"Not sure about the dialog, but make note of the footnote."
Per the company:
The footnote is to a table of SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS in a required filing made by JBI with the SEC on 4/30/13. The data in that table is "as of the date of April 29, 2013". Specifically, it indicates that John Borydnuik's holding includes "4,323,846 shares owned of record".
Per Bordynuik:
In a Schedule 13D amendment filed with the SEC on 5/24/12 by Bordynuik he reported holding 4,323,846 shares.
(Note that he also reported that:
"On April 12, 2012, the Reporting Person initiated the transfer of 300,000 shares of Common Stock to each of two charitable organizations. On the same day the Reporting Person also initiated the transfer of 400,000 shares to Matthew Ingham, the Issuer’s Chief Financial Officer. The transfers were gifts and no consideration was received by the Reporting Person in connection with the transactions. The Reporting Person will file a Form 4 reflecting this transfer when it is completed by the transfer agent."
No Form 4 was ever filed to reflect the disposition of any of the 1,000,000 shares reflected by those "gifts". If he made those gifts on 4/12, as he says he did, they occurred during a period in which he was still an officer and director of the company and a Form 4 was required. The fact that he did not file a Form 4 for that purpose was also absent from the Section 16(a) Beneficial Ownership Reporting Compliance section of the 10-K/A filed by the company. Both of those things are required, aren't they?)
For some reason the Canadian courts, at least the ones that I've tried to research, do not offer the transparency in terms of public disclosure of testimony as the US Courts do through things like Pacer. I do not know the original source of the following, but I believe it to be true. It represents an exchange between the plaintiff's attorney and defendant Bordynuik (Welland Court File No:3612/12 Court File NO.:CV-12-2474-00) regarding his holdings and the sale of a portion of them from:
The Cross-Examination on an Affidavit sworn December 28,
2012, and January 28, 2013, of, John Bordynuik,
defendant, taken upon an oath in the above action this
1st day of February, 2013, at the office of Nimigan
Mihailovich Reporting, Hamilton, Ontario.
Q. How many shares have you sold?
A. For consideration?
Q. Yes.
A. 850,000.
Q. In the market?
A. Yes.
Q. And you have 3.2 remaining?
A. No, I didn't say that. 3.4.
Q. 3.4 million shares?
A. Yes.
To sum up:
If the transcription of Bordynuik's testimony is accurate, he sold 850,000 shares of JBI common between 5/24/12 and 4/29/13 yet the company reported on 4/30/13 that he had not sold any shares at all during that period.
There are other issues (which can wait) regarding the actual timing of his gifts, although their resolution would be critical to determining exactly when he could have legally started selling shares without being obligated to report the sales. We do know that no Form 4 was ever filed to comply with this requirement:
"A reporting person no longer subject to Section 16 of the Securities Exchange Act of 1934 (“Exchange Act”) must
check the exit box appearing on this Form."
We saw such Form 4's filed by the Pipe investors that were no longer subject to Section 16 and he is not exempt from that requirement, as far as I know.
But those issues probably aren't nearly as meaningful to shareholders, both those who bought through placements and retail investors, as the purported undisclosed sale of 850,000 shares by the company founder might be. Perhaps an awareness on the part of some shareholders that those sales were occurring accounts for some of the weakness in the share price and it shouldn't be entirely attributed to the operational difficulties that the company has been reporting. Or perhaps some are only becoming aware of the purported sales now.
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