SPO Networks Inc (SPOI)

[SwarmMaster]

When Humphries was ousted from the company and Chad took over in 2010 there were some public comments made that shed some light on the issue of the NIR notes. Since then I have lost a HDD with much of the older SSEV DD on it (I know, I know, backup damnit! 20/20 hindsight, I use a RAID1 now). So unfortunately I can only relay what I recall and do not have supporting links at is time. Once the lawyers got involved the company went silent and I have been unable to find references to the past statements.

So, take this with some salt; as I recall Humphries was basically caught with his handin the cookie jar forging signatures on documents to authorize share disbursements. He also had some controlling relationship with DLAD which was the company which originally entered into the $6 million convertible note with NIR. This last part is important, because as we see HLNT at no point actually received $6 million in cash from these notes, nor did they originally deal with NIR. Instead the notes were transferred from DLAD to SSEV by Humpries in exchange for exclusive rights to some kind of software, I think it was accounting software. As far as I can tell, and as I recall post-Humpries management has stated, the software was never actually received by SSEV. Also, there was some evidence that despite the deal being for 100% exclusive control of the software, it appeared DLAD later attempted to sell the same to another company after the note transfer. It is also unclear how it came to be that this SW was valued at precisely the same amount as the notes. It is my understanding in contract law that it is not legal to revalue an item arbitrarily to achieve a predetermined debt, But I am not an expert on contract law. Suffice to say it is extremely suspicious that DLAD had an asset purportedly worth exactly the same amount of the NIR notes, and not only that, why then could they not sell it for that price in the market and instead had to execute a debt transfer for it?

As I see it this issue of how precisely SSEV (which later changed to HLNT) was saddled with $6 million in notes without any rational corresponding asset is the heart of the issue. And on top of that there allegedly may have been forgery, fraud, and conflicts of interest in the transaction on the part of Humphries. The deposition and document discovery was in part to uncover and expose those issues, but as I recall management stated they had in hand examples of fraudulent documents which were left behind after Humphries departed.

I am sorry I do not have anying more concrete to share, but that is my view of the core of the case. I hope that helps. At the very least you may now want to try to do your own DD to discover just why HLNT (formerly SSEV) ended up with these convertible notes in the first place. How did they get them and what did they receive for that $6 million albatross?

Anyone with better knowledge please correct any factual errors I may have made here, this is my best effort interpretation of the events and I do not wish to mislead anyone.