Bots Inc (BTZI)

[lesgetrich]

That's an old debunked article. It was published February 2, 2017 and rebutted by me and others. Here was my response posted February 6, 2017 on IHub...

mCig Post 82715 - shares were used to pay mCig expenses and not required to be reported

Make sure you read the comments after this negative article!


Les Mezei, Contributor
Comments (211) |+ Follow |Send Message

Sorry Alan, but you're way off base again. Had you read the mCig 2016 10-K thoroughly, you would have seen the following statement...

mCig Post #79773

"Recent Sales of Unregistered Securities

In the year ended April 30, 2016, we issued an aggregate of 25,552,599 shares of common stock valued at approximately $927,493 for professional services. In addition, the Company issued 2,500,000 common shares for investments in the amount of $67,500 as final payment for Vapolution, Inc.

The issuance of such shares of our common stock was effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act of 1933, as mended (the “Securities Act”) and in Section 4(2) of the Securities Act, based on the following: the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act."

...and...

"All of the outstanding shares of common stock held by the present officers, directors, and affiliate stockholders are "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Securities Act of 1933 and as required under applicable state securities laws. Rule 144 provides in essence that a person who is an affiliate or officer or director who has held restricted securities for six months may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1.0% of a Company's issued and outstanding common stock."

All of those "missing" preferred and common shares were unregistered and sold by Paul from his personal shares during 2015 in private placements to cover mCig expenses for consultants and salaries. They were exempt from required reporting on a Form 4 as they were unregistered and sold to qualified investors. New auditors in 2016 advised him to stop this practice of paying company expenses from his personal shares and all preferred transactions have since flowed through the company's financials.

Paul Rosenberg complied with the lockup provision through the required period until 4/30/2015. He also complied with the spirit of his claim that he had no plan to, and did not intend to, convert his preferred shares after April 30,2016. While a million shares were converted to cover mCig expenses since 4/30/2015, Paul has also returned 5 million of his personal preferred shares (representing 50 million common shares) to the treasury, thus more than offsetting all or the company's dilution since it's current inception in 2013. This can hardly be construed as the act of someone looking for a quick profit at the expense of shareholders.

...and from the comment section following the Brochstein article...

MCIG CEO Disposed Of Shares And Failed To File Form 4 by Alan Brochstein

Knicks
Comments54 | + Follow
"I didn't claim it was illegal"
Well that is the first impression I have after reading the article. Probably many other regular individual investors too. As you mentioned earlier you need to be an attorney to understanding it.
So my point is that this article is premature not only because yourself haven't figure out the whole truth but also the potential misleading effects.
Just imagine the reaction Monday morning when people think MCIG CEO did something illegally.
Do you agree that even you didn't claim it is illegal but many people (who are not attorney ) may think so?
05 Feb 2017, 09:12 PMReply0Like

Alan Brochstein, CFA
Comments9473 | Following
Author’s reply » Still researching the legal obligations of a CEO and 10% owner like Paul Rosenberg to file Form 4s, but it smells. Converting 2.1mm preferred shares into 21mm shares and subsequently selling 27mm shares without proper disclosure is at best bad news but maybe a violation of securities laws. So what if he gave back 5mm preferred! Selling 27mm shares at $0.10 would yield a cool $2.7mm. Not bad for a company that has done nothing since its inception. One has to love the optics of "investing" $100K and then shouting about it. This is likely to help his stock promoter, whom he gave 4mm shares, liquidate the rest of his shares (2mm remaining).
04 Feb 2017, 02:46 PMReply0Like

Les Mezei
Comments242 | Following
LOL, There was only one day, May 7 2015, during the period in question. 4/30/15 thru 4/30/16, when the pps was at or greater than $.10/share. The chances of Paul selling shares on that single day, the height of the fiscal year, are astronomically small. There's a much better chance that he sold them in a private placement at a discount when it was trading at or near the fiscal year low of $.0181 on December 10, 2015 since thru most of those 12 months trading averaged well below $.04/share. We're probably looking well under $1 million which was used for expenses during a period when mCig had minimal revenue while the company was revising its business plan
05 Feb 2017, 01:03 AM