There are three or more such deals with AJW and La Jolla. There are two or more deals with individuals resulting in the same commitments. Loan totals are over $3,500,000, and there could be more. All stock, original positions and subsequent payments, are subject to 50% discounts to current share prices. Interest and lack of share price performance are payable on a monthly basis under the same discount and fully convertible. Put options and warrants are availble thereof when called by the company or other conditions arise. Some payments are calculated on the share price of $.025. As you can see, these payments can be very pricey.
So, there is at least $3,500,000 of stock sold at a 50% discount. In hand, that pipes to at least $7,000,000 of stock. How many shares is that? Each loan has a three year term with monthly payments and stock nonperformance penalties with warrants and put options attached.
Outstanding and authorized share counts have increased (at least) 50%, which means shareholder equity has decreased by (at least) 50%. I figured monthly installments to total, on average, a little less than 1% a month for three years, provided no further loans or penalties increase or equity dilutes. Do the math. SFNN will have to increase authorized shares or reverse split just to pay the loans and nothing else.
The loan portfolio is floor planned. The money is not theirs. The portfolio turns over every 15 to 25 days. Their real business is being a loan originator/finder. They have little or nothing in assets. The financial reports use a method approved for banking applications. We already know you are not an accountant. These specific accounting techniques are far from what other industries use. Things look sweet when they are not.
Add SFNN amotorizes goodwill, which they should, but in what fair amounts? For how long? The same with acquired debt.
Hocus pocus. SFNN is practically nothing. The world finally looks and realizes the truth when things finally don't smell right and the result is what you see now in combination with AJW, La Jolla, and two other financiers.
Consider $7,000,000 of stock that can be shorted. Consider most of these financiers are abroad and can naked short if their hearts desire. Consider monthly increases in these positions totaling 1% of all company equity. It is a snowball increasing in size on a daily basis. Shareholders are in for a long screw. Share prices will flex, but the general result for years to come is decreasing shareholder equity.
One IHub poster who has a fine reputation and called a liar there (like me) estimated the end result as selling the company by more than three times its worth. How can that be? By selling stock that does not exist. Get the idea? |
