Replies to post #24983 on Active Health Foods Inc (AHFD)

[Golden Cross]

Looks like it can Vermicious Knid...$AHFD

[OCMillionaire]

Read to understand please :O What the past management did happened to someone else:
What has transpired here has taken place on many other stocks and here is an example what happens:

According to the SEC’s complaint, from approximately December 2012 to June 2013, microcap stock financier Magna Group, which was founded and owned by Joshua Sason, engaged in a scheme to acquire fake convertible promissory notes supposedly issued by penny stock issuer Lustros Inc. and then to convert those notes into shares of Lustros common stock. The defendants then sold the shares to unsuspecting retail investors, who did not know that the shares were fraudulently acquired and were being sold illegally. The defendants’ sales of the Lustros shares also had the effect of destroying the value of the Lustros shares held by the public. The complaint alleges that Marc Manuel, Magna Group’s former head of research and due diligence, personally negotiated and executed the sham transactions.

Here is a typical scenario where this could occur: a company issues a convertible promissory note to evidence a loan. Amounts owing under the note may be converted into the company’s common stock at the note holder's discretion. The conversion price is typically at a discount (often 15-20%) to the then-current trading price of the company’s common stock. (Convertible notes issued by OTC-traded companies often have “floorless” convert provisions, meaning there is no "floor price" that limits how low the conversion price can go. Floorless convert provisions are not permitted under NASDAQ rules for NASDAQ-traded companies.)

The convertible note holder could then legally short the company's stock to drive the share price down. The note holder then coverts the note at the lower share price and receives more shares in the conversion.[iv] While many CEOs and CFOs are shocked to learn that this abusive and manipulative tactic is legal — indeed it is! See the case of ATSI Communications Fund, Ltd. (2d Cir. 2009), where shorting prior to note conversions was alleged to have occurred. The court said it was perfectly legal for the convertible note holder to short the company's stock prior to initiating a note conversion. The court stated, "Purchasing a floorless convertible security is not, by itself or when coupled with short selling, inherently manipulative." (emphasis added.)

Now all that has taken place and the guy is in jail, we can move forward! All illegal stock MUST be converted :D