In response to a question I had about dilution and
Post# of 519
Posted On: 09/02/2015 1:47:42 PM
In response to a question I had about dilution and restricted shares coming onto the market!!!!!
---- Raymond Barton <rbarton@peachtreefund.com> wrote:
>
> My response. A bit long but I wanted to explain it thoroughly:
>
> ok, first, the recent disclosure is for Apr-Jun and everyone knows that spring and summer is a down trend for online sales. Most healthcare products especially suck-wind during those months. I have to remind everyone that this is still a start-up company for our purposes…focussing on retail distribution (which is now beginning to pay off) is going to result in a drop of online sales because a growing operation can not put 110% into everything at the same time. That is just common sense. Anyone who has ever run a real business knows that when you expand into a new area, everything else dips by 100-300%. they also know that when your sales are minimal, a week out of stock can cause a 200% drop in revenue so sales figures are volatile and unreliable as a gauge at these levels, its just a fact.
>
> Now, anyone who calls any of the CEO’s liars should be seriously ashamed of themselves. Anyone saying this is a greedy, ignorant, underachiever who just want the stock to go up so they can make money and really have no business investing in the first place because they lack the knowledge and ability to tell the difference from a scam and a real company. They should do themselves a favor and put their money into a good managed mutual fund. I personally know Nick for 15+ years, Justin too. Brandon for 5 or 6…I can tell you with 1000% confidence that all these guys try 110% to do what’s best for MDIN, and they try their hardest to make the right decisions in a market that changes daily. We don’t have robots running this company, they are all human beings with lives and minds like yours trying to do their best. They will make mistakes, misjudgments, lose deals, lose sales, they will stumble, they will screw up, they will trip, but they all pick themselves back up, dust off and forge ahead. None of them, Nick included, got much benefit from this project as of yet and they all work basically for free. Because they believe its going somewhere. None of them have or can sell stock…none of them took any serious salary. Who does that unless they believe in a light at the end of the tunnel?
>
> As for the stock…Its very easy to use words like “dump”. I wonder if these people saying these things have ever actually read any of the securities laws. Do they know what becoming free trading means, and what happens when a stock is free trading? 500 million shares are NOT becoming a year old anytime soon and that is just a flat out lie. There are only 44 million restricted shares issued, so that is just impossible. Anyone saying this clearly does not know the rules. There may be 500 million shares that could possibly be issued on convertible debt, that could be true (I don’t know the number)…but if converted, the owner would instantly become an insider and be heavily limited in his/her ability to sell if allowed at all. This is something that is not new, and this has driven me absolutely crazy for a long time. Everyone talks about dilution…dilution…dilution. I am asked "is the CEO dumping shares?”, or "is the company dumping shares?” or if I, myself am dumping shares, and that has never even been possible! Look, Anyone with more than 10% of the outstanding shares is automatically an “insider”. No brokerage firm will sell shares for an insider on stock under a penny. period. An “insider" with a trillion shares is the same threat to dilution as someone with none. Regardless of their status with the company…just based on the number of shares. Even so, if 500 million shares were issued from converting debt, they would belong to insiders and be newly issued shares. In conclusion, there is NO danger of that happening even though it would not dilute the company for another year or more.
>
> Possibly more important is the fact is that anyone in the securities industry should know that FINRA changed their enforcement policy around June 2014 and certificate shares for non-reporting companies are now no longer clearable after a year under the non-shell rule in Rule 144. Yes, you heard me right!…Anyone issued restricted shares will not be able to sell them after a year under Rule 144 as they could before, unless the company becomes fully reporting again (and stays that way, on time, for 12 months). So without boring you all with legal nonsense, any non-reporting company that has a period in its history where it was not reporting (to edgar or to the OTCmarkets without a gap) is no longer eligible for Rule 144 to apply until it has been fully reporting for a full year. Meaning, if the company issues you a certificate you can never sell it until the company has been fully reporting for a full year no matter how long you hold it. This is a big deal and I cannot believe that after a year since the change, people are still talking about dumping, dilution or restricted shares becoming free trading…it can no longer happen. Period. I really don’t care if the company had a trillion shares becoming a year old, they are all worthless to the holders, at least until MDIN is fully reporting.
>
> Even when shares become free trading (which BTW only means the legend is removed and it is categorized as not restricted) they still can not be sold yet! They need to be deposited and “cleared” by a clearing firm. There are only two main clearing firms which take stock priced under a penny, Alpine and Cor. Both will not even look at a cert for a company like MDIN because of the FINRA non-shell enforcement I just described. The only way out of this situation is an exemption to Rule 144 called 4(a)1 which says if you are not an underwriter, and you hold the shares for an additional 2 years then it can be cleared. However, anyone buying or being issued restricted shares is automatically considered an underwriter. So that’s that. Put simply, there are NOT 500 million shares becoming free trading. They couldn’t be sold even if they were, nobody is dumping anything, and of those of us that are funding this project and receiving shares, we are all in this until the company is fully reporting and even then we will be restricted in our selling to 1% of the daily average volume each day, so the stock would have to trade a LOT higher and with 100% the volume for me to ever get out. Its a long term play.
>
> While I am mentioning that, I am often vilified if i am issued shares. If people see me get shares then I am automatically a scammer, liar, greedy, and a lot of words i don’t want to reprint. However, everyone must realize that these shares that are issued occasionally to myself or anyone are not being “given” to us. They are not being issued for the hell of it, just so I can dump them and make a few bucks...They represent real cash out of my pocket coupled with real work-hours I am putting in here, and real serious, very very serious risk. Risk that I will never be able to sell them. Debt is converted to shares at a 50% discount, so even with the overwhelming risk that I’ll never be able to sell it, and the knowledge that if I do it is years away, all I can possibly do is double my money. Now, If any of you would like to put cash up for the company after knowing what I just told you, the immense risk, and tying your money up for 2-5 years, then you can email investors@medgeninc.com and inquire. The company would gladly sell you a convertible debt security like the ones I have funded MDIN with these past several years. If not then I would rather you just thank us for keeping the project alive for five years with no reward yet in sight.
>
> In closing anyone saying that I, or the CEO, or the past CEO’s are liars or scammers in any way are just very small, very ignorant people who speak before finding out facts for themselves. Often its because they bought high and sold low out of a lack of investor experience and are bitter about it. Instead of taking up the cause and helping, they choose to bash out of anger, vengeance, and an inability to blame themselves for their failures. I’m OK with it personally. Bash away! Karma has plans for them. I am sure of it.
>
> Thank You for your time.
> Ray Barton
>
>
>
---- Raymond Barton <rbarton@peachtreefund.com> wrote:
>
> My response. A bit long but I wanted to explain it thoroughly:
>
> ok, first, the recent disclosure is for Apr-Jun and everyone knows that spring and summer is a down trend for online sales. Most healthcare products especially suck-wind during those months. I have to remind everyone that this is still a start-up company for our purposes…focussing on retail distribution (which is now beginning to pay off) is going to result in a drop of online sales because a growing operation can not put 110% into everything at the same time. That is just common sense. Anyone who has ever run a real business knows that when you expand into a new area, everything else dips by 100-300%. they also know that when your sales are minimal, a week out of stock can cause a 200% drop in revenue so sales figures are volatile and unreliable as a gauge at these levels, its just a fact.
>
> Now, anyone who calls any of the CEO’s liars should be seriously ashamed of themselves. Anyone saying this is a greedy, ignorant, underachiever who just want the stock to go up so they can make money and really have no business investing in the first place because they lack the knowledge and ability to tell the difference from a scam and a real company. They should do themselves a favor and put their money into a good managed mutual fund. I personally know Nick for 15+ years, Justin too. Brandon for 5 or 6…I can tell you with 1000% confidence that all these guys try 110% to do what’s best for MDIN, and they try their hardest to make the right decisions in a market that changes daily. We don’t have robots running this company, they are all human beings with lives and minds like yours trying to do their best. They will make mistakes, misjudgments, lose deals, lose sales, they will stumble, they will screw up, they will trip, but they all pick themselves back up, dust off and forge ahead. None of them, Nick included, got much benefit from this project as of yet and they all work basically for free. Because they believe its going somewhere. None of them have or can sell stock…none of them took any serious salary. Who does that unless they believe in a light at the end of the tunnel?
>
> As for the stock…Its very easy to use words like “dump”. I wonder if these people saying these things have ever actually read any of the securities laws. Do they know what becoming free trading means, and what happens when a stock is free trading? 500 million shares are NOT becoming a year old anytime soon and that is just a flat out lie. There are only 44 million restricted shares issued, so that is just impossible. Anyone saying this clearly does not know the rules. There may be 500 million shares that could possibly be issued on convertible debt, that could be true (I don’t know the number)…but if converted, the owner would instantly become an insider and be heavily limited in his/her ability to sell if allowed at all. This is something that is not new, and this has driven me absolutely crazy for a long time. Everyone talks about dilution…dilution…dilution. I am asked "is the CEO dumping shares?”, or "is the company dumping shares?” or if I, myself am dumping shares, and that has never even been possible! Look, Anyone with more than 10% of the outstanding shares is automatically an “insider”. No brokerage firm will sell shares for an insider on stock under a penny. period. An “insider" with a trillion shares is the same threat to dilution as someone with none. Regardless of their status with the company…just based on the number of shares. Even so, if 500 million shares were issued from converting debt, they would belong to insiders and be newly issued shares. In conclusion, there is NO danger of that happening even though it would not dilute the company for another year or more.
>
> Possibly more important is the fact is that anyone in the securities industry should know that FINRA changed their enforcement policy around June 2014 and certificate shares for non-reporting companies are now no longer clearable after a year under the non-shell rule in Rule 144. Yes, you heard me right!…Anyone issued restricted shares will not be able to sell them after a year under Rule 144 as they could before, unless the company becomes fully reporting again (and stays that way, on time, for 12 months). So without boring you all with legal nonsense, any non-reporting company that has a period in its history where it was not reporting (to edgar or to the OTCmarkets without a gap) is no longer eligible for Rule 144 to apply until it has been fully reporting for a full year. Meaning, if the company issues you a certificate you can never sell it until the company has been fully reporting for a full year no matter how long you hold it. This is a big deal and I cannot believe that after a year since the change, people are still talking about dumping, dilution or restricted shares becoming free trading…it can no longer happen. Period. I really don’t care if the company had a trillion shares becoming a year old, they are all worthless to the holders, at least until MDIN is fully reporting.
>
> Even when shares become free trading (which BTW only means the legend is removed and it is categorized as not restricted) they still can not be sold yet! They need to be deposited and “cleared” by a clearing firm. There are only two main clearing firms which take stock priced under a penny, Alpine and Cor. Both will not even look at a cert for a company like MDIN because of the FINRA non-shell enforcement I just described. The only way out of this situation is an exemption to Rule 144 called 4(a)1 which says if you are not an underwriter, and you hold the shares for an additional 2 years then it can be cleared. However, anyone buying or being issued restricted shares is automatically considered an underwriter. So that’s that. Put simply, there are NOT 500 million shares becoming free trading. They couldn’t be sold even if they were, nobody is dumping anything, and of those of us that are funding this project and receiving shares, we are all in this until the company is fully reporting and even then we will be restricted in our selling to 1% of the daily average volume each day, so the stock would have to trade a LOT higher and with 100% the volume for me to ever get out. Its a long term play.
>
> While I am mentioning that, I am often vilified if i am issued shares. If people see me get shares then I am automatically a scammer, liar, greedy, and a lot of words i don’t want to reprint. However, everyone must realize that these shares that are issued occasionally to myself or anyone are not being “given” to us. They are not being issued for the hell of it, just so I can dump them and make a few bucks...They represent real cash out of my pocket coupled with real work-hours I am putting in here, and real serious, very very serious risk. Risk that I will never be able to sell them. Debt is converted to shares at a 50% discount, so even with the overwhelming risk that I’ll never be able to sell it, and the knowledge that if I do it is years away, all I can possibly do is double my money. Now, If any of you would like to put cash up for the company after knowing what I just told you, the immense risk, and tying your money up for 2-5 years, then you can email investors@medgeninc.com and inquire. The company would gladly sell you a convertible debt security like the ones I have funded MDIN with these past several years. If not then I would rather you just thank us for keeping the project alive for five years with no reward yet in sight.
>
> In closing anyone saying that I, or the CEO, or the past CEO’s are liars or scammers in any way are just very small, very ignorant people who speak before finding out facts for themselves. Often its because they bought high and sold low out of a lack of investor experience and are bitter about it. Instead of taking up the cause and helping, they choose to bash out of anger, vengeance, and an inability to blame themselves for their failures. I’m OK with it personally. Bash away! Karma has plans for them. I am sure of it.
>
> Thank You for your time.
> Ray Barton
>
>
>
(0)
(0)MedGen Inc (MDIN) Stock Research Links
Scroll down for more posts ▼