Replies to post #77808 on Bots Inc (BTZI)

[marathon man]

Nice job Cash, I knew they were selling shares without reporting it... Now I know how they are able to do it within the SEC rules.

Now I ask Paul to take away the discount on the shares he gives as a sign of shareholders best interest!

Of course if he did that how would they scam?

[lesgetrich]

The SEC adopted several modifications of the dribble-out limitations specifically for sales of debt securities.
1. No Manner of Sale Requirement: The manner of sale requirement has been eliminated for sales of debt securities.

I'm not sure that you can classify the amount owed to executives for back pay is a "debt security". From Investopedia...

What is 'Debt Security'

Debt security refers to a debt instrument, such as a government bond, corporate bond, certificate of deposit (CD), municipal bond or preferred stock, that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount borrowed), interest rate, and maturity and renewal date. It also includes collateralized securities, such as collateralized debt obligations (CDOs), collateralized mortgage obligations (CMOs), mortgage-backed securities issued by the Government National Mortgage Association (GNMAs) and zero-coupon securities.

...also, regarding your quote...

2. Revised Volume Limitations: The SEC has raised the volume limitations for debt securities. Subject to the applicable holding period, affiliates may sell debt securities in amounts that in the aggregate do not exceed 10 percent of a tranche (or class when the securities are non-participatory preferred stock), within a three-month period. Sales by non-affiliates are no longer subject to volume limitations.

It's uncertain whether you would consider the entire annual loan amount $120,000 or the monthly accruals ($10,000 each) as a tranche. Your quote says they would be limited to selling no more than 10% of a tranche within a three month period, so at worst case, they could sell $12,000 worth every three months. At $.03/share that's 400,000 shares every three months, hardly enough to impact the pps.

Also, since the conversions have to be approved by the board, they can impose any sales restrictions they want as a condition of continued employment. This makes any SEC restrictions a ceiling on what is allowed.

In any event, neither Paul nor Mike Hawkins can sell any of their compensation stock before April 30, 2017.