MYSTIK - PANANO WARNED INVESTORS
That the company could face regulator or shareholder action. You can read it in their SEC filing 10Q, for the period ending Sept. 30th, 2006.
An excerpt from it is posted below:
It has come to our attention that we may have inadvertently issued more shares of our common stock than we actually registered on Forms S-8 during 2004 and 2005, which issuances may have been in violation of one or more federal or state securities laws. We have offered rescission to consultants who we believe may have received shares in excess of the amount registered. We offered to pay upon tender of the shares, an amount equal to the value of the consideration given for the common stock subject to the rescission offer plus interest at the applicable statutory rate in the state in which the consultant resides from the date of issuance through the date the rescission offer expires less any income received by the consultant from the common stock; or if the shares of common stock subject to the rescission have been disposed of, the difference between 1) the amount that would be received upon tender of the shares of common stock and
2) the aggregate price received by the consultant upon disposition of the common stock plus the amount of any income received by the consultant from the common stock. While all of the consultants who were offered rescission rejected such rescission, we could still be found to be liable to the consultants pursuant to the terms of our rescission offer, at law or in equity.
Additionally, we may have issued shares of common stock to certain individuals and entities during 2005 and 2006, which shares were registered pursuant to Form S-8, which issuances may not have been eligible for registration on Form S-8, and which issuances may therefore be in violation of one or more federal or state securities laws. We have not offered any of these shareholders rescission and we may therefore be liable to such shareholders in an amount equal to i) the value of the consideration given for such shares plus interest at the applicable statutory rate in the state in which the shareholder resides from the date of issuance of the shares less any income received by the shareholders from the shares; or ii) if the shares have been disposed of, the difference between 1) the amount that such shareholder would receive pursuant to (i) above and 2) the aggregate price received by the shareholder upon disposition of the shares plus the amount of any income received by the shareholder from the shares. As of the filing of this report, we do not have any plans to offer rescission to the shareholders who may have received Form S-8 registered shares, which may have not been eligible for registration pursuant to Form S-8.
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OUR PREVIOUSLY FILED PRESS RELEASES DISCUSSED CERTAIN ANTICIPATED EVENTS WHICH FAILED TO OCCUR AND PROJECTED REVENUES FOR CERTAIN OF OUR PROJECTS WHICH MAY NOT COME TO FRUITION AND AS A RESULT, WE COULD FACE LIABILITY FROM SHAREHOLDERS OR REGULATORS IN CONNECTION WITH SUCH PRESS RELEASES.
Certain of our press releases issued within the past six months referred to the anticipated entry into distribution agreements for our MDSO, including our October 26, 2006 press release which stated that one of our partners would negotiate "eight additional" airing rights agreements, which may have misled investors into believing that we currently had one or many airing agreements in place, which we don't, as well as our October 23 and 24, 2006 press releases which stated that we believed we would close up to four airing contracts within thirty days (which now seems unlikely as we have not closed any airing agreements to date), and our October 9, 2006 press release which stated that we anticipated closing a network contract with an Asian television network on October 11, 2006, which contract has not closed to date. Additionally, certain of our press releases, including our October 30, 2006 press release which projected revenue of "over 12 million dollars" during the first season and over "thirty million dollars" over the next two years in connection with the broadcasting of the MDSO, which projections may not come to fruition, and which projections our management now believes were too aggressive as we do not currently have a distributor in place for the MDSO and there is no way to project with any accuracy the future revenues the broadcasting of such show might generate. If any investors purchased shares of our common stock based on our previous press releases, which may have led certain investors to believe that the closing of broadcast contracts on our MDSO was imminent and/or that we would generate substantial revenues from the MDSO, which we currently believe it is too early to tell, we could face liability for such purchases if those investors end up losing money on our common stock. Additionally, because certain of our press releases may have included aggressive projections, which may not have been clearly marked as estimates, we could face liability from market regulators in the future in connection with such press releases.
