Replies to post #36432 on VIPR Industries Inc (fka VIPR)

[break-even]

Hello Mr. Griffin............. Here's some reading material.
Here's an email I received today from Mr. Jason Bogutski
from VIPR's transfer agent(Signature Stock Transfer, Inc.)
There's a little humor in it for me, because if I'm reading
between the lines correctly and my interpretation is correct
it's going to cost me $4,200,000,000 dollars. That's correct $4.2 billion
to convert my old shares to the new shares if I was to have
Scottrade issue me my old certificates and then I send them to
the T/A for conversion to the new ones...."Good Laugh"
Take a look at this email and see what your interpretation is
on this subject. I'm not all that bright on these kind of issues
but I'm sure there could be someone on this board who can under-
stand all this mumbo-jumbo.
For what it's worth......I think there is a long and bumpy road ahead for us and I don't see anything happening in the near future
that will get Vipr moving again unless there is a miracle on the
hozron.(jmop).
Also there is a little more reading material after the email that might be of a little interest for those who might not understand
what has happened to this stock.( Note...I did not write or compose this material....all of it came off the internet)


VIPR Exchanges {**}
3

Hide Details
FROM:
Jason Bogutski

TO:
[e-mail]
Message flagged Sunday, July 29, 2012 10:19 AM
Please see the attached list of exchanges for this company.

Please advise if you have any further questions regarding these exchanges. To exchange you old shares please return your old certificate back to Signature Stock Transfer’s offices with a letter requesting the transfer of the stock into the new share form with the processing fees of $55.00USD per each new certificate requested back and $15.00USD per each certificate presented (for example if you currently have 1 certificate and you want 1 certificate back reflecting the attached corporate action the fees are $70.00USD).

If you wish to have your stock transferred to a way other than what is currently on your certificate we will need the holder or entities name currently on the certificate Signature Guaranteed by bank or a brokerage house. Note - If the shares are remaining in the same name that is on the certificate a Signature Guarantee will not be required. If you need a Signature Guarantee Form please advise.

**Please also note because of the rule changes by the IRS regarding cost basis which is enforced by the SEC we now need the following additional items which are now mandatory before we can issue any additional shares for any companies or complete any transfers of stock that we are the agent for (effective 1-1-2011).

Please provide the complete address for each new shareholder (for both for US and non-US citizens).
The Tax ID number for each new shareholder (this is only required if they are a US citizen).
The cost basis/purchase price for the shares (please provide this as a total not on a per share basis for both for US and non-US citizens).

Note the above changes are part of the Emergency Economic Stabilization Act of 2008 - IRS Code Section 6045A whereby final regulations were published by the IRS on 10-12-2010.


Please note if you have restricted stock and are looking to remove the restriction whereby the shares have been held over 12 months time please state this in your request and please provide the total processing fees (including the $70.00USD mentioned above) of $220.00USD total per holder. A restriction is denoted by either a black or a red stamp on the front or the back of the certificate stating the shares are restricted (usually under rule 144), if no legend appears then the shares are already free trading and please disregard this paragraph.


To receive a copy of your account please see below:

Printout of a shareholder(s) statement -

For a printout of a account of a shareholder, please provide the following information to Signature Stock Transfer, Inc. by either mail, facsimile, or by email:

1) The securities name & class of stock.
2) The registered name of each holder with their current address.
3) The Social Security Number for each holder.
4) The certificate number(s) of each transaction (if known).
5) A telephone number, facsimile number, email address or mailing address to contact you.
6) A statement asking for a copy of each holder’s account.


Thank you

Jason M. Bogutski-President
SIGNATURE STOCK TRANSFER, INC.
2632 Coachlight Court
Plano, Texas 75093
Tel [phone]
Fax [phone]
Email - [e-mail]


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Definition of 'Chill'
Special restrictions that can be placed on a given security by the Depository Trust Company (DTC). Chill restrictions are intended to limit the potential for problems within the financial marketplace, and can be placed on a security for various reasons.

Investopedia explains 'Chill'
Owned by many financial companies including the New York Stock Exchange (NYSE), the DTC acts as a clearinghouse for stock exchange securities, settling trades in corporate and municipal securities. If the DTC has cause to be concerned about a specific security currently processed through its system, it may place a "chill" status on the security. This will restrict brokerages' ability to transfer the shares or units of the security through DTC until the security's issues are cleared up or it ceases trading on the market.

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Over the last few months a lot has happened in the micro cap world. Probably the biggest thing is the fact that one of the largest clearing houses, Penson Financial Services, will no longer clear stocks under a dime.

A few months ago, Penson put in place a new policy that essentially paralyzed all stock deposits, clearing and what have you for sub dime stocks. This new policy is across the board meaning no certs, no DWAC, DRS, ACAT or any other method for any stock under a dime.

Obviously this does not affect companies that clear elsewhere… yet. Rumor has it that other big houses will follow suit.

There are two big impacts of this policy…

The first is self explanatory and we have already covered it; no more stocks of any kind under a dime through Penson. The second however is that many of the bigger online trading firms clear through Penson. This means that if a trader or investor who uses one of the big online brokers and they clear through Penson, that trader or investor cannot purchase shares of any stock trading under a dime.

How to get around this?

For the big online trading firms, if they expect to keep all those commissions they earn on the numerous daily trades on the thousands of Pinks and OTCBBs that are under a dime, they are going to have to clear these elsewhere. This may or may not happen and if it does, it will take a while. The only way to buy and sell stocks under a dime is through smaller firms and full service firms. Being that most of the action on these low priced stocks are by traders and especially day traders, that will not work well. Day trading and having to use a phone is like asking a neurosurgeon to do a delicate procedure wearing welding goggles and gloves.

I have spoken to individuals at many of the big Financial firms in NYC over the last several weeks. They are already moving to smaller clearing firms or setting up their own clearing in-house. It might surprise many to know how many big financial firms in the Big Apple deal with small stocks. There is too much money to be made to let the sub dime stocks fall by the wayside.

There is a caveat however… and here is the biggest point I will make in this article:

They will only take stock of companies that are FULLY REPORTING and DTC eligible. They do not care what the price is as long as the company is fully reporting.

In other words, there is a big weeding out underway right now.

Speaking of DTC eligible, those companies that have lost DTC eligibility are going to get weeded out too. Why?

[color=red]Stocks that are not DTC eligible run a strong risk of having trading of their stock suspended by trading firms because of the expensive administrative nightmare it causes. What makes this even more painful is if the stock suddenly gets good volume. That volume will dry up as trading firms suspend trading in that security.

When a stock is not DTC eligible, all the week’s trades have to be settled through PAPER CERTIFICATES; it is expensive and time consuming and most trading firms do not have adequate resources to handle this especially on high volume stocks. To compound the problem, the traders of that stock receive an unpleasant statement the following month because the costs of the administration of non-DTC eligible stocks are passed on to the people who bought and sold the security. This can amount to several hundred dollars for each trader/investor.


If a stock is DTC eligible all transactions are handled automatically and electronically.

More on DTC eligibility…

One of the best ways to lose DTC eligibility is to register stock in any other form than an S-1. Many Pink Sheet and OTCBB companies are still doing things like 504s which is severely frowned upon by the DTC.

Many companies that have done a reverse split over the last year or so have had their stock “chilled” (non-DTC eligible) by the DTC. The reason they are getting chilled is because right after the reverse split takes place, the company registers more shares (usually through a 504) for sale. This pisses the DTC off and they chill the stock and no matter how many resources the affected company throws at the DTC, they continue to be chilled and the DTC becomes less responsive.


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Rule 504 of Regulation D

Rule 504 of Regulation D provides an exemption from the registration requirements of the federal securities laws for some companies when they offer and sell up to $1,000,000 of their securities in any 12-month period.

A company can use this exemption so long as it is not a blank check company and does not have to file reports under the Securities Exchange Act of 1934. Also, the exemption generally does not allow companies to solicit or advertise their securities to the public, and purchasers receive "restricted" securities, meaning that they may not sell the securities without registration or an applicable exemption.

Rule 504 does allow companies to sell securities that are not restricted, if one of the following circumstances is met:

The company registers the offering exclusively in one or more states that require a publicly filed registration statement and delivery of a substantive disclosure document to investors;
A company registers and sells the offering in a state that requires registration and disclosure delivery and also sells in a state without those requirements, so long as the company delivers the disclosure documents required by the state where the company registered the offering to all purchasers (including those in the state that has no such requirements); or
The company sells exclusively according to state law exemptions that permit general solicitation and advertising, so long as the company sells only to "accredited investors."
Even if a company makes a private sale where there are no specific disclosure delivery requirements, a company should take care to provide sufficient information to investors to avoid violating the antifraud provisions of the securities laws. This means that any information a company provides to investors must be free from false or misleading statements. Similarly, a company should not exclude any information if the omission makes what is provided to investors false or misleading.

While companies using the Rule 504 exemption do not have to register their securities and usually do not have to file reports with the SEC, they must file what is known as a "Form D" after they first sell their securities. Form D is a brief notice that includes the names and addresses of the company’s owners and stock promoters, but contains little other information about the company.

In February 2008, the SEC adopted amendments to Form D, requiring that electronic filing of Form D be phased in during the period September 15, 2008 to March 16, 2009. Although as amended, the electronic Form D requires much of the same information as the paper Form D, the amended Form D requires disclosure of the date of first sale in the offering. Previously, the first date of sale was not required. The Office of Small Business Policy has posted information on its web page about the filing requirements for the new Form D.

If you are thinking about investing in a Reg D company, you should access the EDGAR database to determine whether the company has filed Form D. If you need a copy of a Form D filed as a paper filing (which will include any Form D filed before September 15, 2008) that has not been scanned into IDEA, you can request a copy using our online form. If the company has not filed a Form D, this should alert you that the company might not be in compliance with the federal securities laws

You should always check with your state securities regulator to see if it has more information about the company and the people behind it. Be sure to ask whether your state regulator has cleared the offering for sale in your state. You can get the address and telephone number for your state securities regulator by calling the North American Securities Administrators Association at [phone] or by visiting its website. You’ll also find this information in the state government section of your local phone book.


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DTC CHILLS ON ISSUER SECURITIES: HAS THE SEC TAKEN A STEP TO HALT THE SMALL CAP ICE AGE?
The U.S. “small cap” public markets are comprised primarily of very small public companies with limited operating and revenue histories, low stock prices, volatile trading in their stock and very low market capitalization values. These companies are traditionally known as “penny stock” issuers that trade on the OTCBB and Pink Sheets. Many of these companies do not qualify for listing on national exchanges such as NASDAQ, and probably never will. Nonetheless, they are operating companies with investors and shareholders that must comply with SEC regulations. In recent years, these companies have suffered from limited capital raising opportunities, heightened SEC scrutiny, and the fallout from investigations of fraud in the reverse merger industry. Basically, the small cap market (and small cap companies) have really taken a hit. To make matters worse, it looks as if there is an ice age coming to the small cap market one “chill” at a time.

The Depository Trust Company (DTC) is a clearinghouse for securities exchanges. The DTC system provides brokers with the ability to electronically settle stock trades. In essence, it is one of the largest (if not the largest) electronic clearance conduits for trading and settling securities in the U.S. public markets. In recent years—and now with greater frequency than ever—the DTC is issuing “chills” on small cap stock. A “DTC chill” is the DTC’s decision to make an individual company’s securities ineligible for electronic clearance. This means that brokers attempting to clear securities in that company’s stock must do so the old fashioned way: by hand. Brokers cannot sustain the time, costs, or inefficiencies of providing manual clearance service, so many brokers decline to trade “chilled” securities. As a result, fewer and fewer brokers are willing to trade chilled stock, and sooner or later, the stock just won’t trade. Basically, once a company’s stock is chilled, it becomes almost impossible for it to trade, which means it is also very difficult for the company to raise capital, issue stock strategically, or preserve or enhance the market value of its stock.

The reach of the DTC’s power to influence the capital markets is staggering: the SEC noted that in 2010 alone, the DTC processed 295,000,000 book-entry transfers of securities worth $273.8 trillion. Only a small fraction of that value resides in the small cap market, but in proportion to other segments of the U.S. capital markets, the small cap market has been very hard hit by the DTC chill decisions. Given the lack of warning and the amorphous path to having a chill removed (assuming the DTC voluntarily agrees to do so), these DTC chills (in large numbers and if unchecked) could cause the small cap markets to freeze over.

DTC chills are very frustrating to small cap issuers: because the DTC provides a service to broker-dealers and “participants” in the DTC system and not to the companies themselves, the DTC is not obligated to inform issuers of the decision to chill stock! As a result, the company is often the last to know. More importantly, it is very difficult (if not sometimes impossible) to find out from the DTC why stock was chilled in the first place. Having the chill removed is a “case by case” battle and lacks a legal structure or process for companies to follow. The DTC has taken the position that it owes no particular duty to issuers to explain or review a chill decision despite the fact that a chill can be a death knell to the company.

Of course, like any market, there are some bad apples in the small cap population—some would say a disproportionately large number of such apples (that should be permanently frozen). And some would say that the SEC, FINRA, and the DTC are working in a pointed effort to eliminate those bad apples (and take everyone else with them). Some issuer stock is, of course, properly chilled by the DTC (without notice) — for fraud, lack of reliable SEC reporting, etc.

In light of this growing problem, the SEC has (finally) taken a step towards melting the impending small cap ice age. On March 15, 2012, the SEC issued an administrative opinion (In the Matter of the Application of International Power Group, Ltd. Admin. Proc. File No. 3-13687) stating that an issuer is entitled to some form of due process proceedings by the DTC before a chill is placed on a company’s securities. The SEC did not say what the standards should be to institute or lift a chill, but that issuers are entitled to “fair procedures” by the DTC. In addition, the opinion provides that an issuer that loses the fight with the DTC could appeal that loss through an SEC administrative proceeding. The DTC can continue to chill stocks without prior notice in “emergency situations” but must still provide an opportunity to have the chill reviewed.

While this SEC opinion doesn’t herald a revitalization of the small cap markets (or for that matter, the return of the Woolly Mammoth), it does create an acknowledgment that the DTC should use the chill power more judiciously and be prepared to defend its decisions within a legal framework. Of course, there are still many unknowns: When will the DTC create the required procedures? What steps, if any, will the SEC take to monitor or enforce DTC procedures? And, will the DTC take further legal action that would nullify the SEC’s decision? So, it remains to be seen if the small cap ice age as been averted or just delayed; however, for small cap companies making every effort to legitimately run their business and comply with securities regulations, this SEC opinion offers some hope that the DTC won’t be able to leave their stock out in the cold.


"GO VIPR......TO THE MOON ONE OF THESE DAYS"