It is very likely that there were a very signifficant number of shares given to promoters. The number, on a percentage basis, could have constituted an abuse of the S-8 guidelines.
Since Morgan could obviously not issue more shares in a secondary, undoubtedly because the prospectus would look like a piece of dogmeat, his only recourse might have been to issue more shares in a merger to escape SEC scrutiny. This is just speculation, but I'd bet my 100 shares on it.
The merger also allows the company to delay the financials a lot longer feigning audits and other merger requirements. This is not good for shareholders.
The transfer agent's resignation, according to Riley, was because they were not an AMEX certified TA. I will find out for sure, but this sounds like a lot of baloney to me.
The lawsuit brings up many important legal points. I have seen some of the other accounting anomolies. Let's face it, it's a dog. They weren't even licensed to do business in Florida until last week. Now many have said this was because Olympus Mills was there. But the company then, would not have had to bother at all. Next they'll tell us it was because of the pending merger.
The fact that the shareholders are going to have this merger rammed down their throats, without seeing who RMCW really is and what kind of shape the company is in, is ludicrous. I've sen this kind of thing occur in a lot of scams before.
And now we have Riley convincing Newbies to bet the farm. Who's kidding who?
Be very, very, careful. |
