On April 5th 2019 VYST CEO Steven Rotman submitted
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Posted On: 10/28/2019 10:18:18 AM
On April 5th 2019 VYST CEO Steven Rotman submitted a court document, under oath, regarding the current state of affairs with Vystar corporation. It is a MUST READ! The content is below:
I, Steven Rotman, do hereby declare the truth of the foregoing under penalty of perjury pursuant to 28 U.S.C. §1746 as follows:
1. I am the chief executive officer of defendant Vystar Corporation. (“Vystar”). I submit this certification in support of Vystar’s opposition to Plaintiff’s motion for partial summary judgment on the first and third causes of action in the complaint (“Opposition”).
2. I am familiar with the facts and circumstances set forth herein based upon my own knowledge and a review of the company’s business records.
3. Vystar is a public company with its headquarters in Worcester, Massachusetts. Vystar stock is traded on the OTCMarkets Pink Exchange, trading under the symbol VYST. A penny stock, the daily volume of the shares traded in the stock from the last 30 days ranged from a low of approximately 6,000,000 shares per day to a high of approximately 52,000,000 shares per day.
4. Vystar is the exclusive creator of Vytex Natural Rubber Latex (NRL), a multi-patented, all-natural, raw material that contains significantly reduced levels of the proteins found in natural rubber latex and can be used in over 40,000 products, and the owner of RxAir™ UV light air purification products. Vytex NRL is a 100% renewable resource, environmentally safe, "green"and fully biodegradable. Vystar is working with manufacturers across a broad range of consumer and medical products bringing Vytex NRL to market in adhesives, gloves, balloons, condoms, other medical devices and natural rubber latex foam mattresses, toppers, and pillows.
The Underlying Agreements Between Vystar and Plaintiff
5. In or about January 2018, Vystar sought a relatively small amount of additional financing and, as a result of that desire to secure such financing, was introduced to Plaintiff. The relationship
between the parties emanates from two agreements drafted by Plaintiff. The first is a convertible note (“Note”). The Note documented a loan from Plaintiff to Vystar in the amount of $80,000, plus interest
on the unpaid principal balance at a rate of 12% per annum. Id. All payments due under the Note were to be paid “in lawful money of the United States of America”. This was a form agreement drafted by Plaintiff and provided to Vystar, with little room for negotiation. Annexed hereto as Exhibit 1 is a true copy of the Note.
6. The second agreement executed in the transaction was a securities purchase agreement (“SPA”). The SPA documented the purchase by Plaintiff of the Note and permitted the Plaintiff through the use of an irrevocable instruction to a transfer agent, to effectuate the conversion of the shares. This was a form agreement drafted by Plaintiff and provided to Vystar, with little room for negotiation. Annexed hereto as Exhibit 2 is a true copy of the SPA.
7. The SPA identified the amount that was to be loaned. It was not the $80,000 in the Note, but rather $75,500.
8. In terms of payment and closing date of the documents, the SPA states in paragraph 1(b):
b) Form of Payment. On the Closing Date (i) the Purchaser [Plaintiff] shall pay the Purchase Price by wire transfer immediately available funds to the Company [Vystar], in accordance with the Company’s written wiring instructions, simultaneously with the delivery of the Note, and (ii) the Company shall deliver such Note duly executed on behalf of the Company to the Purchaser, simultaneously with the delivery of the Purchase Price.
9. The loan amount to actually be received from Plaintiff was further reduced by $3,200: [o]n or prior to the Closing, the Company shall pay or reimburse to Purchaser a nonrefundable, non-accountable sum equal to $3,200 . . . the Purchaser may withhold and offset the balance of such amount from the payment of its Purchase Price otherwise payable hereunder at Closing, which offset shall constitute partial
payment of such Purchase Price in an amount equal to such offset.
Conversions Effectuated by Plaintiff
10. Vystar received $72,300 from Plaintiff. This amount was wired to Vystar on March 8, 2018. Annexed hereto as Exhibit 3 is a true copy of Vystar’s bank statement demonstrating the receipt of the March 8, 2018, wire from Plaintiff. No other monies were received from Plaintiff to Vystar.
11. The conversions of shares were effectuated through a simple process of Plaintiff providing the calculation of the conversion in a Notice of Conversion of the Conversion Amount (as defined in the Note) to Vystar. Because of the previously executed irrevocable transfer agreements in place through the agreements, each Notice of Conversion were provided to the transfer agents and thereafter and thereafter Plaintiff received the requisite amount of shares set forth each respective Notices of Conversion. Annexed hereto as Exhibit 4 are true copies of the irrevocable transfer instructions provided by Vystar pursuant to the SPA.
12. From September 11, 2018, through January 9, 2019, Plaintiff effectuated nine separate conversions. In the course of each of these conversions Vystar relied upon Plaintiff to effectuate the proper conversions pursuant to the Note Annexed hereto as Exhibit 5 are true copies of the 2018 Notices of Conversion sent from Plaintiff to Vystar. Annexed hereto as Exhibit 6 are true copies of records received by Vystar from the transfer agent effectuating each transfer of Vystar
stock pursuant to the conversions.
13. The loan was funded on March 8, 2018, the date interest would then accrue on the unpaid principal amount received by Vystar. The interest calculation must be readjusted in every instance that Plaintiff received shares equal to a portion of the balance taken through the Notices of Conversion.
14. As referenced above, the Notices of Conversion submitted by Plaintiff resulted in the immediate transfer of shares to Plaintiff. Deducting the purported legal and transfer fees of $8,485, Plaintiff received through the conversions Vystar shares equal to $85,287.
15. Vystar fully relied upon Plaintiff for its calculations of principal and interest deductions and accruals.
16. On January 15, 2019, Plaintiff sent in yet another Notice of Conversion. Vystar was surprised to receive the January 15, 2019, Notice of Conversion.
17. This notice called for a conversion of 20,545,511 shares, or payment in the amount of $4,662.74.
18. Shortly after the transmission of the January 15, 2019, Notice of Conversion, we took exception to the figures, and began the process of reviewing the prior transactions and creating its own analysis of the balance due on the Note (principal and interest). We realized that it had fully satisfied its obligations pursuant to the Note and SPA, and was concerned that, with the irrevocable transfer instructions, the transfer agent would unilaterally, as it was permitted by the instructions, transfer the twenty plus million shares to Plaintiff. To that end, Vystar changed transfer agents thereby rendering the instructions moot, protecting both it and its shareholders.
19. Vystar then informed Plaintiff that while it did not believe there was a balance due, to the extent there was a balance it would only be interest. To protect itself from any issues associated with potential default of the payment of interest, on January 30, 2019, Vystar wired Plaintiff $4,658, an amount equal to that set forth in the January 15, 2019, notice, together with $35 to cover the costs of the wire fee. This transmission of the money was in conformance with the terms of the Note that require such payment in “lawful money of the United States of America”. Annexed hereto as Exhibit 7 is a true copy of Vystar’s bank records showing the wire transaction.
20. On February 5, 2019, Plaintiff sent defendant yet another Notice of Conversion. However, this Notice of Conversion was a replacement of the January 15, 2019, conversion based upon Plaintiff’s mathematical error. Annexed hereto as Exhibit 8 is a true copy of the February 5, 2019, email from Plaintiff to Vystar that also carried with it the February 5, 2019, Notice of Conversion. After receipt of this email, Vystar informed Plaintiff that the conversion was nonetheless incorrect, that no monies were due under the Note or SPA.
Plaintiff’s Argument Of Vystar’s Demise Is Not Only Exaggerated, But False
21. Plaintiff cites to boiler plate filing language, more succinctly defined in the trade as a “going concern” qualification, is an accounting term and practice required by auditors for such public companies to assure protection against any litigation brought by investors in such a public company.
22. Indeed, Plaintiff was well aware of this language, as it was contained in the 2017 SEC Form 10-Q filed by Vystar months before the underlying transaction at issue in the case. Annexed hereto as Exhibit 9 is a true copy of the Form 10-Q Vystar filed with the SEC for the period ending September 20, 2017.
23. The 2017 Form 10-Q was filed in 2017, before the underlying agreements were negotiated, let alone the date of closing.
24. Vystar was and continues to be a viable and ongoing business. Where there is notable transactions involving the company, Vystar issues press releases. Recent transactions of acquisitions include Natures Home Solutions (NHS) and RXAIR, as well as two pending transactions, Fluid Energy Conversion (FEC) and Murida Inc., d/b/a Rotmans Furniture. Annexed hereto as Exhibit 10 is a true copy of the press releases issued from Vystar relating to these events, and the Court is respectfully referred to the Form 10-Q attached to Plaintiff’s filing under “Subsequent Events” that sets forth certain of these transactions.
25. In addition to being the chief executive officer of Vystar, I am also the chief executive officer of Murida, Inc. (“Murida”). Murida is a company generating at least thirty million dollars a year in revenues.
26. Additionally, Vystar refers the Court to the Form 10Q attached to Ms. Preston’s supporting declaration, Exhibit D. Specifically, Note 12 the Court will find that the Company increased the authorized shares of common stock to 975,000,000, providing more than ample stock to pay any corresponding obligation payable in shares. (bearing the designation of page 25 of 39 by the Court filing system)
27. From an ongoing business viability, the Court will see, specifically point 8 of the same Note 12 on the Form 10Q, that Vystar is in the process of acquiring between 58% and 100% of the assets of Murida Furniture Company, Inc. Point 9 further identifies Vystar is in the process of acquiring the assets of Fluid Conversion for $100,000.
28. Plaintiff’s arguments that Vystar is insolvent and cannot pay its debt is also false. Vystar has recently paid off all of its debt as to third party corporate convertible notes (non-insider), specifically paying off two loans from Peak One and Powerup Lending Group, Ltd. Annexed hereto as Exhibit 11 are press releases issued by Vystar regarding each transaction and annexed hereto as Exhibit 12 are true copies of Vystar’s transactional documents and bank records demonstrating the payment for each of the two loans.
29. Additionally, two companies have recently invested $200,000 each in Vystar. Annexed hereto as Exhibit 12 is a true copies of the Memorandum of Understanding of the transaction, the Vystar corporate issuance resolution and bank record of Vystar demonstrating the $197,500 wire received from FirstFire Global. A similar investment in the amount of $97,500 was consummated with Crown Bridge Partners. Annexed hereto as Exhibit 12 is a true copy of a bank statement from Vystar demonstrating the deposit of investment funds into Vystar’s bank account from FirstFire Global and Crown Bridge Partner.
30. Last on this point, Plaintiff ignores the October 2018 legal opinion of its own counsel concerning Vystar’s financial wherewithal, in which its attorney, after reviewing figures similar to that in the targeted 10Q, stated “The Company’s financial statements are consistent with an operating business.”. Annexed hereto as Exhibit 14 is a true copy of the October 18, 2018, letter from Plaintiff’s counsel, Legal & Compliance, LLC, to the transfer agent, Island Stock Transfer.
31. There are presently more than 415 record holders of Vystar shares. What Plaintiff is seeking through this application would dilute the value of the present shares, having a disastrous effect on all record holders as well as Vystar.
32. At no time in the course of the nine conversions did Plaintiff charge default interest against the loan or indicate to Vystar that any default interest was to apply. For the reasons set forth herein, in conjunction with the supporting memorandum of law, Vystar respectfully requests the motion filed by Plaintiff be denied in full.
Dated: April 5, 2019
Worcester, MA
Steven Rotman
I, Steven Rotman, do hereby declare the truth of the foregoing under penalty of perjury pursuant to 28 U.S.C. §1746 as follows:
1. I am the chief executive officer of defendant Vystar Corporation. (“Vystar”). I submit this certification in support of Vystar’s opposition to Plaintiff’s motion for partial summary judgment on the first and third causes of action in the complaint (“Opposition”).
2. I am familiar with the facts and circumstances set forth herein based upon my own knowledge and a review of the company’s business records.
3. Vystar is a public company with its headquarters in Worcester, Massachusetts. Vystar stock is traded on the OTCMarkets Pink Exchange, trading under the symbol VYST. A penny stock, the daily volume of the shares traded in the stock from the last 30 days ranged from a low of approximately 6,000,000 shares per day to a high of approximately 52,000,000 shares per day.
4. Vystar is the exclusive creator of Vytex Natural Rubber Latex (NRL), a multi-patented, all-natural, raw material that contains significantly reduced levels of the proteins found in natural rubber latex and can be used in over 40,000 products, and the owner of RxAir™ UV light air purification products. Vytex NRL is a 100% renewable resource, environmentally safe, "green"and fully biodegradable. Vystar is working with manufacturers across a broad range of consumer and medical products bringing Vytex NRL to market in adhesives, gloves, balloons, condoms, other medical devices and natural rubber latex foam mattresses, toppers, and pillows.
The Underlying Agreements Between Vystar and Plaintiff
5. In or about January 2018, Vystar sought a relatively small amount of additional financing and, as a result of that desire to secure such financing, was introduced to Plaintiff. The relationship
between the parties emanates from two agreements drafted by Plaintiff. The first is a convertible note (“Note”). The Note documented a loan from Plaintiff to Vystar in the amount of $80,000, plus interest
on the unpaid principal balance at a rate of 12% per annum. Id. All payments due under the Note were to be paid “in lawful money of the United States of America”. This was a form agreement drafted by Plaintiff and provided to Vystar, with little room for negotiation. Annexed hereto as Exhibit 1 is a true copy of the Note.
6. The second agreement executed in the transaction was a securities purchase agreement (“SPA”). The SPA documented the purchase by Plaintiff of the Note and permitted the Plaintiff through the use of an irrevocable instruction to a transfer agent, to effectuate the conversion of the shares. This was a form agreement drafted by Plaintiff and provided to Vystar, with little room for negotiation. Annexed hereto as Exhibit 2 is a true copy of the SPA.
7. The SPA identified the amount that was to be loaned. It was not the $80,000 in the Note, but rather $75,500.
8. In terms of payment and closing date of the documents, the SPA states in paragraph 1(b):
b) Form of Payment. On the Closing Date (i) the Purchaser [Plaintiff] shall pay the Purchase Price by wire transfer immediately available funds to the Company [Vystar], in accordance with the Company’s written wiring instructions, simultaneously with the delivery of the Note, and (ii) the Company shall deliver such Note duly executed on behalf of the Company to the Purchaser, simultaneously with the delivery of the Purchase Price.
9. The loan amount to actually be received from Plaintiff was further reduced by $3,200: [o]n or prior to the Closing, the Company shall pay or reimburse to Purchaser a nonrefundable, non-accountable sum equal to $3,200 . . . the Purchaser may withhold and offset the balance of such amount from the payment of its Purchase Price otherwise payable hereunder at Closing, which offset shall constitute partial
payment of such Purchase Price in an amount equal to such offset.
Conversions Effectuated by Plaintiff
10. Vystar received $72,300 from Plaintiff. This amount was wired to Vystar on March 8, 2018. Annexed hereto as Exhibit 3 is a true copy of Vystar’s bank statement demonstrating the receipt of the March 8, 2018, wire from Plaintiff. No other monies were received from Plaintiff to Vystar.
11. The conversions of shares were effectuated through a simple process of Plaintiff providing the calculation of the conversion in a Notice of Conversion of the Conversion Amount (as defined in the Note) to Vystar. Because of the previously executed irrevocable transfer agreements in place through the agreements, each Notice of Conversion were provided to the transfer agents and thereafter and thereafter Plaintiff received the requisite amount of shares set forth each respective Notices of Conversion. Annexed hereto as Exhibit 4 are true copies of the irrevocable transfer instructions provided by Vystar pursuant to the SPA.
12. From September 11, 2018, through January 9, 2019, Plaintiff effectuated nine separate conversions. In the course of each of these conversions Vystar relied upon Plaintiff to effectuate the proper conversions pursuant to the Note Annexed hereto as Exhibit 5 are true copies of the 2018 Notices of Conversion sent from Plaintiff to Vystar. Annexed hereto as Exhibit 6 are true copies of records received by Vystar from the transfer agent effectuating each transfer of Vystar
stock pursuant to the conversions.
13. The loan was funded on March 8, 2018, the date interest would then accrue on the unpaid principal amount received by Vystar. The interest calculation must be readjusted in every instance that Plaintiff received shares equal to a portion of the balance taken through the Notices of Conversion.
14. As referenced above, the Notices of Conversion submitted by Plaintiff resulted in the immediate transfer of shares to Plaintiff. Deducting the purported legal and transfer fees of $8,485, Plaintiff received through the conversions Vystar shares equal to $85,287.
15. Vystar fully relied upon Plaintiff for its calculations of principal and interest deductions and accruals.
16. On January 15, 2019, Plaintiff sent in yet another Notice of Conversion. Vystar was surprised to receive the January 15, 2019, Notice of Conversion.
17. This notice called for a conversion of 20,545,511 shares, or payment in the amount of $4,662.74.
18. Shortly after the transmission of the January 15, 2019, Notice of Conversion, we took exception to the figures, and began the process of reviewing the prior transactions and creating its own analysis of the balance due on the Note (principal and interest). We realized that it had fully satisfied its obligations pursuant to the Note and SPA, and was concerned that, with the irrevocable transfer instructions, the transfer agent would unilaterally, as it was permitted by the instructions, transfer the twenty plus million shares to Plaintiff. To that end, Vystar changed transfer agents thereby rendering the instructions moot, protecting both it and its shareholders.
19. Vystar then informed Plaintiff that while it did not believe there was a balance due, to the extent there was a balance it would only be interest. To protect itself from any issues associated with potential default of the payment of interest, on January 30, 2019, Vystar wired Plaintiff $4,658, an amount equal to that set forth in the January 15, 2019, notice, together with $35 to cover the costs of the wire fee. This transmission of the money was in conformance with the terms of the Note that require such payment in “lawful money of the United States of America”. Annexed hereto as Exhibit 7 is a true copy of Vystar’s bank records showing the wire transaction.
20. On February 5, 2019, Plaintiff sent defendant yet another Notice of Conversion. However, this Notice of Conversion was a replacement of the January 15, 2019, conversion based upon Plaintiff’s mathematical error. Annexed hereto as Exhibit 8 is a true copy of the February 5, 2019, email from Plaintiff to Vystar that also carried with it the February 5, 2019, Notice of Conversion. After receipt of this email, Vystar informed Plaintiff that the conversion was nonetheless incorrect, that no monies were due under the Note or SPA.
Plaintiff’s Argument Of Vystar’s Demise Is Not Only Exaggerated, But False
21. Plaintiff cites to boiler plate filing language, more succinctly defined in the trade as a “going concern” qualification, is an accounting term and practice required by auditors for such public companies to assure protection against any litigation brought by investors in such a public company.
22. Indeed, Plaintiff was well aware of this language, as it was contained in the 2017 SEC Form 10-Q filed by Vystar months before the underlying transaction at issue in the case. Annexed hereto as Exhibit 9 is a true copy of the Form 10-Q Vystar filed with the SEC for the period ending September 20, 2017.
23. The 2017 Form 10-Q was filed in 2017, before the underlying agreements were negotiated, let alone the date of closing.
24. Vystar was and continues to be a viable and ongoing business. Where there is notable transactions involving the company, Vystar issues press releases. Recent transactions of acquisitions include Natures Home Solutions (NHS) and RXAIR, as well as two pending transactions, Fluid Energy Conversion (FEC) and Murida Inc., d/b/a Rotmans Furniture. Annexed hereto as Exhibit 10 is a true copy of the press releases issued from Vystar relating to these events, and the Court is respectfully referred to the Form 10-Q attached to Plaintiff’s filing under “Subsequent Events” that sets forth certain of these transactions.
25. In addition to being the chief executive officer of Vystar, I am also the chief executive officer of Murida, Inc. (“Murida”). Murida is a company generating at least thirty million dollars a year in revenues.
26. Additionally, Vystar refers the Court to the Form 10Q attached to Ms. Preston’s supporting declaration, Exhibit D. Specifically, Note 12 the Court will find that the Company increased the authorized shares of common stock to 975,000,000, providing more than ample stock to pay any corresponding obligation payable in shares. (bearing the designation of page 25 of 39 by the Court filing system)
27. From an ongoing business viability, the Court will see, specifically point 8 of the same Note 12 on the Form 10Q, that Vystar is in the process of acquiring between 58% and 100% of the assets of Murida Furniture Company, Inc. Point 9 further identifies Vystar is in the process of acquiring the assets of Fluid Conversion for $100,000.
28. Plaintiff’s arguments that Vystar is insolvent and cannot pay its debt is also false. Vystar has recently paid off all of its debt as to third party corporate convertible notes (non-insider), specifically paying off two loans from Peak One and Powerup Lending Group, Ltd. Annexed hereto as Exhibit 11 are press releases issued by Vystar regarding each transaction and annexed hereto as Exhibit 12 are true copies of Vystar’s transactional documents and bank records demonstrating the payment for each of the two loans.
29. Additionally, two companies have recently invested $200,000 each in Vystar. Annexed hereto as Exhibit 12 is a true copies of the Memorandum of Understanding of the transaction, the Vystar corporate issuance resolution and bank record of Vystar demonstrating the $197,500 wire received from FirstFire Global. A similar investment in the amount of $97,500 was consummated with Crown Bridge Partners. Annexed hereto as Exhibit 12 is a true copy of a bank statement from Vystar demonstrating the deposit of investment funds into Vystar’s bank account from FirstFire Global and Crown Bridge Partner.
30. Last on this point, Plaintiff ignores the October 2018 legal opinion of its own counsel concerning Vystar’s financial wherewithal, in which its attorney, after reviewing figures similar to that in the targeted 10Q, stated “The Company’s financial statements are consistent with an operating business.”. Annexed hereto as Exhibit 14 is a true copy of the October 18, 2018, letter from Plaintiff’s counsel, Legal & Compliance, LLC, to the transfer agent, Island Stock Transfer.
31. There are presently more than 415 record holders of Vystar shares. What Plaintiff is seeking through this application would dilute the value of the present shares, having a disastrous effect on all record holders as well as Vystar.
32. At no time in the course of the nine conversions did Plaintiff charge default interest against the loan or indicate to Vystar that any default interest was to apply. For the reasons set forth herein, in conjunction with the supporting memorandum of law, Vystar respectfully requests the motion filed by Plaintiff be denied in full.
Dated: April 5, 2019
Worcester, MA
Steven Rotman
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My comments are only my opinion and are not to be used for investment advice.
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