"01/27/2016 5:52:10 PM
Posted By: StockTracker
Re: casey7883 #2287
Quotes by TradingView
Why doesn't HJOE pay the loans then there isn't questions about converting shares. If HJOE has the money to repay the loans why wait to be sued and then go the the expense of fighting a lawsuit.
HJOE stated that they couldn't pay off the loans. No one is expected to repay the loans at the time they are taken out. "
stocktracker - it is difficult to take you seriously if you are going over these points without the proper frame of reference in which the statements were made relative to filing/loans. i am a strong proponent of the pros and cons but your arguments/questions seem to be more negative and trying to discredit the company than trying to elicit understanding.
as far as your questions above - who is to say that HJOE didnt try to repay the capital and KBM explicitly refused and instead demanded the full penalties, interest, and stock instead? at this point, it is reasonable to assume that the non filing halted the toxic conversions and the ability for KBM to drive the company out of business through the aggressive shorting/conversions. when the company did start generating revenue, it would make sense to go back to the table and negotiate a fair and reasonable settlement of the outstanding debts. can you honestly argue that KBM was willing to just take a check for $64K (plus reasonable interest) and call it settled...? if that was the case, lenders would have been lining up to get these removed and let the company move forward.
as far as everyone knowing they were toxic lenders - that simply isnt the case. the two founders had no public background and would really not understand how vicious the cycle of shorting is. if someone is talking to you about being a partner in your business and helping you succeed and you take them at face value - you are not expecting that they are going to take your knees out as soon as you turned around. how many investors here are "new to investing" and still do not understand the death spirals? i have been in the position of doing bad deals (for me/my company) when i had little to no leverage but did what i had to do to keep things going. difference is, the suppliers or lenders didnt turn around and try to wipe me out as soon as the deal was inked.
to act like HJOE was fully aware of the vicious nature of the lending is absurd. unfortunately, by the time that Veal was brought aboard who did understand the nature, they were already being diluted and then untouchable by traditional lenders (while also in the midst of a major lending crunch that STILL has not loosened up).
i still contend the issue of this entire trial/case will come down to "good faith" in negotiating the contract/agreement. in any state or federal court - if both parties do not enter in good faith, contracts are deemed void. this is where the "unclean hands" come in to play. if one has no experience with these types of lenders - they do not know that they are NOT a partner in their business like a normal bank/lender. once they start diluting and turning "the machine" on - it is very difficult to escape - thus the death spiral. companies with limited to no resources are basically forced to keep dealing with the lenders as they become untouchable. this is where the real fraud exists - the lenders have no intention or expectation of the company repaying the loans (because they know it is very difficult to generate that revenue, cash, outside lending in the 3-6 months because of the cash flow crunch) in cash and that they will have free reign to start converting and working in concert with willing MMs.
to suggest that HJOE entered this in bad faith/unclean hands because they knew the lenders were dirty is absurd or woefully ignorant of the history of the company. in 2012 - the company was doing rather well in their growth and revenues and had ZERO toxic lending. it wasnt until they were held hostage by PLN due to several, disruptive and critical product run failures that the cash flow was completely upended, inventories taken hostage, and HJOE had to go this route to stay alive. Veal wasnt brought in until after the death spiral started.
i think the biggest difference with this instance is KBM miscalculated HJOEs ability to thrive let alone fight back. most companies are either in cahoots with the lenders or they simply do not have the means or stock leverage to withstand the relentless shorting/conversion cycles. i personally believe this is why there is an insane level of bashing/attacks from the company to try and dislodge shareholders from any belief or confidence in the stock/company. however, as many have continued to see in their own DD - the dealer network is expanding. shareholders are speaking with actual dealers. they are calling actual store locations, they are speaking with SMS, etc.
one of the common retorts from iGlow is the company said the product was in 30K stores. however, the way i remember the actual statement/PR - they said the distributor (Core-Mark or others) distributed to over 30K stores. just one way to subtly twist the facts/truth to inject doubt. if this is all an elaborate scheme to bilk shareholders - how are the founders/insiders making money? even when they were routinely filing - they NEVER filed documents showing they sold shares. they did file that they were loaning the company money and foregoing salaries at NO interest and non convertible terms (a favorite of shell companies that promote inside lending as "confidence" in the company and next filing they have converted massive shares and sold them on the market). the founders/insiders have rather publicly and repeatedly said they have never sold shares. if there is ANY proof that they had - besides the actual securities fraud, they would be crucified by perpetuating the fraud.
when one looks at the entirety of both HJOE and the lenders, it becomes clearer and more objective what the end games are for the lenders and HJOEs limited options for fighting back. ultimately, it is going to be up to the judge (once all the perfunctory legal maneuvers are performed) to determine the credibility of both parties claims, circumstances, and damages/proceeds. it will be clear the proceeds from KBM as they have a document trail of the number of shares they received and what they were sold for in the market. it will be much tougher for HJOE to show damages unless they use past cases and market caps as the measure. it is going to be even tougher for KBM to claim damages due to the profits they received from the conversion and selling of shares above and beyond what the initial lending rates/commitments were for.
unclean hands and bad faith will go a LONG way in how a judge treats the semantics of these filings and the claims of damages. i personally believe it is going to be a steep hill KBM to get a sympathetic judge if/when it is shown they made hundreds of thousands of dollars in profits on a $64K loan and then cried they were defrauded/damaged in the process. further, with the unclean hands being documented and plenty of history of these actions destroying other hands - their only defense/counter is (what we already heard on these boards) "the defendant knew we were dirty/lent like that so they must have come in with unclean hands as well." i have personal experience with that tactic as it was tried on me (not in a securities case but a civil suit over a partnership). it was quickly disproven but the taint it leaves is palpable. it is the very reason negative ads are so effective with campaigning.
i also believe this will not go to trial. if i a correct on the above (actual trading profits), i think a judge will be incensed by his courtroom being cluttered with this case. further, if HJOE did try to pay back the initial loans and try to reach an alternative settlement and were rebuffed or ignored, a judge will become even more unsympathetic as the usury terms/action then become more apparent.
it will probably be several months before we really get anything material in terms of the proceedings. there will be plenty of legal jockeying, threats, tactics, etc. if KBM realizes HJOE is NOT going away and has the legal/financial means to take this to trial - i think they will make it go away. with 12 average people, i do not think they can convince a majority that they were damaged and that a fledgling company struggling for survival is the bad guy.
Posted By: StockTracker
Re: casey7883 #2287
Quotes by TradingView
Why doesn't HJOE pay the loans then there isn't questions about converting shares. If HJOE has the money to repay the loans why wait to be sued and then go the the expense of fighting a lawsuit.
HJOE stated that they couldn't pay off the loans. No one is expected to repay the loans at the time they are taken out. "
stocktracker - it is difficult to take you seriously if you are going over these points without the proper frame of reference in which the statements were made relative to filing/loans. i am a strong proponent of the pros and cons but your arguments/questions seem to be more negative and trying to discredit the company than trying to elicit understanding.
as far as your questions above - who is to say that HJOE didnt try to repay the capital and KBM explicitly refused and instead demanded the full penalties, interest, and stock instead? at this point, it is reasonable to assume that the non filing halted the toxic conversions and the ability for KBM to drive the company out of business through the aggressive shorting/conversions. when the company did start generating revenue, it would make sense to go back to the table and negotiate a fair and reasonable settlement of the outstanding debts. can you honestly argue that KBM was willing to just take a check for $64K (plus reasonable interest) and call it settled...? if that was the case, lenders would have been lining up to get these removed and let the company move forward.
as far as everyone knowing they were toxic lenders - that simply isnt the case. the two founders had no public background and would really not understand how vicious the cycle of shorting is. if someone is talking to you about being a partner in your business and helping you succeed and you take them at face value - you are not expecting that they are going to take your knees out as soon as you turned around. how many investors here are "new to investing" and still do not understand the death spirals? i have been in the position of doing bad deals (for me/my company) when i had little to no leverage but did what i had to do to keep things going. difference is, the suppliers or lenders didnt turn around and try to wipe me out as soon as the deal was inked.
to act like HJOE was fully aware of the vicious nature of the lending is absurd. unfortunately, by the time that Veal was brought aboard who did understand the nature, they were already being diluted and then untouchable by traditional lenders (while also in the midst of a major lending crunch that STILL has not loosened up).
i still contend the issue of this entire trial/case will come down to "good faith" in negotiating the contract/agreement. in any state or federal court - if both parties do not enter in good faith, contracts are deemed void. this is where the "unclean hands" come in to play. if one has no experience with these types of lenders - they do not know that they are NOT a partner in their business like a normal bank/lender. once they start diluting and turning "the machine" on - it is very difficult to escape - thus the death spiral. companies with limited to no resources are basically forced to keep dealing with the lenders as they become untouchable. this is where the real fraud exists - the lenders have no intention or expectation of the company repaying the loans (because they know it is very difficult to generate that revenue, cash, outside lending in the 3-6 months because of the cash flow crunch) in cash and that they will have free reign to start converting and working in concert with willing MMs.
to suggest that HJOE entered this in bad faith/unclean hands because they knew the lenders were dirty is absurd or woefully ignorant of the history of the company. in 2012 - the company was doing rather well in their growth and revenues and had ZERO toxic lending. it wasnt until they were held hostage by PLN due to several, disruptive and critical product run failures that the cash flow was completely upended, inventories taken hostage, and HJOE had to go this route to stay alive. Veal wasnt brought in until after the death spiral started.
i think the biggest difference with this instance is KBM miscalculated HJOEs ability to thrive let alone fight back. most companies are either in cahoots with the lenders or they simply do not have the means or stock leverage to withstand the relentless shorting/conversion cycles. i personally believe this is why there is an insane level of bashing/attacks from the company to try and dislodge shareholders from any belief or confidence in the stock/company. however, as many have continued to see in their own DD - the dealer network is expanding. shareholders are speaking with actual dealers. they are calling actual store locations, they are speaking with SMS, etc.
one of the common retorts from iGlow is the company said the product was in 30K stores. however, the way i remember the actual statement/PR - they said the distributor (Core-Mark or others) distributed to over 30K stores. just one way to subtly twist the facts/truth to inject doubt. if this is all an elaborate scheme to bilk shareholders - how are the founders/insiders making money? even when they were routinely filing - they NEVER filed documents showing they sold shares. they did file that they were loaning the company money and foregoing salaries at NO interest and non convertible terms (a favorite of shell companies that promote inside lending as "confidence" in the company and next filing they have converted massive shares and sold them on the market). the founders/insiders have rather publicly and repeatedly said they have never sold shares. if there is ANY proof that they had - besides the actual securities fraud, they would be crucified by perpetuating the fraud.
when one looks at the entirety of both HJOE and the lenders, it becomes clearer and more objective what the end games are for the lenders and HJOEs limited options for fighting back. ultimately, it is going to be up to the judge (once all the perfunctory legal maneuvers are performed) to determine the credibility of both parties claims, circumstances, and damages/proceeds. it will be clear the proceeds from KBM as they have a document trail of the number of shares they received and what they were sold for in the market. it will be much tougher for HJOE to show damages unless they use past cases and market caps as the measure. it is going to be even tougher for KBM to claim damages due to the profits they received from the conversion and selling of shares above and beyond what the initial lending rates/commitments were for.
unclean hands and bad faith will go a LONG way in how a judge treats the semantics of these filings and the claims of damages. i personally believe it is going to be a steep hill KBM to get a sympathetic judge if/when it is shown they made hundreds of thousands of dollars in profits on a $64K loan and then cried they were defrauded/damaged in the process. further, with the unclean hands being documented and plenty of history of these actions destroying other hands - their only defense/counter is (what we already heard on these boards) "the defendant knew we were dirty/lent like that so they must have come in with unclean hands as well." i have personal experience with that tactic as it was tried on me (not in a securities case but a civil suit over a partnership). it was quickly disproven but the taint it leaves is palpable. it is the very reason negative ads are so effective with campaigning.
i also believe this will not go to trial. if i a correct on the above (actual trading profits), i think a judge will be incensed by his courtroom being cluttered with this case. further, if HJOE did try to pay back the initial loans and try to reach an alternative settlement and were rebuffed or ignored, a judge will become even more unsympathetic as the usury terms/action then become more apparent.
it will probably be several months before we really get anything material in terms of the proceedings. there will be plenty of legal jockeying, threats, tactics, etc. if KBM realizes HJOE is NOT going away and has the legal/financial means to take this to trial - i think they will make it go away. with 12 average people, i do not think they can convince a majority that they were damaged and that a fledgling company struggling for survival is the bad guy.
