Replies to post #11853 on ScripsAmerica Inc. (SCRCQ)

[Huggy Bear]

Whoa Nellie. Thanks and I will take a look. And I thought the other 8-K was strange...

[Alleyba1]

Alleyba says............

.............that item 3.02 is clear

The rest of the filing appears they can buy $2,000,000 of SCRC stock maximum.It goes to talk about share lending agreement which I suppose is the missing piece, but I believe that is collateral for GEM.

IMO GEM wants company to obviously succeed and be abler to exercise warrants. I would not be surprised to see a lot of buying coming in over the next few days due to contacts from GEM and its partners.65 countries..lots of foreign buying and we are getting prepared for China.I am looking for a nice move

NOW, THEREFORE , in consideration of the mutual covenants and other agreements contained in this Agreement the Company and the Investor hereby agree as follows:

1. Purchase and Sale of Common Stock. Subject to the terms and conditions of the Share Lending Agreement and the Subscription Agreements, the Company shall issue and sell to the Investor (or any of its affiliates) and the Investor shall purchase from the Company (or cause one or more of its affiliates to purchase from the Company) up to a maximum of $2,000,000 of Common Stock (the “ Maximum Limit ”) during the term of the Share Lending Agreement. Notwithstanding anything to the contrary, the parties expressly acknowledge and agree that this Agreement does not, and is not intended to be, and shall not be deemed to be or construed as, a commitment by Investor to purchase any shares of Common Stock from the Company or to provide any other financial accommodation to the Company, or by the Company to consummate such transactions. Investor’s willingness to purchase shares of Common Stock will be solely pursuant to the terms and conditions of the Share Lending Agreement and one or more Subscription Agreements, and is subject to the satisfaction of the conditions set forth therein.

[crookedneck]

In regards to your concern about "Share Lending" that you previously never heard about, here is some insightful information you might find useful. I will also tell you that has been used by many companies and is not as unusual of an event as you tend to think, as you will see below, though I am sure it is new to plenty of investors here, so I understand the confusion it can cause. Which is why I thought I would share a little bit about the program here, but you must understand it can get very complicated and there are many reasons for entering into an agreement of this sort. Again, nobody can make any assumptions that it will be utilized to short the stock, as that would be a very short sighted approach and could very well be completely wrong! I hope you and others find this useful and that it may help clear up a few things in regards to your concerns. Cheers!

Securities lending – the temporary transfer of securities on a collateralised basis – is a major and growing activity providing significant benefits for issuers, investors and traders alike. These are likely to include improved market liquidity, more efficient settlement, tighter dealer prices and perhaps a reduction in the cost of capital. The scale of securities lending globally is difficult to estimate, as it is an “over the counter” rather than an exchange-traded market. However, it is safe to say that the balance of securities on loan globally exceeds 3 trillion.

Most securities loans are collateralised, either with other securities or with cash deposits. Where lenders take securities as collateral, they are paid a fee by the borrower. By contrast, where they are given cash as collateral, they pay the borrower interest but at a rate (the rebate rate) that is lower than market rates, so that they can reinvest the cash and make a return. Pricing is negotiated between the parties and would typically take into account factors such as supply and demand for the particular securities, collateral flexibility, the size of any manufactured dividend and the likelihood of the lender recalling the securities early.

Not all securities lending is motivated by short selling. Financing drives many transactions – the lender is seeking to borrow cash against the lent securities, whether using repo, buy/sell backs or cash-collateralised securities lending.
Another large class of transactions not involving a short comprises those motivated by lending in order to transfer ownership temporarily, an arrangement which can work to the advantage of both lender and borrower.

For example:
Where a lender would be subject to withholding tax on dividends or interest but some potential borrowers are not. The borrower receives the dividend free of tax, and shares some of the benefit with the lender in the form of a larger fee or larger manufactured
dividend.

Read more: www.ehow.com/facts_7554227_share-lending-agreement-defined.html#ixzz2jERPZbUX

Stock Lending - Frequently asked questions

What is stock lending? Stock lending is the temporary transfer of securities, by a lender to a borrower, with agreement by the borrower to return equivalent securities to the lender at pre-agreed time. There are two main motivations for stock lending; securities-driven, and cash-driven. In securities-driven transactions, borrowing firms seek specific securities (equities or bonds), perhaps to facilitate their trading operations. In the cash-driven trades, the lender is able to increase the returns on an underlying portfolio by receiving a fee for making its investments available to the borrower. Such transactions may boost overall income returns, enhancing, for example, returns on a pension fund.

What sorts of securities can be used in stock lending?
Securities lending covers all sorts of securities including equities, government bonds and corporate debt obligations.

What are the legal underpinnings for stock lending?
Parties to a stock lending transaction generally operate under a legal agreement such as the Global Master Securities Lending Agreement that sets out the obligations of the borrower and lender. In securities lending the lender effectively retains all the benefits of ownership, other than the voting rights. The borrower can use the securities as required - perhaps by lending them on to another party - but is liable to the lender for all the benefits such as dividends, interest, or stock splits.

What are the benefits of stock lending?
There are many positive aspects of stock lending. It can:

increase the liquidity of the securities market by allowing securities to be borrowed temporarily; thus reducing the potential for failed settlements and the penalties this may incur.
provide extra security to lenders through the collateralisation of a loan
support many trading and investment strategies that otherwise would be extremely difficult to execute
allow investors to earn income by lending their securities on to third parties
facilitate the hedging and arbitraging of price differentials

Can stock lending be harmful?
Stock lending, is not a harmful practice. Many feel that securities lending could aid market manipulation through short selling, which can potentially influence market prices. Short selling as such is not wrong (although market manipulation certainly is) and stock lending can assist those that have sold stock short, thus adding liquidity to the market. Another alleged potential abuse is that of tax evasion. Stock lending does not assist tax evasion.

[Huggy Bear]

CHP - I have been over this a half dozen times and I still can't wrap my head around it. I have never ever seen anything like it before, this Share Lending provision.

I am still searching for some answers that make sense. In the meantime I for sure would not count out your "license to short" theory.

The whole 8-K is messed up IMO. I mean, what kind of disclosure of a material event was that with no terms of anything important disclosed? These are the things a real investor wants to know, not just something saying some deal has been struck but we have not finalized the specific terms yet...

Suspicious as hell IMO, but that is just my opinion. Good luck here kind SCRC shareholders.