Quantum Materials Corp. (fka QTMM)

[DJPele]

I think this is an excellent summary.

Losing a couple hundred thousand dollars vs have to pay nefarious "penalties" L2 were claiming, on top of the amount of shares they wanted is a win.

What I find interesting is that the court appears to have determined that L2 condition's on its contract with Quantum were "designed to put an end to Quantum with very little if anything at all actually lost by the Plaintiffs."

The Court has considered the testimony of Kenneth Lehrer. Although his opinion on the ultimate questions of fact and law upon which the Court must decide is ignored, the information he provided as an expert in his field helps the Court as finder of facts to understand the situation under which these transactions and events transpired. The Plaintiff’s motion to exclude therefore is denied. To the extent the testimony has persuasive weight it is considered. To the extent that it is not persuasive or credible, it is ignored.

Dr. Lehrer referred to something in the nature of predatory practices with penalty or liquidated damage provisions that are designed to cause a death spiral, increasing the debt of a company or, as in this case making it impossible to repay the debt by raising additional funds through equity investments to the point where it can no longer function. Examining this set of transactions and the Plaintiffs’ prayers for judgment, the Court cannot escape the notion that these are designed to put an end to Quantum with very little if anything at all actually lost by the Plaintiffs.

This, coupled with the fact that L2 would not allow QMC to pursue other lenders put QMC in a precarious position. Granted, this is at the fault of QMC for agreeing with the deal, but I cannot fully blame Squires for doing all he can to keep the company afloat.

Reading the entire court doc puts things in a better perspective. QMC came out on the better end here.