of scam companies run by conmen routinely put out tweets, Facebook updates and PRs announcing pie-in-the-sky projections and "huge deals!" coming soon, and then previously-untradeable stocks suddenly experience one- or three-day runs of 50-500% on that news before hundreds of millions of shares are dumped by unknown entities, and their proceeds quickly dissipate into mostly-untraceable webs of offshore banks and affiliate accounts, all while the retail investors (because, let's be honest, only retail is buying in the OTC) who bought on that news lose most if not all of what they "invested." In other words, a "safe harbor" law that makes public policy sense on the big boards becomes a public nuisance and a recipe for fraud and abuse in penny land.

But lo and behold, Congress recognized this too, which was the point of my responses to your post. Specifically, the Reform Act provision creating the safe harbor for forward-looking statements expressly excludes penny stocks (defined elsewhere as stocks trading under .05 per share) from the safe harbor protections. As I previously posted, 15 U.S.C. section 77-z-2 (i.e., the Reform Act statute laying out the safe harbor for forward-looking statements) provides:

(b) Exclusions

Except to the extent otherwise specifically provided by rule, regulation, or order of the Commission, this section shall not apply to a forward-looking statement—

(1) that is made with respect to the business or operations of the issuer, if the issuer—
...
(C) issues penny stock;

So, to wrap up, my point is that LIBE is a penny stock issuer, and therefore LIBE and/or Brian do not get any protection from legal liability merely because a "forward-looking" or "safe harbor" statement disclaimer might be cut-and-pasted into a public press release. Nor, in contrast to your suggestion that I originally responded to, do they face any additional risk by not including such a statement in a public tweet. The bottom line is, if Brian is making false or misleading statements anywhere (which includes statements that omit key details that might make the statements not misleading, such as details about imminent debt conversions that the company previously said it had the cash to pay off so were "not a problem"), whether on Twitter or in a PR, then it is legally irrelevant whether that statement is accompanied by a safe harbor disclaimer.

Personally, my lay opinion is that the past few years' worth of Brian's statements on Twitter, Facebook, in PRs and on this board -- when viewed in light of the company's actual progress, events that eventually unfolded and the share dumping that corresponded with all those statements -- make up a slam dunk case of grossly negligent corporate governance at a minimum, and more likely a plausible basis for all kinds of criminal charges and/or civil suits ranging from fraud to insider trading to breach of fiduciary duties and criminal stock manipulation and more...

The guy IMO has been living like he's got nothing to lose. And maybe he's right, since the SEC doesn't seem to have the time or resources to effectively police this OTC swamp, and the cost/benefit ratio of a shareholder action against one of these companies (not to mention all the trouble involved in wrangling up a big enough class of investors) is likely enough to ensure it is never pursued. Still, I'm not the one who has to sleep at night with all this weighing on my shoulders. And you know it is, no matter how hard he tries to cover it up with indignant tweets and board posts about how hard he is working to create shareholder value.

What a legacy, lol... Ok I'm done.

Glad that helps straighten that out. Whew!