Notice of Conversion for 3(a)10

Question

I am trying to figure out what this means.

Is this good or bad?

http://markets.businessinsider.com/news/stocks/metrospaces-announces-that-it-will-not-honor-notice-of-conversion-for-3-a-10-due-to-potential-fraud-against-the-company-1018537763

Also i am not sure if that is related to this:

https://globenewswire.com/news-release/2018/03/05/1414775/0/en/Metrospaces-Announces-Cancellation-of-1-6-Billion-of-Common-Shares.html

Answer 1

https://repository.law.umich.edu/cgi/viewcontent.cgi%3Farticle%3D1039%26context%3Dmbelr&ved=2ahUKEwij0PLeqvHZAhWIOY8KHXDDCw4QFjAAegQICRAB&usg=AOvVaw11TuXOchMvsHK2Dzm3iHz1

The Section 3(a)(10) exemption of the Securities Act of 1933 is meant to exempt securities transactions where a fairness hearing by a judge or government agency’s ruling replaces the usual SEC registration require- ments. Recently, there has been a rise in 3(a)(10) financing schemes, where a third party investor, what I call a “3(a)(10) financier,” will offer to purchase the outstanding debts of a company from its creditors in exchange for discounted, and unregistered, shares of stock. In many cases these ex- changes are done with no notification to current shareholders whose value falls precipitously when the 3(a)(10) financier begins not only selling, but through a common clause in these 3(a)(10) financing contracts, also de- manding that the company issue more shares to them at any time. The companies who work with 3(a)(10) financiers have, in some cases, become complicit in the scheme in order to hide these transactions from investors who provide the liquidity for the 3(a)(10) financier sell-offs

Whether it is good or bad, only time will tell. There will be litigation and may take a while to settle.