Replies to post #948 on Lot78 Inc. (LOTE)

[G13man]

I call B S [ Builder Shenanigans ]& [ Buyers Suckered ]
4 for 1 SPIT

"In addition, the Company will increase the number of authorized common shares from 75,000,000 to 350,000,000. " [75,000,000 times 4 = 300,000,000 ]

The forward split will affect all shareholders uniformly and will not affect any shareholder's ownership percentage. "

75,000,000 times 4 = 300,000,000
that means the company is taking 50,000,000 for itself or 1/7th which is a devaluation to stock holders . This does affect all shareholder's ownership percentage !!!!

[rhumphre1]

4 for 1 forward split? 75M X 4 = 300M! Where is the extra 50M going to or should I say who's pockets are they filling? Appears someone in management was NOT paying attention in MATH 101!

[janice shell]

LOTE has been off the Reg SHO list for more than a week.

[BigBake1]

I applaud your effort and knowledge of at least the correct reports and not citing the Daily Reg SHO report, however there are a few things wrong with the data presented. The FTDs did grow but they also fell, showing there is an aggregate that maybe continuous but not likely. There are many reason that cause FTDs, some of which can take up to 35 days to deliver shares for in accordance with SEC Rule 203, those typically apply to conversion and warrants. However of real interest was the actual short position taken against the stock, that has more bearing currently on the huge move up and is likely the only real cause along with promotion.

But here we have the FTD data and a little more current picture:

 20130429 54567W101 LOTE 1178227 LOT78, INC. COM STK 6.05 
 20130430 54567W101 LOTE 1129254 LOT78, INC. COM STK 8.02 
 20130501 54567W101 LOTE 973980 LOT78, INC. COM STK 8.25 
 20130502 54567W101 LOTE 524691 LOT78, INC. COM STK 9.00 
 20130503 54567W101 LOTE 566198 LOT78, INC. COM STK 7.94 
 20130506 54567W101 LOTE 619939 LOT78, INC. COM STK 7.33 
 20130507 54567W101 LOTE 587051 LOT78, INC. COM STK 7.55 
 20130508 54567W101 LOTE 602624 LOT78, INC. COM STK 8.80 
 20130509 54567W101 LOTE 542995 LOT78, INC. COM STK 10.46 
 20130510 54567W101 LOTE 510881 LOT78, INC. COM STK 11.38 
 20130513 54567W101 LOTE 569616 LOT78, INC. COM STK 11.00 
 20130514 54567W101 LOTE 521984 LOT78, INC. COM STK 12.23

As you noted it hit over 1 million shares, but now of course it has dropped and as noted the Reg SHO flag has not been displayed for over a week. Someone converted shares and was selling prior to the forward split and the NEW shares issued and now has delivered those SHORT shares as per SEC Rule 203:

Rule 203(b)(2)(ii) provides an exception from the uniform locate requirement for situations in which a broker-dealer effects a sale on behalf of a customer that is deemed to “own” the security although, through no fault of the customer or the broker-dealer, it is not reasonably expected that the security will be in the physical possession or control of the broker-dealer by the settlement date. Footnote 71 of the Adopting Release states that one such situation is where a customer owns stock that was formerly restricted, but presently may be sold pursuant to the provisions of Rule 144 under the Securities Act of 1933 (17 CFR 230.144). Rule 144 securities may not be capable of being delivered on settlement date due to processing to remove the restricted legend. In such situation, delivery should be made on the sale as soon as all restrictions on delivery have been removed, and in any event within 35 days after trade date. If delivery is not made within 35 days after the trade date, the broker-dealer that sold on behalf of the person must either borrow securities or close out the open position by purchasing securities of like kind and quantity.

So the FTD issue has been resolved and just for future reference an FTD can occur for some of the following reasons as per the SEC:

Many times the member will experience a problem that is either unanticipated or is out of its control, such as (1) delays in customer delivery of shares to the broker-dealer; (2) an inability to borrow shares in time for settlement; (3) delays in obtaining transfer of title; (4) an inability to obtain transfer of title; and (5) deliberate failure to produce stock at settlement which may result in a broker-dealer not receiving shares it had purchased to fulfill its deliver obligations.

And of course the over all SEC statement concerning FTD’s:

Please note that fails-to-deliver can occur for a number of reasons on both long and short sales. Therefore, fails-to-deliver are not necessarily the result of short selling, and are not evidence of abusive short selling or “naked” short selling. For more information on short selling and fails-to-deliver, see http://www.sec.gov/spotlight/keyregshoissues.htm, http://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm, and http://www.sec.gov/rules/final/34-50103.htm.

As I said early the only real factor was the actual significant short position taken against the security. I look forward to reading the Bi Monthly Report and the FTD reports for the next period.

[qtipjoe]

This issue will continue and continue with no real end it sight. There is room for wheeler-dealers and bottom feeders , flippers and stupid money here and as a result this will go on. After awhile it could even get boring.