Appreciate all of you bringing me up-to-speed, most of which we concur, especially the fraudulent activities of SPNG mgmt. Laughable, and sad for shareholders who were taken in. Red flags everywhere, so greed got the best of them, as does so often when "investing" in a penny stock. Only money made with penny stocks is trading without being greedy, insider fraud, and NSS. Only RARELY does a penny stock actually make it to the real world and is usually a small pharma, who stumbles onto something and bought out by Big Pharma.
However, you said:
"I assume you mean OBO + NOBO. You have made the implicit assumption that if the outstanding shares exceed the AS there is a naked short problem. This ignores the very real issue of the principals' penchant for fraud. I would not be the least surprised if they had exceeded the AS with their selling of shares. They had no problem doing just that until they knew the SEC was looking and tried to cover their tracks."
Knowing only about securities law, this doesn't register with me, unless you are implying short selling by SPNG mgmt and associates. This is entirely possible, especially due to SPNG mgmt fraudulent behavior across-the-board. No names were mentioned as to who shorted, only that if OBO + NOBO > A/S, there is NSS. Below is the explanation again, as there appears to continue to be confusion. Hope this helps you to better understand.
"Authorized Shares – These shares represent the total number of shares of stock authorized when the company was created. Only a vote by the shareholders can increase this number of shares.
However, just because a company authorized a certain number of shares doesn’t mean it must issue all of them to the public. Most companies retain shares for use later called unissued stock or shares.
• Unissued Shares – Shares a company retains in its treasury and not issued to the public or to employees are unissued shares.
• Restricted Shares – Restricted shares refer to company stock used for employee incentive and compensation plans. Restricted stockowners need permission of the SEC to sell.
There is a waiting period after a company first goes public where insiders’ restricted stock is frozen. When insiders want to sell their stock, they must file a form with the SEC declaring their intention. Even insiders of established companies must file with the SEC before selling their restricted stock.
• Float Shares – Float refers to the number of shares actually available for trade on the open market. You and I can buy these shares.
• Outstanding Shares – Outstanding shares includes all the shares issued by the company, which would be the restricted shares plus the float.
Here’s a simple example with numbers to illustrate the relationship of these different shares:
• Authorized Shares – 100
• Unissued Shares – 20
• Restricted Shares – 10
• Float – 70 (100 – 20 – 10 = 70)
• Outstanding Shares – 80 (10 + 70 = 80)"
After SPNG & Friends dumped all unrestricted into the market, only thing left to sell on their part would be shorting. Your confusion when saying a long sell can also land on REG SHO is a matter of semantics, and can be confusing. If an investor wants to sell shares of an equity, option, future, FOREX, etc, that (s)he owns, in their view it is a "long" sell. However, if broker, or MM handling equity for broker, does not have inventory, the original long sell of legitimate shares becomes a short sell until such time broker/MM covers. I understand the confusion.
You also said:
"The problem with your assertion is that it does not fit the facts of the case. SPNG had sold at least 1BB over the authorized number when they tried to cover their tracks. The link below is the first filing indicating a change in the bylaws to authorize 3 BB shares. At that point in time the SEC had begun their formal investigation."
We also agree here. This is why my statement was qualified in earlier post stating, "it seems we all agree that (after all the SPNG sleight-of-hand) there are 3B shares currently authorized." At least that is what I surmise after reading the postings here and in court transcripts. That being the case, the formula above works. Point being that restricted is part of A/S, and any shares in market above A/S can ONLY be NSS.
If A/S = or < OBO + NOBO, this is all a moot point. If not, somebody(or bodys) is/are on the hook, especially if judge continues to have a sympathetic ear toward shareholders.
Apologize for length of post and thank you all again for bringing me up-to-speed on this case.
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