Auto Parts 4Less Group Inc (FLES)

[DKEZ]

Been doing DD, here's my current breakdown:

FLES management used a merger and reverse split as cover to strike a deal with a lender to modify extremely one-sided, lender friendly, conversion terms and then delay financials to allow the note to convert early.

Conversion price went from:

(3) 50% of the lowest trading price for the twenty trading days prior to conversion day.

to

(6) 50% of the lowest trading price for the fifteen trading days prior to conversion day, but not higher than $0.005.

$.005 on a stock trading for over $1 sounds wrong right? Why didn't anyone call it out? The update of the conversion price wasn't listed until the 10k....which was 3 months late, released 8/21.

This delay of the 10K also forced the note to become default early, and allow the lender to convert notes at a price of $0.005 while the stock traded from $0.70 down to $0.01 between 5/16-7/31(start of default from 10k delay until the last day covered in Q2). After that point, during Q3, they continued converting shares at their normal 50% of lowest traded price.

In the span from 4/30 to 7/31, this note converted almost 64% of the shares converted for the quarter totaling out to over 10M shares selling them at an $0.11 moving average for the quarter, essentially converting shares for AT LEAST a $1M profit, all while the 10K was still being delayed and shareholders were held in the dark about the new conversion terms that in no way should have been approved. (Unless the company made a deal on the side with the lender?)

The company allowed the lender to take massive profits from shareholders for 3 months before we even had the edited “death sentence” $0.005 conversion terms disclosed.

In Q3 this note was the only note to convert...at all. They converted almost 250M(~$250k) shares for a 2x profit and finished off the complete flushing away of shareholders. The price was dragged down to 0.001 at the end of Q3 on 10/31 and anyone who invested in the company for over a month was down 99.999% of their investment.

Dozens of shareholders with $10k-100k gone because of the deception committed by the managers of the company, Tim Armes and Chris Davenport, and their possible connection to one of their lenders to funnel money through the means of convertible notes with atrocious terms.

There's still over $500k owed on this note, millions of dollars earned for under $400k principal paid off. Seems normal lol



Basically:

1. The company modified the conversion price on their biggest convertible note(as high as $886k shown on Q1) to allow the note to convert at a price of no higher than $0.005 while the stock was trading over $1. It has a maturity date of April 2020.

2. The 10K that this change is reflected in was delayed and released 3 months late on August 21 when it was due in May. No one knew about this insane discount on a stock trading for over $1.

3. The 10K was delayed in a way that consistently misled investors and baited them into sticking around for “one more week” over and over for over 3 months.

4. The 10K’s late release led to the early conversion of notes now considered default, including the note in question. They had 3 months of uninterrupted disgustingly low conversions while investors were held in the dark.

5. In the time span covered in Q2(4/30-7/31) the company converted for 10M shares which were sold for at least $1M profit and in Q3(7/31-10/31) they converted almost $250k for 250M shares which completely finished the job of fleecing shareholders, all down 99% at this point.

6. The share price dropped from $1 to $0.001 over the course of 6 months and it’s almost entirely because of this convertible note and management's deception.


Anyone have some input?