You raise some good questions, thanks for taking the time!
The recent supplemental filing breaking down the last few years of share issuances, conversions, and major stakeholders seems like a PR move to try and quiet the internet rumors of the company stealthily diluting since the last run up to nearly $1. The supplemental filing is not required and there's no requirement how far back it must go.
It does seem kinda weird that they don't account for a great many older shares, or the 50,000 for 1 dilution of the founding shareholders in two earlier reverse splits that you've mentioned, but that was also a long time ago -- and all they're trying to address in the supplemental filing is activity surrounding the last run up to $1 (especially any claims of dilution in 2021 and the growth in float; see pugsieboy's notes)
The audit on the other hand, absolutely needs traceability for all shares to close those swim lanes.
I've wondered before if the audit firms were having trouble signing off on the audit since millions of shares are still in legal dispute (Savov case), but I wonder if those shares could simply be disclaimered to allow the audit results to be delivered anyway since lawsuits often take years.
If ENZC's legacy bookkeeping is actually missing key information, it seems that could derail any successful audit attempt for the forseeable future. But I don't know how we could know that vs just speculating on it, and that would directly contradict the company's repeated claims that the audit is proceeding "without any issues".
As much as people rightfully point out that ENZC is under new leadership, at least in name, the Bulgaria ties and Harry's continuing influence as CFO and CSO do merit some scrutiny.
We have Harry's track record with IMMB to consider, including:
- An SEC suspension for unsupportable claims that IPF-based compounds could be used as an Ebola treatment, at a time when IMMB was unlicensed for using IPF on Ebola and unable to fund the development of IPF for Ebola.
- The Viral Genetics lawsuit from 2008 claiming Harry tried to divert intellectual property to another company, and per the linked article, "had been involved in an effort to bankrupt Viral Genetics" by approving a convertible debenture that increased the company's debt and devalued its stock through dilution.
- The Viral Genetics lawsuit strangely parallels the more recent Savov/Immunotech claims last year that Harry, bookkeeping for IMMB, engaged in fraud and tried to improperly divert ITV-1 IP from IMMB to ENZC. Important to note that Savov's claims are hearsay so far, since they haven't been addressed through proper legal channels, and that ENZC is actively suing him for making these claims.
- That Livingston Asset Management engaged in toxic lending to ENZC, with dilution and conversions which had ENZC in the low trips leading up to the big run that started late 2020.
These bullet points are all their own cans of worms, with a lot of important context I didn't include here, but it's important to observe that Harry is a common factor. As CSO he currently has influence in how ENZC structures its shares. I find the claim from the supplemental filing "No Dilution has occurred since October 15, 2020, when the total issued reached 2,797,935,953" disingenious because we can clearly see new convertable Series B issued well after that date. In this filing for ECPO on page 5, it's suggested that an old Series B converts 2:1 to Common shares, but a Series B conversion for ENZC documented here suggests the Series B issued to current ENZC insiders (including Harry) in December 2020 convert 10:1 to Common shares. Whatever the rate, it's opaque -- and it IS dilution because new shares were created out of thin air to the detriment of current shareholders. The complexity of these structures and the fact that they have occurred before while Harry was in charge of issuing shares, along with the supplemental filing that appears to be deliberately skirting the facts of new issuances, bring to mind this quote that "beyond a certain point, complexity is fraud."
For my own investment strategy, the delivered audit is a must before I'll put more significant money behind this company for anything other than swings, despite all their exciting promises. I've been burned in the pinks too many times to take a company solely at its word.
And quite frankly, my trust has been shaken in the past few months with the empty promises, overdue deliverables, unexpected silence, and aversion to engaging with those who ask legitimate questions. (Lots of people on here are blocked by the company on Twitter for daring to ask real questions. It's a chronic pattern.)
I'm still long with a small core, and still hoping to see this company take a better track!
Hey Finance, Foxi and others, I appreciate and respect your response Finance. Like you I have an alphabet behind my name, both in the auditing arena as well as the health care arena. University of Michigan, Stanford, MUSC (Medial University of South Carolina). I have defended hundreds of corporate audits at the highest level for HCA (current share price $258, $52 billion in revenue 2020). So much for my introduction and you can draw your conclusions about my creds. I stand by, and would defend, my conclusion based on your initial post to Timing101. We were dealing with broad strokes and I based my conclusion on that. We don't know that the financials from inception have not been provided to the auditor, and, are we auditing from inception or from the merger? I was answering from the merger. As a stock holder I would love to get a hold of their books, and, I am sure you and I together with enough time and proper resources could provide a number of answers to questions that we, as auditors, have. I also did provide caveats in my response to you. I stated that it doesn't mean that there aren't skeletons in the closet. Harry certainly has a checkered past when it comes to his business dealings. He hasn't been the most reliable source of information. I also find it disconcerting that their PR firm and Dr. Chandra have been way over their skis a number of times. Timelines are swim lanes in my mind. I also stated that audits can be requested and shelved for a number of reasons. Maybe it wasn't ENZC that felt the auditor that was replaced was not doing it's job. The initial auditor may have not wanted to put their name on something that they felt was incomplete. I also asked the question in my response to you, "Why now?". The information in the subsidiary disclosure has been available to them for some time. Is the disclosure at the request of the new auditor? You are also correct in the observation in your post that they have "never had any revenues-just lots of promises". Research and Development is the main outlay in any drug development, no matter the size of the company.
Tesla, Facebook and others have all diluted shares, either to raise capital or, in Mark Zuckerbergs play, to boot Facebook co-founder Eduardo Saverin by not providing him voting rights with the new shares. Very common practice and possibly disconcerting for the new investor that doesn't understand it and sees all cap posts screaming about red flags.
You also mentioned that there has been so much focus on the science and not on what is real to the related risks to investing in an OTC stock. I will only speak for myself in stating that my stake in ENZC is because of the science and the patents. You can view my previous posts and attached links concerning the potential that ENZC has. In the end I believe that is what most plays in the OTC are, potential winners, or losers. It doesn't mean that ENZC will be a "game changer" as so many say. They could be. If they can bring the science to market it certainly will fill a huge void, the revenue will come, and the stock price will rise accordingly. If they don't, well... There are any one of a number of stories of great, ahead of their time products that flopped. The Tucker48 was ahead of it's time. The car of the future. A technological marvel. It really was. They had a lack of financial planning and their refusal to utilize conventional loans scared away venture capitalists, brought about an SEC investigation, negative press, and, caused them to fold. I'll address this to the longs. If you had bought a Tucker when it came out for $1000 and held onto it, it would be worth this now:
My overall stake in ENZC compromises less than 1% of my portfolio. I don't have a lot of OTC plays. The majority of my investment strategy has me on the larger exchanges. ENZC has been a great stock to swing trade and I have been more than happy with it's performance so far. I am up over 1000% on my long position and will continue to hold long on this one. Again, I respect your input Finance. It's all about the process and any and all information contributes to that. I wish you good luck. Cheers, Coach P.S. I also have two championship rings and I really want that third one!
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