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Monday, January 01, 2024 6:10:32 PM
Bottom line is that this represents what could be north of $700K worth of debt that needs to be passed on to retail traders along with the rest that is in the pipeline. These are old toxic notes that convert at a steep discount to market. In those days it was common to simply convert and dump but the SEC has been cracking down on this resulting is some observance of the rule 144 holding period. The problem that these guys will have is converting at a discount to market amid this runup and not knowing how far the price will now fall during any holding period. This stock is nasty with the dilution in the pipeline. Buyer beware!
AMENDMENT NO. 10 TO FORM S-1
As filed with the U.S. Securities and Exchange Commission on June 16 , 2023
https://www.otcmarkets.com/filing/html?id=16735041&guid=AtJ-kn0vFikPB3h
PRIVATE PLACEMENT OF CONVERTIBLE NOTES WITH REGISTRATION RIGHTS
The following convertible promissory notes and corresponding securities purchase agreements are those that contain registration rights and those which underlying shares are being registered for resale in this registration statement.
On November 20, 2020, BlackStar Enterprise Group, Inc. and Quick Capital, LLC. entered into a convertible promissory note totaling $33,275 and a securities purchase agreement. The note bears interest at 10%, with a default rate of 24%, and is convertible into shares of the Company’s common stock. The conversion price is to be calculated at 60% of the 2 lowest trading prices of the Company’s common stock for the previous 20 trading days prior to the date of conversion.
...The company filed a Form D with the Securities and Exchange Commission on November 27, 2020.
On January 28, 2021 BlackStar Enterprise Group, Inc. and SE Holdings, LLC entered into a convertible promissory note totaling $220,000 and a securities purchase agreement. The note bears interest at 10%, with a default rate of 24%, and is convertible, at any time after the date of issuance. The conversion price is to be calculated at 50% of the average of the three lowest trading price of the Company’s common stock for the previous twenty trading days prior to the date of conversion.
...The company filed a Form D with the Securities and Exchange Commission on February 4, 2021.
On April 29, 2021 BlackStar Enterprise Group, Inc. and Adar Alef, LLC entered into a convertible promissory note totaling $550,000 and a securities purchase agreement. The Company initially reserved out of its authorized Common Stock 86,105,000 shares of Common Stock for conversion pursuant to the note. The note bears interest at 10%, with a default rate of 24%, and is convertible at the option of the holder, at any time after the date of issuance. The conversion price is to be calculated at 50% of the average of the three lowest closing bid prices of the Company’s common stock for the previous 20 trading days prior to the date of conversion.
...The company filed a Form D with the Securities and Exchange Commission on June 1, 2021.
Bubae
Re: None
Wednesday, December 27, 2023 11:08:08 AM
Post# 8161 of 8501
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173509519&txt2find=lawsuit
NOTE 7 – CONVERTIBLE NOTES
In April 2022, Quick Capital LLC issued a notice of default on its $33,275 convertible note to the Company dated November 16, 2020 and stated that the outstanding amount due on the note is $133,317, the default interest per annum is 24%, and that the conversion price is the lowest trading price during the delinquency period with a 50% discount.
What Toxic Financing Is And How Public Companies Can Avoid It
PUBLISHED
MAR 16, 2023 10:31AM EDT
https://www.nasdaq.com/articles/what-toxic-financing-is-and-how-public-companies-can-avoid-it
Additionally, convertible note issuers with a track record of driving toxic financing deals generally limit the holding period on their notes to six months for SEC-reporting companies. The Securities Act of 1933 requires all unregistered securities acquired directly from the issuer to be held for at least six months, which is why a six-month timeframe is often given as the holding period on toxic debt.
Press Release
Stock Issuers & SEC Taking the Fight to ‘Toxic’ Lenders
by Howard Mulligan August 15, 2023 in Financial Services
Agency bringing actions against convertible noteholders for failing to register as dealers
https://www.corporatecomplianceinsights.com/sec-toxic-lenders/#:~:text=Since%20early%202020%2C%20the%20SEC,required%20by%20the%20Securities%20and
In March 2022, a Florida district court dealt with a defendant that purchased convertible notes of over 100 microcap issuers, converted the notes into shares of stock at massive discounts and then dumped over 17.5 billion shares into the public market, generating over $21.5 million in profits.
In August 2022, the SEC initiated an action for failure to register and then entered into a settlement with a noteholder that, from 2016-2020, purchased approximately 250 convertible notes and profitability sold the converted shares. In the settlement, the defendants agreed to (1) pay disgorgement and prejudgment interest of $8,390,601.27, (2) the entry of a civil penalty of $810,307 and (3) a five-year suspension from acting as a penny-stock dealers.
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Everything that I post is just my informed opinion and is simply an invitation to debate. Trade on your own due diligence please..
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