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Microcap & Penny Stocks : PLNI - Game Over -- Ignore unavailable to you. Want to Upgrade?

To: Captain James T. Kirk who wrote (1549)	1/22/2006 9:57:51 AM
From: Jeffrey S. Mitchell	Read Replies (1) \| Respond to of 12518

JTK, it took me a while, but I finally checked out your lead about Sure Trace (SSTY). It should help explain and reinforce what theWorm06 and I have been surmising the "pending SEC approval" wording is intended to convey. First off, we know from PLNI press releases they are financing their acquisitions using a "privately financed cash transaction" [1]. The overwhelmingly most common method of choice for such is a PIPE deal (i.e. convertible debentures). "PIPE transactions are privately issued equity or equity-linked securities that are sold to accredited investors under Regulation D by public companies... the benefits a potential issuer may consider when evaluating a PIPE transaction: Does not require SEC registration prior to offering" [2]. In other words, there are ways you can do the financing without telling the public (read: shareholders) if you prefer (e.g. a Rule 504 exemption). But at some point you need to register these shares (e.g. via a Form D) with the SEC so that the PIPE issuer can legally sell them. The SEC must approve the filing. Hence, the likely meaning of "pending SEC approval." The tell-tale sign of PIPE deals is what is now commonly, but not appropriately, known as naked shorting (I prefer to call it leveraged shorting). Why? To lock in one's profit immediately since PIPE offerings usually require a holding period before conversion. Common sense would dictate that if you are going to buy a big chunk of stock from a company that you get it at a deep discount. By shorting against it immediately you lock in this discount, not to mention drive the price down; the lower the price per share, the more stock you get for each dollar you spent on a debenture. The recent steady downward pressure and the surge up on news and paid tout reports is a tell-tale sign of a PIPE deal in my experience. As I just wrote, by the time you find out about them, it's usually too late. Bottom line is, if you have convinced yourself PLNI is being shorted into the ground, look to the company for the truth about any financing they might have done. As pertains to SSTY: On April 23, 2004, they announced they had "arranged an USD ($) 8 million financing from Cornell Capital Partners LLC... subject to SEC approval." [3]. On May 17, 2004, somehow this $8M got whittled all the way down to $150K [4], but the 10Q makes it clear this was not the SEC's doing. Rather, the stipulation was that most of the money being borrowed would only be transferred once the SEC registration took place. [1] primezone.com [2] hlhz.com [3] The new Board of Directors has been actively searching for external financial inflow that would support our short term goals. The first step in search of external capital has been successful and the Company has arranged an USD ($) 8 million financing from Cornell Capital Partners LLC of New Jersey, U.S.A. (This financing is subject to SEC approval.) w5d2.ccnmatthews.com [4] On April 23, 2004 the Company and Cornell Capital Partners, LP had executed term sheets detailing $350,000 in convertible debt securities and a firm commitment of $8,000,000 in equity financing which is subject to registration with the Securities and Exchange Commission. On May 17, 2004, definitive agreements for both the convertible debt financing and the equity financing were signed by the parties. The terms of these agreements provides that a payment of $150,000 to the Company will be made within two (2) business days of the execution thereof; a payment of $100,000 upon the filing by the Company of a registration statement to register the securities to be issued to Cornell Capital; and $100,000 upon the registration statement being deemed effective. sec.gov [5] On August 3, the Commission announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934, of over-the-counter trading of the securities of Sure Trace Security Corporation (stock symbol SSTY), a Canadian corporation with principal offices in Vancouver, Canada, at 9:30 a.m. EDT on August 3, 2005, and terminating at 11:59 p.m. EDT on August 16, 2005. sec.gov - Jeff