Replies to post #12095 on Sunergy, Inc. (fka SNEY)

[techtrade]

Excellent post and analysis. I agree that the transactions were most likely buys for all the reasons you mentioned. Also, if you look at the days on which the transactions took place, they were (mostly or) all green days which would make sense only if he was buying.

I hadn't thought about it being intention, but that makes sense as well. Not nice to screw shareholders around like that though, but the world isn't a nice place so nothing is shocking.

I'm still waiting to start buying again once the technicals improve, but I'm looking forward to the ensuing run once it does.

[stervc]

mylife4america (& All), with the SNEY Form 4 filed...

With that Form 4 that was filed incorrectly by SNEY, it was confusing because they filled out either one or the other columns incorrectly as block 4 was inconsistent with what was listed as the total shares owned reflected in descending order. I am sure many investors had noticed this.

The total amount of shares should have been in ascending order since the "A" character represents shares acquired or bought. Or they should have used the "D" character which represents shares disposed of or sold since the total amount of shares were filed in descending order.

Still, technically speaking, the confusion should not have spooked investors as it did because any shares bought should be considered a good thing as the company establishing what they believed to be a new bottom and any shares sold should be considered likewise a good thing too because it was simply no more than the company funding itself.

I think I don’t need to explain why shares bought should be considered a good thing, but I will explain why shares sold with their filing of the Form 4 should be considered a good thing considering if they truly meant for them to be reflected as sells.

A while back I called the SEC to ask them to educate me about a company buying back shares. I asked to have explained to me the requirements associated with who should fill out a Form 4 and the requirements associated with buying and selling those shares. This is what I had explained to me.

I was told that any Officer or Director that buy shares in their own company must fill out a SEC Form 4 no later than 2 days after their purchases. (There was a spot where I read that they could have up to 10 days to do so somewhere too although that’s not what’s important as I was told that extra time could also be granted if needed.) The guy I spoke with also told me that every person who owns more than 10% of a stock will be ”required” to fill out a Form 4 too under the same rule for such time frame. (I actually thought it was a person owning at least 10%, but he might have been a little rusty on that piece.)

For those who are Officers and Directors that have free trading shares looking to sell, the guy from the SEC said that they cannot sell any of their shares until after 6 months go by. A Form 4 must be filled out for selling those shares too.

Now this is the part that was brand new to me for the better…

The guy from the SEC further told me that when those Officers and Directors directly related and associated with the company decide to sell, all profits made from them selling any of the Form 4 shares must be considered going directly to the company to be filed with the company’s financials. Profits are considered Income and is to be used for funding the company so I think you can imagine what this would do for a company’s financials/EPS. I had to give the guy a few examples to make sure I was interpreting what he told me correctly.

Please understand the example below…

So, hypothetically, if you were an Insider/Officer/Director and bought 1 million shares of a stock at .05 per share, you would have paid…

1,000,000 x .05 = $50,000

You would have to hold these shares for at least 6 months, but let’s say that the price of the stock goes from .05 per share to .50 per share six months from now for when you would have sold. It would equate to what’s indicated below:

1,000,000 x .50 = $500,000

Out of that $500,000, the profits would be…

$500,000 - $50,000 = $450,000 in Profits

So, the above $450,000 indicated as Profits, must go directly back to the company to be reported within their financials as Income based on what the guy from the SEC told me about these profits. They have to be administratively listed within the company’s financials as profits made by the company. Again, Profits are considered Income. He further stated that these profits must be used to fund the company operations. The money “could not” be used for anything personal or outside of funding the company operations.

That was something that was new to me because I thought it was more of a personal issue where the Officer and Director of the company could personally keep those profits for themselves. The examples in my notes are written stating that the guy from the SEC told me that only the principle amount paid ($50,000 for this example) can go directly into the pockets of the Officer, Director, etc. doing the buying. The remaining $450,000 as Profits/Income must go directly back into the company to fund their operations. I still think that this is awesome for shareholders of a company if such is the case as this is a very astute way for the company to fund some of their operations considering when they would have bought their shares at a discounted price.

The guy from the SEC told me that what he had explained to me for answering my questions is located in Section 16 of the Securities Exchange Act of 1934:
http://www.sec.gov/divisions/corpfin/34act/sect16.htm

I think he mentioned a couple of other references in which I did not exactly get. He said that the profits going back to the company is a rule and must be adhered to. He said it is referred to something called Short Swing Profits or Short Swing Transitions.

On the contrary though with the profits, he also told me that it works the opposite if the Officers and Directors sell shares for a loss versus for profits, he mentioned that a company usually would not sell at a loss as it would be to their disadvantage. Usually the shares bought would simply be held until the company’s share price is in a better position for the shares to be sold as profits.

I spoke to an accountant a while back that also verified what I posted to be true about Form 4s, but he stated that the guy from the SEC probably meant that the profits will be listed on the Income Statement as ”Other Income” which would fall into the total amount to derive Net Income.

For those wanting to further verify anything of what I was told, call the SEC number below:
http://www.sec.gov/contact/phones.htm
SEC Toll-Free Investor Information Service:
1-800-SEC-0330

I think when investors realize that in essence all SNEY has done was to provide funding for themselves, they will begin to migrate back into SNEY as we near the start of their production of gold to begin in Jan 2011. From what many here have already confirmed, the amount of gold they will bring from their gold production operations will be absolutely huge.

I am expecting a major move that will be sustained by their production numbers. I think anyone not familiar with the potential here in SNEY should read the updated valuation post below:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57438855

v/r
Sterling