For those unfamiliar with corporate equity structu
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Posted On: 10/21/2018 12:15:15 PM
For those unfamiliar with corporate equity structures, and finance, MMEX’s common stock is segregated into two classes, Class A common shares, which trade, and Class B common, non-trading shares.
The latter have a conversion feature, such that under certain conditions, primarily triggered by change of control, will convert on a 1-for-1 basis to Class A common such that they can be sold on the market once they meet registration and/or Rule 144 holding requirements.
The Class B shares have no monetary value, because they are illiquid, i.e. can’t be traded. Their primarily use is to allow Mad J. and The Lemon to retain control over MMEX, as the Class B shares have a 10X voting preference. Combined with certain features of Nevada law (Nevada is a non-recourse state), the 10X voting preference insures that no matter how many Class A shares exist, the Class B can always outvote the Class A common, thus allowing Mad J. and The Lemon to retain decision-making control over the company. This is a common scheme and structure in all sub-penny share-selling scams executed on the OTC.
Additionally, the Class B common shares were created from thin air (like all MMEX common stock), but even thinner than the Class A common - in this case, the 2-billion Class B common shares were used by Mad J. in the control-retention scheme - 1.5-billion of the Class B shares were “awarded” to Maple Resources, in return for “rights” to the “intellectual property” associated with the “refinery project.”
Translated for the MMEX STRONG, Mad J., on the left-hand at Maple, “sold” to Mad J., on the right-hand at MMEX, the “refinery project” for 1.5-billion shares of MMEX’s Class B common stock.
This transaction, in normal corporate finance would have required independent valuation, and certain other requirements, to prevent self-dealing. Unfortunately for MMEX retail “investors,” there is no corporate governance at MMEX, no independent directors on its board, and no valuation was ever conducted.
The notion that Mad J. and The Lemon “backed,” or have any financial exposure in the most recent $600K toxic debt deal with GSC is ludicrous - they have no risk, other than potential loss of control - but no financial exposure at all. The deal structured with GSC simply removes Mad J. and The Lemon from voting control, in the event that a default on the GSC toxic loan occurs.
The latter have a conversion feature, such that under certain conditions, primarily triggered by change of control, will convert on a 1-for-1 basis to Class A common such that they can be sold on the market once they meet registration and/or Rule 144 holding requirements.
The Class B shares have no monetary value, because they are illiquid, i.e. can’t be traded. Their primarily use is to allow Mad J. and The Lemon to retain control over MMEX, as the Class B shares have a 10X voting preference. Combined with certain features of Nevada law (Nevada is a non-recourse state), the 10X voting preference insures that no matter how many Class A shares exist, the Class B can always outvote the Class A common, thus allowing Mad J. and The Lemon to retain decision-making control over the company. This is a common scheme and structure in all sub-penny share-selling scams executed on the OTC.
Additionally, the Class B common shares were created from thin air (like all MMEX common stock), but even thinner than the Class A common - in this case, the 2-billion Class B common shares were used by Mad J. in the control-retention scheme - 1.5-billion of the Class B shares were “awarded” to Maple Resources, in return for “rights” to the “intellectual property” associated with the “refinery project.”
Translated for the MMEX STRONG, Mad J., on the left-hand at Maple, “sold” to Mad J., on the right-hand at MMEX, the “refinery project” for 1.5-billion shares of MMEX’s Class B common stock.
This transaction, in normal corporate finance would have required independent valuation, and certain other requirements, to prevent self-dealing. Unfortunately for MMEX retail “investors,” there is no corporate governance at MMEX, no independent directors on its board, and no valuation was ever conducted.
The notion that Mad J. and The Lemon “backed,” or have any financial exposure in the most recent $600K toxic debt deal with GSC is ludicrous - they have no risk, other than potential loss of control - but no financial exposure at all. The deal structured with GSC simply removes Mad J. and The Lemon from voting control, in the event that a default on the GSC toxic loan occurs.
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