Ouch! Samuel Oshana and Northbridge, eh? He's a specialist in the 3(a)(10) game. So now we know why the authorized capital was raised to 5 billion, and why the TA was suddenly gagged.
Section 3(a)1(10) of the Securities Act provides an exemption from registration. If a creditor (in this case Northbridge) sues an issuer, and then the two settle the case, they can ask the judge to order an issuance of stock that is immediately free trading. In this case, at a gigantic discount to market:
[T]he settlement agreement provides that Northbridge settlement shares will be issued in one or more tranches, as necessary, sufficient to satisfy the Northbridge Settlement Amount through the issuance of freely trading securities issued pursuant to Section 3(a)(10) of the Securities Act of 1933 pursuant to the Settlement Agreement, Northbridge may deliver a request to the company which states the dollar amount designated in US Dollars of common stock to be issued to Northbridge ('The Northbridge Share Request"). The parties agree that the total amount of the Common Stock to be delivered by the company to satisfy Norihbridge Share Request shall be issued at 50% of the closing price of the common stock for 15 day trading period preceding the share request.
Very nasty indeed.
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