Replies to post #12204 on RemSleep Holdings Inc (RMSL)

[louieforpar]

Monday, April 16, 2012 3:14:01 PM
Re: gump90 post# 193560

Post # of 207320
gump.

just spoke with a broker at morgan stanley,the following is what he said is Fact.

now that the s-1 has been filed,the SEC will within 30 days publish the prospectus.this process is a must.and there will be a series of filings in relation to the s-1.

however,there is absolutly NO GURANTEE that katx has to honor this latest spin-off.

i specifically asked if there was anything that governs as to when katx has to give out those shares by,and he said NEVER.

he did go onto say that given the previous distro share debacle he would imagine that there would definatly be some sort of class action suit from investors.


so given the current scamming ways of the steads i supppose i will prove to be right once again and say this will never happen as well.

[Dubb10]

Here is why I believe it will happen. It revolves around the SEC and DTC.

If they don't satisfy the S-1, then (IMO) it could be considered in the realms of insider trading if they should issue shares to themselves, issue a press release, then sell their shares or dilute the stock. The point of insider trading laws is to prohibit people with key information that will affect the PPS to profit or prevent substantial loss before that information is provided to all shareholders. They are pretty much blocking the market from affecting them financially. By not issuing the shares to all shareholders who are eligible to receive them, they are (in a sense) blocking the market from affecting them financially.

To further elaborate, a bigger hurdle will arise if the Steads introduced the market to additional shares of BVIG, without satisfying the terms of the S-1 first.
They stated the following in the DEF 14C:

Effects of the Increase in Authorized Common Stock

The additional shares of Common Stock will have the same rights as the presently authorized shares, including the right to cast one vote per share of Common Stock. Although the authorization of additional shares will not, in itself, have any effect on the rights of any holder of our Common Stock, the future issuance of additional shares of Common Stock (other than by way of a stock split or dividend) would have the effect of diluting the voting rights and could have the effect of diluting earnings per share and book value per share of existing stockholders.

At present, the board of directors has no plans to issue the additional shares of Common Stock authorized by the Amendment. However, it is possible that some of these additional shares could be used in the future for various other purposes without further stockholder approval, except as such approval may be required in particular cases by our charter documents, applicable law or the rules of any stock exchange or other quotation system on which our securities may then be listed. These purposes may include: raising capital, providing equity incentives to employees, officers or directors, establishing strategic relationships with other companies, and expanding the Company’s business or product lines through the acquisition of other businesses or products.

We could also use the additional shares of Common Stock that will become available pursuant to the Amendment to oppose a hostile takeover attempt or to delay or prevent changes in control or management of the Company. Although the board’s approval of the Amendment was not prompted by the threat of any hostile takeover attempt (nor is the board currently aware of any such attempts directed at the Company), nevertheless, stockholders should be aware that the Amendment could facilitate future efforts by us to deter or prevent changes in control of the Company, including transactions in which stockholders of the Company might otherwise receive a premium for their shares over then current market prices.

They won't be able to flood the market with shares. Without the ability to flood the market with additional shares, they lose leverage with their "poison pill" (described in the last paragraph of the quote). They also won't be able to sell the shares they own into the open market.

Why? Not only will the Steads face legal action from shareholders, they will also fact legal action from the SEC. Legal action from the SEC leads to a suspension of trading by the DTC. That means the market can't be flooded with new shares. Brokers also suspend trading of the stock until the matter with the SEC is resolved. Their OTC tier will also be affected.

How do I know this? I currently own a stock that is going through this. One of their financiers performed an (alleged) illegal action as stated by the SEC, so the SEC filed a lawsuit against the financier. That led to a chain reaction that has the stock of several companies suspended from trading by the DTC. Refer to: Securities and Exchange Commission v. Yossef Kahlon

If they wanted to bypass all of this and truly screw shareholders, then the shares they distributed to shareholders would have been restricted. If they restricted all of the shares now, then that would violate the terms of the S-1, the SEC will have to get involved, and the chain of events I already described will occur. Only some of the shares are restricted, according to the S-1. I know someone said that a broker prevented spin-off shares being traded before. I contacted Etrade, but they won't comment until the DTC has the paperwork filed from Kat. I may have to call them about this as a follow-up. They should be settled. IF the DTC steps in and restricts trading for a period of time, then that may be a different scenario. That would happen in the case of a "chill" placed by the DTC. I don't see why they would in this case.

As I've said before, IMO they are waiting til the A/S is officially increased. That should happen within the next few weeks. Shares will be issued to eligible shareholders sometime after that. If the Steads issue shares before that, then they lose their leverage with their "poison pill". When stockholders have their shares, and the A/S is increased, then anything can happen to the PPS. Hopefully we get news, the PPS increases, then (IMO) it will probably drop in a sell-off.