especially when viewed in the light of RCCH's last known financial statements.
2. There is another way the company can issue free trading shares. It is called a debt wrap. If the company has a loan or obligation outstanding for more than one year, it is considered "aged debt". Generally, an investor seeking discounted free trading shares, in conjunction with the Company's management, will buy the debt at par. Then negotiate a conversion of the debt into discounted shares. As the debt has been outstanding for more than one year, the shares received as repayment are free trading.
Let's follow the paper trail and see where it leads us.
First, note that all documents I'll reference can be found in full here:
The last full-year financial statement was '06 in which the company reported a liability (i.e. debt) to Newton himself for $264,230; ostensibly for a loan which he made to the company. Here are the relevant extracts from the statement:
Now, in the subsequent quarter, Q1 '07, the next statement filed reflects a liability to Newton which has ballooned to $883,317:
The accompanying note in the Q1 '07 statement as to who and why the liability exists is identical to the note referenced above in the '06 statement. Further, the last 2 statements on file -- Q2 '07 & Q3 '07 -- reflect the exact same liability and the exact same note. The last statement on record ends Sept 30, 2007.
According the the SEC complaint against Gendarme, it is alleged that Gendarme acquired RCCH shares from the issuer. From September 2008 to June 2009, Gendarme sold more than 2.1 billion of these RCCH shares for more than $210,000. So, according to the SEC, RCCH's engagement with Gendarme began 1 year from their last statement which listed $883,317 in company liabilities -- i.e. debt to Newton.
I find it interesting that during the course of that one year time period -- and extending well into '09 -- a promotional campaign by the company was underway, such as features in "Eye on America" (later to be discovered as nothing more than a company paid-for infomercial,) issuing PRs containing rosy (if not astronomical) revenue projections, as well as a pending "International Uplisting" of exchanges, not to mention Newton communicating to shareholders the purported real value of the stock to be either $1.50 or $3.50.
So, in light of your commentary, Anvil, is it possible that Newton was selling shares to Gendarme to settle the company's loan obligations -- namely to himself? Could Newton's personal tax records verify bona fide financial transactions which would corroborate that real dollars were loaned to the company by Newton himself? Could his tax records verify the source of those funds?
These are questions which definitely pique my interest. I hope they pique the interest of Mr. Mitchell and Mr. Pendrey, so that these interesting coincidences can be reconciled in the SEC's investigation of Gendarme.
AI
