Caz, I just posted the reply received from OTC Markets and am sure you will have read it sooner or later.
To answer your questions on why it would be a concern I have to ask first...do you really want to know? And please don't take that the wrong way. I'm being serious.
Under most circumstances, there wouldn't be a concern other than the company having less favorable capital raising terms should the company need to do so in the future if listed in OTC Pink as opposed to OTCQB. You are also right in that, through no fault of the company's, they would even have to face the possibility of de-listing. The problem or concern with two aspects (one each) of the above is detailed in the YA Global deal terms. The listing requirement and unfortunately, the cause being voluntary or involuntary being irrelevant.
We need to start here with the Securities Purchase Agreement:
This section in and of itself is not a problem. It is quoted to begin laying the foundation for understanding other verbiage in the terms of the deal. Primary Market is bolded for this reason.
In the same linked document is this section:
Notice the definition of what a Primary Market includes...AMEX, NASDAQ, NYSE or OTC Markets and what it excludes...OTC Pink.
Now moving onto the document from the agreement Exhibit 102:
This is the document that outlines, amongst other things, Events of Default.
So remember earlier the two points that were made...so what if it is down-listed to OTC Pink and the reason for down-listing being through no fault of the company's? The above quoted section addresses both of those in this particular circumstance.
Do you see why now it was necessary to understand the other verbiage, specifically, the definition of what OTC Markets is for the purpose of this agreement, which is a Primary Market and why OTC Pink was specifically excluded from that definition?
It is from this point that all of the remedies available to YA Global under any default provision become important and this leads us to all of the documentation that stipulates the control they have over the company. They can be found in the remaining exhibits and are too numerous to post. Reference them in Section 7 Remedies here:
Aside from ultimately gaining control over all company assets including intellectual property, both current and future, YA Global also has to approve anything the company does which negates at least one short term remedy to avoid failing the bid test and that is a reverse split.
In the event of a default, Ya Global can gain control of the company. What happens after that can be summed up by multiple scenarios but none that are good for the SVFC stockholder.
This is where knowing how YA Global has conducted business in the past is important. They have acquired companies both bankrupt and those who have defaulted. It is with these companies that they got themselves into hot water with the SEC over how they valued those acquired assets and mislead their investors in order to collect higher fees.
They also have a track record of continuing to fund companies whereby they supply cash to companies in exchange for shares at steep discounts upon which they sell in the open market. Red Rock Resources has been a well they've tapped many many times. Just read the filings from the Red Rock Resources company website.
Should any of this occur, the likelihood of shareholders learning about any behind the scene dealings, changes, whatever are virtually nil. If it were to happen, I suspect they would wait to announce anything until they finished converting their note as well as waiting until Dominion converted their note as to avoid any potential dispute between those two parties. What happens after that could be SVFC continues but under the management of YA Global or they let SVFC the stock go to zero and de-list its shares in order to sell the company (with nothing being due shareholders) or they re-list Intellicell as a new company (again, with nothing due existing shareholders).
We can only hope if this plays out that is if what many believe comes to pass and that is YA Global being a true investor because at this stage they would be the owners save for what shareholders owned and if they truly were interested in seeing the potential realized of the company, they believed it was more lucrative to own the company than go through the hassle to sell it.
As with everything, there are no guarantees of anything playing out in one way or another but I think I've laid out a pretty good reason why there is risk and why every shareholder should be concerned.
Under most circumstances, there wouldn't be a concern other than the company having less favorable capital raising terms should the company need to do so in the future if listed in OTC Pink as opposed to OTCQB. You are also right in that, through no fault of the company's, they would even have to face the possibility of de-listing. The problem or concern with two aspects (one each) of the above is detailed in the YA Global deal terms. The listing requirement and unfortunately, the cause being voluntary or involuntary being irrelevant.
We need to start here with the Securities Purchase Agreement:
This section in and of itself is not a problem. It is quoted to begin laying the foundation for understanding other verbiage in the terms of the deal. Primary Market is bolded for this reason.
In the same linked document is this section:
Notice the definition of what a Primary Market includes...AMEX, NASDAQ, NYSE or OTC Markets and what it excludes...OTC Pink.
Now moving onto the document from the agreement Exhibit 102:
This is the document that outlines, amongst other things, Events of Default.
So remember earlier the two points that were made...so what if it is down-listed to OTC Pink and the reason for down-listing being through no fault of the company's? The above quoted section addresses both of those in this particular circumstance.
Do you see why now it was necessary to understand the other verbiage, specifically, the definition of what OTC Markets is for the purpose of this agreement, which is a Primary Market and why OTC Pink was specifically excluded from that definition?
It is from this point that all of the remedies available to YA Global under any default provision become important and this leads us to all of the documentation that stipulates the control they have over the company. They can be found in the remaining exhibits and are too numerous to post. Reference them in Section 7 Remedies here:
Aside from ultimately gaining control over all company assets including intellectual property, both current and future, YA Global also has to approve anything the company does which negates at least one short term remedy to avoid failing the bid test and that is a reverse split.
In the event of a default, Ya Global can gain control of the company. What happens after that can be summed up by multiple scenarios but none that are good for the SVFC stockholder.
This is where knowing how YA Global has conducted business in the past is important. They have acquired companies both bankrupt and those who have defaulted. It is with these companies that they got themselves into hot water with the SEC over how they valued those acquired assets and mislead their investors in order to collect higher fees.
They also have a track record of continuing to fund companies whereby they supply cash to companies in exchange for shares at steep discounts upon which they sell in the open market. Red Rock Resources has been a well they've tapped many many times. Just read the filings from the Red Rock Resources company website.
Should any of this occur, the likelihood of shareholders learning about any behind the scene dealings, changes, whatever are virtually nil. If it were to happen, I suspect they would wait to announce anything until they finished converting their note as well as waiting until Dominion converted their note as to avoid any potential dispute between those two parties. What happens after that could be SVFC continues but under the management of YA Global or they let SVFC the stock go to zero and de-list its shares in order to sell the company (with nothing being due shareholders) or they re-list Intellicell as a new company (again, with nothing due existing shareholders).
We can only hope if this plays out that is if what many believe comes to pass and that is YA Global being a true investor because at this stage they would be the owners save for what shareholders owned and if they truly were interested in seeing the potential realized of the company, they believed it was more lucrative to own the company than go through the hassle to sell it.
As with everything, there are no guarantees of anything playing out in one way or another but I think I've laid out a pretty good reason why there is risk and why every shareholder should be concerned.