The Dog House

[SJOGRINGO]

""- Debt Notes being issued to friends and relatives of company insiders (like the CEO) with extremely favorable terms for the Note holder then kickbacks being arranged so that the insider gets a share of the profits made through the conversion of the Note into free trading common shares and the sale of those shares. ""

nodummy Share Sunday, October 30, 2011 12:07:26 PM
Re: chiefwiggim24 post# 10979 Post # of 11010

How the debt Note and history of the shell ultimate affects the future value of the NHSH stock will depend on a great number of things.


#1) How many of the already converted free trading shares remain in the hands of Tom Favata, Bill Harvey, and Chris Parkin and when will Tom, Bill, or Chris decide to sell the shares they still own?

I have a feeling that a very large number (possibly most) of the converted shares were never sold into the market. Obviously the selling of these shares into the market will have a negative affect on the NHSH share price.


#2) Who will ultimately end up with control of the Note? I've seen documents that show that all or part of the Note belongs to Mineseeker, Centacom, and Joe Canouse. The Note still has $125,950 in principal not yet converted. That $125,950 can be converted into shares at $.001/share, so the potential is there for the Note to create an additional 125,960,000 free tradings shares.

I don't know what Mineseeker would do with the Note if their ownership is ultimately proven legal and binding, but I have a feeling that if the Note ends up legally belonging to one of the other parties vying for control of the Note that it would almost definitely end up being converted into more free trading shares diluting down the share price.

I think this matter could end up having to be settled in court. While the ownership of the Note is being disputed new conversions being executed on the Note may not be possible. That helps restrict any future dilution which is good news the current share price.


#3) What other debt Notes now exist? What about the $140,000 liability that Jeff DeGenova put on the NHSH shareholders for his purchase of the NHSH shell on December 17, 2010? What about the $284,646.58 in interest that the David Houston debt Note accrued before it was passed to Cactus Capital LLC?

There are still some unanswered questions about the financial state (balance sheet) of the NHSH shell. I personally do not like how NHSH has skipped the last three quarterly reports.


#4) Assuming that the Mineseeker merger does end up being completed, what value will the new company bring to the NHSH shell? Mineseeker is a long standing well established business entity, but in a lot of ways they are a big mystery. We don't know if they will be using the NHSH shell to raise capital or if they will be coming in with revenue producing operations already in full swing. It will probably be some combination of both.

I tried to evaluate the Mineseeker operations once and this is as far as I got:

http://www.investorshub.advfn.com/boards/read_msg.aspx?message_id=67653910


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The share price has done well lately. Obviously previously converted shares have been held (not sold) and the conversion of new shares and all other forms of dilution has been held in check. It is anybody's guess how long this trend will last.


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To answer your last question, I don't trade. I just research. So no I won't be buying any NHSH shares.

To answer your other question, yes. Debt Notes are a major part of most publicly trading shells. These lower exchanges are usually littered with the most toxic, damaging types of debt Notes. They have the worst terms and usually do lots of harm to the value of the stock.

A lot of time debt Notes are illegally used to enrich insiders. You see it all in penny stocks:

- Fake Debt Notes being created

- Debt Notes being created for no other intention but future enrichment for the Note holder.

- Debt Notes being illegally converted into free trading shares using bogus opinion letters by crooked attorneys to remove the legend from the shares when in reality the owner of the Note didn't legally qualify to have the shares be unrestricted.

- Debt Notes being issued to friends and relatives of company insiders (like the CEO) with extremely favorable terms for the Note holder then kickbacks being arranged so that the insider gets a share of the profits made through the conversion of the Note into free trading common shares and the sale of those shares.

I could find you examples of each where litigation was brought against companies and individuals by the SEC. The problem is that the SEC doesn't have the resources or the man power to catch all the fraud so most of the illegal activities being executed by publicly trading companies on these lower exchanges never leads to anybody getting in any trouble - only shareholder suffering.

Most existing shells come with debt Notes from past expenses owed or money borrowed. The more debt and legal issues that a shell comes with the dirtier the shell is considered. The dirtier a shell is the harder it is to clean up the shell for future use.

I did a little post about toxic debt financing recently:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68247638




Anyways, I usually continue to follow companies once they have gained my interest, so if any new developments happen with NHSH I'll be watching and if I learn anything new I'll be sure to share.