Replies to post #123177 on DD Support Board and Research Team

[TenKay]

Correct. The correspondence shows up later. There has been some recent discussion about Section 4(a)1 on this board. One of the issues is that in order for it to be used as an exemption to registration by the re-seller they can't be an "issuer, broker or underwriter" as defined by the Securities Act. It seems to be a stretch to consider a note holder doing multiple conversions as not a "distribution" under the Act which makes them "underwriters" even though they have held the note longer that two years (a requirement developed under case law precedent).

But it seems some lawyers are making the argument they aren't and it is being accepted by the TA's.

[janice shell]

It's also my understanding that even if the SEC had questions about the financials recently submitted, they don't have to publish those communications until the issue is concluded. Right? So shareholders are always in the dark right up to the time of a suspension?

The SEC usually, though not invariably, sends delinquency letters to registrants behind with their filings. I don't know how late the company has to be to get one. It's expected to respond to the letter. If it doesn't, then the SEC may start revocation proceedings anytime between a few months and a year or more.

Naturally the company is free to inform shareholders of receipt of the delinquency letter, but I don't think I've ever seen one do that.