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LFBG - toxic financing agreement.

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nodummy   Saturday, 10/08/11 04:50:22 PM
Re: Sharktnk post# 16237
Post # of 177198 
LFBG - toxic financing agreement.

Here is a link to the toxic financing agreement with Southridge Partners II, LLP

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8183001

As you pointed out I made a post about Southridge Partners II, LLP/Stephen Hicks when they signed an identical toxic financing agreement with ECDC.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=65028174

Southridge Partners can be linked to Steven Hicks and has been found in lots of alarming links:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aaMJTN2IBE98

http://www.zamansky.com/cases/zamansky-warns-investors-about-pipe-fund-fraud.html

http://alchemy.secondmarket.com/bigpicture/sec-enforcers-eye-valuation-of-illiquid-assets/

http://www.stamfordadvocate.com/business/article/State-SEC-sue-Hicks-722996.php

http://online.wsj.com/article/SB10001424052702303467004575574422092467294.html

http://www.finalternatives.com/node/14299



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The 8K filing for the toxic financing agreement between Southridge Partners II, LLP comes just one day after an S-8 filing approving yet another stock incentive plan for company officers to be paid in stock. 500,000,000 shares to be exact.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8180750



A $10,000,000 financing agreement would require an S-1 filing and approval from the SEC. I doubt that will even happen. ECDC has yet to file an S-1 and LFBG probably won't bother filing one either. S-1 filings are expensive and can take months to get approved (if ever).

It is possible the whole agreement was just signed to create some hype for the stock as they try to max out the 10,000,000,000 billion authorized common shares before the inevitable, already announced and approved 1:500 Reverse split. I never could understand why investors consider these toxic debt arrangements as good for their investment. They only lead to dilution which hurts the share price. The money raised from these financing agreements is usually only used to pay company insiders and cover past due expenses - not to build future operations.


------------------


The 8K filing does give us some important information.

First it tells us a recent share count for LFBG and points out the huge amounts of newly printed shares that have been issued lately.

As of the date hereof, the authorized capital stock of the Company consists of ten billion (10,000,000,000) shares of Common Stock, $0.001 par value per share, of which 9,279,729,778 shares were issued and outstanding as of October 4, 2011.

9,279,729,778 outstanding common shares as of October 4, 2011

According to the DEF14C statement there were

8,379,641,409 outstanding common shares as of September 23, 2011

Which was probably just copy and pasted from the 10Q for the period ending June 30, 2011 which said

8,379,641,409 outstanding common shares as of August 22, 2011
7,795,992,203 outstanding common shares as of June 30, 2011
5,366,945,531 outstanding common shares as of March 31, 2011

So in the last 6 months LFBG diluted over 3.9 billion shares
In the last 3 months LFBG diluted almost 2.5 billion shares
In the last 6 weeks LFBG diluted over 900,000,000 shares

That's some pretty disgusting dilution yet people still buy the stock ignoring all the discounted shares that are being issued to insiders through dirty debt Note arrangements and arms length consulting agreements.


The other thing the 8K tells us is that Southridge Partners II, LLP will receive 83,333,333 shares of a new series of preferred shares valued at $25,000 just for signing the agreement. Doesn't matter if the toxic financing agreement ever gets approved by the SEC or if LFBG even attempts to get it approved by filing an S-1.

(b) PREFERRED STOCK. As a condition for the execution of this Agreement by the Investor, on the Effective Date or as promptly as possible after such date, the Company shall issue to Investor 83,333,333 shares of a new series of non-voting preferred stock with a stated value equal to $25,000.00, that are convertible into shares of the Company’s common stock at any time at the option of the Investor, at a conversion price equal to $0.0003 per share.

Section 10.7

FEES AND EXPENSES. The Company agrees to pay its own expenses in connection with the preparation of this Agreement and performance of its obligations hereunder, and in accordance with Section 2.1(b) above, shall issue to the Investor 83,333,333 shares of a new series of non-voting preferred stock, with a stated value equal to $25,000, to cover its expenses in connection with the preparation of this Agreement and performance of Investor’s obligations hereunder.



Those 83,333,333 preferred shares convert into common stock at a price equal to $.0003/share. We'd have to see the actual conversion terms. Do they convert into $25,000 of common stock regardless of the stock price (meaning the higher the stock price the less common shares they can become and the lower the stock price the more common shares they become) or do they convert into common shares at a price of $.0003/share regardless of the price of the commons (which is bad because of the upcoming 1:500 reverse split).


------------------------------


I'd be curious how many of those companies you listed actually ended up doing an S-1 filings and got approval to execute the toxic financing agreement.

http://www.southridgellc.com/fund_mgt_news.html


ECDC

They signed an agreement with Southridge Partners on July 1, 2011

http://www.sec.gov/Archives/edgar/data/1256540/000101968711002218/ecdc_8k.htm

The S-1 for the financing was filed on August 22, 1011 and is still waiting for approval.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8111272


NPWZ

They signed their agreement with Southridge on June 8, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7993616

An S-1 was filed on August 19, 2011 and is still waiting for SEC approval.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8110156


MWWC

They signed an agreement with Southridge Partners on July 21, 2010, but no S-1 has been done to date.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7392199

Previously to signing an agreement with Southridge Partners, MWWC signed an agreement with Crisnic Fund S.A. (Anthony Gentile) on February 17, 2010 which got terminated on July 21, 2010 and an agreement with Big Apple Consulting on February 17, 2010 which got terminated on June 29, 2010.

MWWC ended up having some legal issues with another toxic financier, Socius CG II, Ltd (Terren Peizer) a case which MWWC lost in February of 2011.


IMDS

They filed their first S-1 for financing from Southridge on January 12, 2010 - it got approved on February 26, 2010.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=6983784

They filed their second S-1 for financing from Southridge on December 21, 2010 - it took several tries, but finally got approved on June 9, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=76203304

The immediately filed a second S-1 for yet even more toxic financing from Southridge on July 12, 2011 which is still waiting for approval

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8038247


MBHS

They filed an agreement with Southridge on August 30, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8136641

No S-1 has been filed yet.


PSWS

They did an SB-2 filing for financing from Southridge way back in 2006 which got approved

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=4753660


UFFC

They recently filed another S-1 on August 24, 2011 for financing from Southridge which is till waiting for approval

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8114959

They had a previous S-1 approved on June 22, 2011


EFIR

They attempted a toxic financing arrangement with Kodiak Capital in 2009, but couldn't get SEC approval and withdrew their S-1 filing

They entered into a toxic financing agreement with Southridge Partners on August 30, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8138082

No S-1 has been filed yet.


BRZG

They entered into a toxic financing agreement with Southridge Partners on July 7, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8042372

No S-1 has been filed yet


ECPN

They entered into a toxic financing agreement with Southridge Partners on July 11, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8037897

No S-1 has been filed yet.


DCBR (nka HRDN)

They entered into a toxic financing agreement with Southridge Partners on July 8, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8039003

No S-1 has been filed yet.


ASFX

They did an S-1 filing to get approval for their toxic financing agreement with Southridge Partners on February 14, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7725151

The S-1 did not get approved and was withdrawn on May 5, 2011


TSNI

They did a toxic financing agreement with Southridge Partners on January 18, 2011

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7660968

No S-1 was ever filed. TSNI had problems with a previous S-1 filing for a different financing arrangement which they tried for over a year to get approved before giving up and withdrawing the request.






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