I sure hope that the company doesn't give up on this. I have read every single filing and I firmly believe that the company has a really good case. If the law firm senses that it could be a toss-up as to which way it's going to go, I believe they would be foolish to take a chance. They have more to lose than to gain. My guess is that they will settle.
The following is a link to the initial letter that Mr. Lonergan sent to Mr. Ross and his law firm.
https://www.sec.gov/Archives/edgar/data/14319...ex99-1.htm
The following statements in the letter highlight the issues and adverse impact that a bad agreement has, especially when timelines are not met.
• Not once prior to the filing, however, did you make OWCP’s principals aware at the draconian default feature of the Note’s conversion provisions.
• Neither did any attorney at Sichenzia Ross advise or counsel any of OWCP’s principals about the disastrous effects a default under the Note would have for OWCP, or the windfall conversion rights that would be enjoyed by the Note holder in the event twice as many shares were issued on default.
• No disclosure was ever made by you or any attorney at Sichenzia Ross to OWCP that the convertible Note was in imminent default nor did your firm include any disclosure in the Form S-1 filed on June 16, 2016 of the material fact that any conversion of the $37,500 note after June 16, 2016 would result in the issuance of 100% more shares of OWCP because of the default on the Note by the close of business on June 16, 2016.
• On September 1, 2016, after massive pressure from Kodiak's representative, Jim Fitzpatrick, OWCP consented to the sale of the Note to Nations Advisory Partners Ltd.
• OWCP’s principals were then shocked when, on or about September 16, 2016, Nations informed OWCP that it was electing to convert the Note at a 75% share price discount, rather than the original 50% share price discount, because Nations declared that the Note had been in default since June 16, 2016. The biggest surprise for OWCP’s principals then came when they discovered that the default required OWCP to eventually issue an additional sixteen million eight hundred and fifty-one thousand and fifteen (16,851,015) OWCP shares, for a total of 33,702,031 shares, to Nations, which were immediately tradeable due to Rule 144 tacking benefits enjoyed by Nations as assignee of the Kodiak Note under Rule 144
• OWCP’s CFO, Mr. Shmuel De-Saban, wrote to you and attorney Even-Shosan in a panic on September 20, 2016 seeking an explanation for this disastrous turn of events, but never received the courtesy of a reply from Sichenzia Ross, a further material breach of your attorney-client duties and obligations.
• Had the attorneys at Sichenzia Ross properly advised OWCP’s principals on or before May 5, 2016 of the effects of the withdrawal of the S-1 on the existing Note, OWCP would have evaluated the possible consequences of default and might have repaid the Note prior to default. Instead, OWCP’s principals were erroneously led to believe and understand that they could repay the Note from the EPA. OWCP was never made aware that the Note remained convertible on default to such an enormous amount of OWCP shares, literally double the number of shares that would have been issued on or before June 16, 2016.
• because of the default under the Note, OWCP was forced to issue over 33 million shares to Kodiak’s assignee, Nations, for no consideration at all.
• Based upon the foregoing, we believe that OWCP incurred damages in excess of $2,000,000.00 by the material acts and omissions on the part of you and your firm, in utter disregard for your fiduciary obligations as OWCP’s counsel.
• 33,700,000 shares of OWCP stock flooded the market in September 2016.
The cruel irony in all of this is that the toxic loan with Discovery, should have raised similar concerns with possible triggering events. When advising clients, it is my opinion that lawyers have a legal responsibility to explain to their clients the possible severe implications of certain events. I firmly believe that is the difference between acting in the best interests of your clients, and having no regard for anybody’s interests other than your own. Or it could also be the difference between competence and incompetence!
The following is a link to the initial letter that Mr. Lonergan sent to Mr. Ross and his law firm.
https://www.sec.gov/Archives/edgar/data/14319...ex99-1.htm
The following statements in the letter highlight the issues and adverse impact that a bad agreement has, especially when timelines are not met.
• Not once prior to the filing, however, did you make OWCP’s principals aware at the draconian default feature of the Note’s conversion provisions.
• Neither did any attorney at Sichenzia Ross advise or counsel any of OWCP’s principals about the disastrous effects a default under the Note would have for OWCP, or the windfall conversion rights that would be enjoyed by the Note holder in the event twice as many shares were issued on default.
• No disclosure was ever made by you or any attorney at Sichenzia Ross to OWCP that the convertible Note was in imminent default nor did your firm include any disclosure in the Form S-1 filed on June 16, 2016 of the material fact that any conversion of the $37,500 note after June 16, 2016 would result in the issuance of 100% more shares of OWCP because of the default on the Note by the close of business on June 16, 2016.
• On September 1, 2016, after massive pressure from Kodiak's representative, Jim Fitzpatrick, OWCP consented to the sale of the Note to Nations Advisory Partners Ltd.
• OWCP’s principals were then shocked when, on or about September 16, 2016, Nations informed OWCP that it was electing to convert the Note at a 75% share price discount, rather than the original 50% share price discount, because Nations declared that the Note had been in default since June 16, 2016. The biggest surprise for OWCP’s principals then came when they discovered that the default required OWCP to eventually issue an additional sixteen million eight hundred and fifty-one thousand and fifteen (16,851,015) OWCP shares, for a total of 33,702,031 shares, to Nations, which were immediately tradeable due to Rule 144 tacking benefits enjoyed by Nations as assignee of the Kodiak Note under Rule 144
• OWCP’s CFO, Mr. Shmuel De-Saban, wrote to you and attorney Even-Shosan in a panic on September 20, 2016 seeking an explanation for this disastrous turn of events, but never received the courtesy of a reply from Sichenzia Ross, a further material breach of your attorney-client duties and obligations.
• Had the attorneys at Sichenzia Ross properly advised OWCP’s principals on or before May 5, 2016 of the effects of the withdrawal of the S-1 on the existing Note, OWCP would have evaluated the possible consequences of default and might have repaid the Note prior to default. Instead, OWCP’s principals were erroneously led to believe and understand that they could repay the Note from the EPA. OWCP was never made aware that the Note remained convertible on default to such an enormous amount of OWCP shares, literally double the number of shares that would have been issued on or before June 16, 2016.
• because of the default under the Note, OWCP was forced to issue over 33 million shares to Kodiak’s assignee, Nations, for no consideration at all.
• Based upon the foregoing, we believe that OWCP incurred damages in excess of $2,000,000.00 by the material acts and omissions on the part of you and your firm, in utter disregard for your fiduciary obligations as OWCP’s counsel.
• 33,700,000 shares of OWCP stock flooded the market in September 2016.
The cruel irony in all of this is that the toxic loan with Discovery, should have raised similar concerns with possible triggering events. When advising clients, it is my opinion that lawyers have a legal responsibility to explain to their clients the possible severe implications of certain events. I firmly believe that is the difference between acting in the best interests of your clients, and having no regard for anybody’s interests other than your own. Or it could also be the difference between competence and incompetence!
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