SUTIMCo International Inc (SUTI)

[Soapboxmom]

Eddie Vakser brayed on Facebook:

SUTI Inc
11h ·
Today. Wyoming SOS (secretary of state), posted Auri Inc updated reduced share count by 3 Billion shares, and as we baught back 620 million shares from OS, several weeks ago, we should see another major block on OTC Markets next week. These efforts, are designed to tighten the markets for all of our companies, and help the PPS, increasing the shareholders value. We are doing this to all 8 of our companies that are publicly traded, NEXT SUTI is being reduced NOW, so that the roll -up does NOT have all the overhang...etc.. And finally, most of you already noticed that we also acquired all the Convertible Notes as well!!! Have a great weekend!

What "Convertible Notes?"
https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-guides/glossary/convertible-debt

Convertible debt definition

With convertible debt, a business borrows money from a lender or investor where both parties enter the agreement with the intent (from the outset) to repay all (or part) of the loan by converting it into a certain number of its preferred or common shares at some point in the future. The agreement specifies the repayment and conversion terms which include the timeframe and the price per share for the conversion as well as the interest rate that will be paid until either conversion or maturity.

Convertible debt (also called convertible notes) is a form of financing that is often used by high-growth early-stage companies. It starts off as a loan (debt), but the lender and the company have options to convert the debt to equity under certain predetermined terms called “conversion privileges” as specified in the deal’s term sheet. Under such an agreement, the lender generally does not place a valuation on the borrowing company, meaning the current or future value of the company might not be taken into account when the loan is being made. However, in many circumstances, a valuation cap (ceiling) is included in the terms....

This type of financing is typically provided by a venture capital firm, angel investor or debt lender.

Lenders or would be investors like convertible debt because it can provide them with interest payments for the duration of the note, discounts typically ranging from 10% to 20% on the ultimate conversion value, and priority ranking over the preferred shares or common shares as outlined in the term sheet until they decide to convert the outstanding debt into equity....

https://www.equityeffect.com/blog/what-is-a-convertible-note/

A convertible note is a way for seed investors to invest in a startup that isn’t ready for valuation. They start as?short-term debt?and are converted into equity in the issuing company. Investors loan money to the startup and are repaid with equity in the company rather than principal and interest. The convertible note is automatically changed into equity once a specific milestone has been reached, usually when the company is officially valued for later investments....

Why Are Convertible Notes Used?

Startups that need pre-seed or seed funding use convertible notes to raise money before offering equity funding. Since founders can buy their shares when they’re incorporated at a price specified in the articles of incorporation, turning around a few months later and selling shares at a significant markup would look suspicious.?

Convertible notes are used to avoid this issue. There often isn’t enough data to form a valuation of the company in the early stages. Using the seed funding to get the company up and running provides a stronger foundation for valuation before the Series A funding round.?
Benefits of Convertible Notes

Convertible notes?allow startups to focus on growing their business before they have to start paying back debt. This is particularly important for tech companies that need to spend a lot of time fine-tuning their product. Convertible notes are a fast and straightforward way for startups to raise money. Issuing equity is a more complicated process, and convertible notes bypass that by using debt.?

The benefits to investors are clear. Startup companies with high-growth potential offer an outsized return on their investment when everything goes well. Particularly with convertible notes with a low valuation cap and a steep discount, investors can end up with a lot of equity obtained at bargain-basement prices.
Terms of Convertible Notes

Investors are usually interested in convertible notes because they believe the company will experience a lot of growth. Ultimately, they think the equity in the startup will be worth more than the interest on the debt. Convertible notes include the loan and repayment terms as well as the following:?
Interest Rate

Convertible notes are a loan, so there’s an interest rate. The difference is that convertible notes pay interest in equity rather than cash. The interest rate is the amount that will be added to the principal amount when the note is converted. Interest rates are usually low and in line with current rates as the value is primarily in the equity conversion.......

Disadvantages of Convertible Notes

While convertible notes offer many benefits, there can be significant drawbacks for both startups and investors. These include:
Failure to Secure Future Financing

There’s always the possibility that the company won’t be able to raise equity financing in future rounds. If the note matures and the company cannot get additional funding, it’s unlikely they’ll be able to repay the note. Defaulting on a convertible note can push a company into bankruptcy. However, if an investor forecloses on a company, they’re basically guaranteeing a total loss on their investment. This is a losing situation for both sides. Before investing in a convertible note, investors and startups need to have a clear idea of all paths forward, including failure.?
Giving Away Shares of Equity

For companies, the most significant disadvantage to convertible notes is giving away future equity that has the potential to be far more valuable than the original loan. This is particularly true with low valuation caps. Startups could be giving away a large percentage of their equity if they have significant, unexpected growth in the very early stages.
Complications from Poorly Planned Notes

Companies with too many notes or notes that aren’t set up carefully may be putting themselves at risk later. Convertible notes are usually structured as a single agreement called the note purchasing agreement. This covers all of the financing terms. Promissory notes are then issued to individual investors with the date and amount of their investment. However, if startups issue staggered convertible notes with different terms, future negotiations may be compromised by problems with the?cap table.?
Time-Consuming Process

Though convertible notes are far more straightforward than Series A funding, they can still be complicated and time-consuming to negotiate. They have to be drawn up by lawyers and passed back and forth between investors, founders, and their lawyers before the terms are finalized......

Convertible notes are high-risk investments, and investors are expecting a big reward.?

Companies that are acquired before their convertible notes’ maturity date or choose not to raise any equity funding risk disappointing their early investors even if they pay back the loan. Though this rarely occurs, it’s best to have language in the convertible note that deals with this possibility. Many convertible notes include a standard 2x payout term to cover this.?

In cases where the company isn’t on track to convert or repay the loan by the maturity date, there are a couple of options. Investors may be willing to extend the note, hoping that funding will be secured with more time. Investors may want to renegotiate the convertible note terms when this happens by asking for a more considerable discount or a lower cap.
What Companies Are Good Candidates for Convertible Notes?

Early-stage startups that are on track to grow quickly can benefit from seed funding in the form of convertible notes. However, it’s crucial to have a clear path toward valuation so that the conversion won’t be an issue when the company is ready for another round of funding......

In Conclusion

Convertible notes can be an excellent option for the right company and the right investor. The high-risk, high-reward model can offer a way for startups to obtain seed funding before they have the resources to get to Series A funding. However, having a clear plan for all eventualities is imperative for both sides to benefit from the arrangement.? ? ?

This is another con from Eddie Vakser. The stocks are down the toilet because the 8 companies are worthless garbage that exist only on paper. Reducing the number of shares of a company that exists only on paper is laughable. Vakscam puts out glowing press releases promising all kinds of products, services and operations and it is always nothing more than misrepresentations, outright lies and pure fantasy. And, we have seen the shady lawyers that Eddie Vakser engages. What investor would get involved in such a risky deal? These are not start-ups and history shows that Vakscams' deals do not come to fruition. When has he ever had a company that had real sustainable operations and income?