Last week, the Securities and Exchange Commission announced charges against four individuals and related businesses for their roles in two microcap frauds and unlawful securities offerings. In sum, the alleged illegal transactions resulted in proceeds of more than $25 million. According to the SEC’s complaint, from approximately December 2012 to June 2013, microcap stock financier Magna Group, which was founded
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In a recent guest post, Mark R. Basile, Esq. shared a post titled “Let’s Make A Deal! – A Message to Convertible Note Holders And MicroCap CEOs.” In the post, Basile discussed how it is becoming increasingly difficult to clear stock in microcap companies, especially if that stock was part of a note conversion. So, what can you do if
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Guest Post By Mark R. Basile, Esq. Turns out that Friday the 13th is also unlucky for toxic convertible note-holders! I have been warning the toxic convertible note industry that there was going to be a reckoning with regard to how they lend money to microcap OTC Markets companies, and now, it seems that the chickens are coming home to roost.
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Guest Post By: Jason Paltrowitz Building a Sustainable Public Company with Longer-Term Investors Much attention has focused on recent Reg A deals (Arcimoto, Shiftpixy, Chicken Soup for the Soul Entertainment, Myomo and Adomani) that have listed on national exchanges (Nasdaq and NYSE). But the question remains, is this the right move for small-caps seeking to become public companies through innovative capital
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Guest Post By: Mike Starkweather The term toxic debt gets tossed around regularly in the micro-cap space, and yet most people don’t understand what it means or why a CEO would accept a loan with such volatile terms. First, it is important to understand what the term toxic debt indicates before we can break down how debt becomes toxic and why
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Today, two New York law firms, The Basile Law Firm P.C. and Phillipson & Uretsky, LLP announced that they have opened an investigation into a potential class action lawsuit against New York based lenders of short-term loans to microcap companies trading on the OTC Market. The class action being investigated and considered is on behalf of OTC Market public microcap
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In a recent post on LinkedIn, Tom Allinder discussed “Why an Alternative to Litigation is better for Lenders and Funders.” Allinder says the primary reason a funder should choose restructuring over litigation is because, through a restructure, funders have a much greater chance of receiving a return of capital (and a profit). For direct microcap investors, Allinder says restructures are
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Guest Post By: Mark R. Basile, Esq. There are many forms of terrorism in this world playing out right before us and we are all somewhat familiar with the political form, but what about the economic form. While there is no one specific definition of terrorism as applied to business, I have seen many companies fall victim to what I call
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Critical Questions MicroCap Issuers Should Ask Regarding Irrevocable Transfer Agent Instruction Letters
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OTC Markets Group and IR Magazine have teamed up to produce a white paper series on small/micro-cap investor relations. In their third white paper they explore the the pros and cons of four popular microcap financing methods. In this report, OTC Markets examines the pros and cons of common debt and equity financing methods used by microcap companies: – Regulation D Offering
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