i have alot of shares guys and love the company. Whats your guys take on this post on ihub he is really respected on ihub just curious thanks
Shares issued to Ironridge at 70% of the market price plus processing fees equal to 11% of the amount borrowed from Ironridge is a better funding deal than most other short term toxic penny stock financing deals?
Hardly.
It is still a very toxic deal that amounts to hundreds of millions of super discounted free trading stock and high interest rates (in this case processing fees).
Ironridge is still due approximately $519,643.74 from the first round of $643,134 in financing they provided and that is after already receiving 143,500,000 shares towards that debt. That means a few hundred million more free trading shares of RFMK stock will get issued to Ironridge to get dumped into the market.
When Ironridge finishes dumping their 143,500,000 free trading shares they got on September 19th and comes calling for their next big round of shares they are going to want the RFMK share price to be as low as possible so that they will have more opportunity for profits. Just like they want the share price to be as high as possible while they are selling their shares. It is all about profiting as much as possible for Ironridge. That means the biggest part of the Ironridge dumping will happen right before they put in their request for their next round of approximately 145,000,000+ free trading shares.
Their financing agreement prevents them from shorting RFMK to drive the price down, but it doesn't prevent them from using heaving dumping on the back end to position the share price for them to get more RFMK shares for their money for the next round of dumping.
This is a must read post about how the financing deal works
http://investorshub.advfn.com/boards/read_msg...d=80277315
Ironridge cannot provide $2.2 million in financing without doing an S-1 filing. The Form D 504 exemption only covers up to $1,000,000 in financing. Since $195,000 of that financing was already used up before the Ironridge deal that means the most RFMK will be able to borrow from Ironridge is $805,000. That is actually good news for the RFMK shareholders because bottom line is that this is a very toxic financing agreement that will cause hundreds of millions of shares to be diluted into the market (possibly over 1 billion shares if the full $805,000 is borrowed).
That makes the latest PR about $2.2 in funding mostly just hype to help pump the share price. Just like the 10K that will never happen (all hype to pump the share price).
I'm curious what makes the Ironridge/RFMK 504 offering any different than the toxic 504 offerings that TJ Management and Fairhills used to get discounted free trading stock in pink sheet companies that recently landed them in SEC litigation (links below)
http://www.sec.gov/news/press/2012/2012-165.htm
http://sec.gov/litigation/complaints/2012/com...12-165.pdf
http://www.sec.gov/litigation/complaints/2012/comp22452.pdf
Fact is that it isn't any different. It is illegal.
Here is a great article published by an experienced SEC attorney that explains why 504 stock is almost never legally free trading.
http://www.securitieslawyer101.com/the-rule-504-myth/
