Algae Dynamics (ADYNF) Announces Death Spiral Financing by Chapter 7

Bankrupt NY Blinds Dealer

Since 2013, NoHedge has assisted investors to navigate U.S. Traded Canadian
company space (OTCBB) that has proven to be full of companies actively engaged in
deceiving investors. As investors read our expos on Algae Dynamics (formerly
Carbon Converted Technologies) today they need to realize that our due diligence
process employed similar tools, such as background checks, court records,
transcripts, and SEDAR and EDGAR filing analysis that led to the halt and trading of
numerous frauds. Today's report on Algae Dynamics combines these approaches
and allows us to make our strongest impact of fraud to date: limit public investor
losses. The choice investors are left to make is very simple: Do I buy Algae
Dynamics and wait for the rhetoric that its management and its fee collectors will
spout or do I sell out prior to what we believe is the inevitable bankruptcy, trusting
in our due diligence and track record? The choice is yours and yours alone to make.
We have made ours.
Three months ago we released an expos about Algae Dynamics, a Canadian
company looking to go public in the United States. These reports can be viewed by
clicking on either Algae Dynamics: A Questionable IPO , Algae Dynamics: IPO
Update from Bad to Worse , Algae Dynamics Litigation and Investigations. Today's
update on Algae Dynamics is based on a death-spiral financing announcement and
an S1 recently filed with numerous material omissions.
Summary

Algae Dynamics arranges death-spiral financing in September 2015

RY Capital Group to supposedly finance up to $750,000 but didnt exist a
month ago.
RY Capital Group, LLC didnt exist on September 2, 2015 for the 8k
financing.
RY Capital Group launched a basic website after the 8k but before the press
release.
RY Capital Group Managing Partner and controlling owner (from S1) is Ronan
Yamin
The up to $750,000 in financing is coming from Ronan Yamin, a 2011
individual Chapter 7 Bankrupt NY blinds dealer, with an average income of
$24,000 per year at its peak.
RY Capital Group cant get their temporary address correct in SEC filings
Algae Dynamics files S1 statement to register 800,000+ shares owned by the
founders of Algae Dynamics & up to 1.5 million shares of RY Capital Group
In the S1, Algae Dynamics confirms no operations, $3000 in cash, and $2
million in losses.
Two founders of Algae Dynamics, Paul Ramsay and Richard Rusiniak, are
former Cymat founders totaling $13 million in losses.

The seed money financer and founder of Algae Dynamics, Sandra Elsley,
stands to sell shares through nominee S1 IPO shareholders in Ontario.
Algae Dynamics Corp is being investigated by numerous securities regulators
for illegally raising capital in Ontario, Canada from unaccredited,
unsophisticated investors, as well as numerous securities laws violations
relating to offering documents and cold-call selling of the IPO stock.
For detailed information on the founders please see our past 3 reports:
Algae Dynamics: A Questionable IPO
Algae Dynamics: IPO Update from Bad to Worse
Algae Dynamics Litigation and Investigations

Algae Dynamics released two 8ks and a PR that the company now had up to
$750,000 in death spiral financing by RY Capital Group. The filings are Sept 10. filing
and Sept. 3 filing.

RY Capital Group
Claims to be at 3 different addresses in 8ks and cant seem to figure out whether
they are a NY or NJ company:
https://www.sec.gov/Archives/edgar/data/1607679/000135448815004244/adc_ex10
1.htm
RY Capital Group, LLC, a New Jersey Limited Liability Company, with its address at 3500
Route 66, Suite 114, Neptune, NJ 07753
Under the signature of this document the address points to a different suite:

RY CAPITAL GROUP, LLC 3500 Route 66, Suite 113 Neptune, NJ 07753
Then under:
https://www.sec.gov/Archives/edgar/data/1607679/000135448815004281/adc_ex10
2.htm RY CAPITAL GROUP, LLC, a New York Limited Liability Company
All agreements are executed by the Managing Partner, Yamin Ronen. The
rycapgroup.com domain was registered on August 11, 2015, just days before this
financing was announced. The simple website went live after the 8k was filed. RY
Capital Group, LLC didnt exist when the financing was executed on September 2,
2015. Maybe thats why the state and addresses are wrong in various 8k filings and
agreements.
RY Capital group was incorporated on September 3, 2015
http://florida.intercreditreport.com/company/ry-capital-group-llc-m15000007045

with its Managing Partner, Yamin Ronen in Ocala Florida. The Florida address leads
back to a small $80,000 condo.

Managing Partner Ronan Yamin

A newly formed RY Capital Group web site lists a cell phone and landline in its
contact information:
Shore Crossings ,3600 Route 66 - Suite 113 , Neptune, New Jersey 07753
917-856-3341 / 848-469-0210
info@rycapgroup.com
The cell phone traces back to NY City Blinds. http://www.bbb.org/new-yorkcity/business-reviews/venetian-blinds-dealers/new-york-blinds-in-new-york-ny101247/
The story ends there until you read the ONLY bankruptcy record in the entire
United States for a Ronan Yamin. Upon review, we verified we verified a positive
match and that Mr. Ronans past income maxed out at $24,000 per year.

In reviewing the Chapter 7 bankruptcy, we learned of Mr. Ronans most recent

business:

On page 6 of Mr. Ronans Chapter 7 bankruptcy filing, he lists NY City Blinds as his
business. So we have the right Ronan Yamin.
Mr. Ronans Chapter 7 bankruptcy In NY with minimal income was discharged after
mandatory credit counselling.

It is very unlikely a blinds dealer, with no prior securities experience, has

orchestrated this death-spiral financing. We will continue to search for the identity
of the individuals managing this penny stock finance pump-and-dump.

DEATH SPIRAL FINANCING

From the 8kd agreements: The Holder of this Note is entitled, at its option after 6
months, to convert all or any amount of the principal face amount of this Note then
outstanding into common shares of the Company's capital stock (the "Common
Shares") at a price ("Conversion Price") for each Common Share equal to 55% of the
lowest closing price of the Common Shares..
This means any money advanced by RY Capital Group can be converted to stock at
55% of the lowest closing price of the stock. So, if RY Capital Group or another
individual sells a bunch of stock over a few minutes to lower the price to a penny,
then they get the shares at less than a cent each. This is very common in these
convertible note financing deals. Usually the stock is accumulated over a few
months or so and then during the mid-afternoon one day the individual will sell all
the stock, immediately, pushing the stock price to a penny or less. In return, they
demand conversion of the note and get millions of shares. In most cases, the
company is then pumped and dumped with the stock promoters making all the
money. The shareholders have no idea what hit them. Due to the nature of
convertible debt, RY Capital Group shares are all free trading and sellable in the
open market after the debt is 6 months old.
A great story on Algae Dynamics-style financing is here:
http://www.bloomberg.com/news/articles/2015-03-12/josh-sason-made-millionsfrom-penny-stock-financing

IT GETS WORSE: Algae Dynamics Founders AND RY Capital

Group filed an S1 to register their shares for sale on open
market as free-trading stock
The latest S1 is filed here. Two of the founders, Paul Ramsay and Richard Rusiniak
both seek to sell over 400,000 shares each. RY Capital proposes to sell up to
$1.5 million shares, all to the detriment of common shareholders.
From the latest S1: The Company has also entered into a convertible promissory note
with RY (the Convertible Note). The Convertible Note matures on September 1, 2016 and
accrues interest at the rate of 12% per annum. The Convertible Note is convertible at any
time, in whole or in part, at RY's option into Common Shares of the Company's capital stock
at a variable conversion price equal to a 45% discount from the lowest trading price in the
twenty (20) trading days prior to the day that RY requests conversion. At no time will RY be
entitled to convert any portion of the Convertible Note to the extent that after such
conversion, RY (together with its affiliates) would beneficially own more than 9.99% of the
outstanding Common Shares.
On September 10, 2015, we entered into an Equity Purchase Agreement (the EPA) with RY
Capital Group, LLC, a New Jersey limited liability company (RY). Pursuant to the terms of
the EPA, RY is committed to purchase up to US$750,000 in Common Shares over a period of

up to twelve (12) months. From time to time during the twelve (12) month period
commencing from the effectiveness of the registration statement, we may deliver a
drawdown notice (Drawdown Notice) to RY which states the dollar amount that we intend
to sell to RY on a date specified in the drawdown notice (Drawdown Amount). The
maximum amount that the Company shall be entitled to drawdown to RY shall be the lesser
of US$62,500 and one hundred percent (100%) of the aggregate trading volume of the
Common Shares during the ten (10) days preceding the Drawdown Notice, so long as such
amount does not render the Investor a holder of more than 4.99% of the outstanding
Common Shares of the Company. The purchase price per share to be paid by RY shall be
calculated as a thirty-five percent (35%) discount to the lowest closing bid price of the
Companys Common Shares during the ten (10) consecutive trading days prior to the date
the Drawdown Notice was submitted.
The 4.99% and 9.99% are in the agreements to protect RY Group from having to report its
sales to the SEC. This language is specifically used so that the public is not aware of what is
going on behind the scenes.
The only people making money are the founders and RY Capital Group.
There are still no operations in Algae Dynamics, no pilot site, no equipment, no progress but
that shouldnt be of any surprise.

TROUBLING BACKGROUND OF THE FOUNDERS OF ALGAE DYNAMICS

(from left is Paul Ramsay, Sandra Elsley, and Richard Rusiniak)

Paul Ramsay, CEO and Chairman and Richard Rusiniak, Director
Management claims in their S1 that Paul Ramsay is "Co-founder and former CEO and VP
Business Development of Cymat Corp, (TSX: CYM) with a market valuation over $150 million
upon his resignation in 2002" and Mr Rusiniak's is similar.

Fact Check: Cymat Technologies 1998-2002 Annual Reports prove the executives ran the
company into the ground and the company lost over $13 million, no sales, and significant
year-after-year losses:

Year (source: annual

reports)

Net Profit

YTD accumulated
losses

1998

$490,000 loss

(omitted from AS)

1999

$1.4 million loss

(omitted from AS)

2000

$1.2 million loss

$3.13 million loss

2001

$2.9 million loss

$6 million loss

2002

$7 million loss

$13 million loss

2003

Reduced $2.3 million loss (Algae Dynamic Execs

no longer employed)

The inflated share value ($150 million) came from the Internet bubble. The stock became a
penny share with massive losses shortly thereafter. Yearly losses were cut significantly when
Algae Dynamics management was "retired".

Mr. Ramsay's and Mr. Rusiniak's conduct in Algae Dynamics is very similar to the
performance of Cymat: Little revenue, no profit, massive losses, emphasis on stock sales.

Public Companies operated by Ramsay and Rusiniak have never made profit and investors
have always lost money.
Since receiving emails and documents from solicited people, we learned that Paul Ramsay
would forward emails to Sandra Elsley between himself and large companies. The
discussions were impractical because Algae Dynamics has no production or sales. Paul
Ramsay would further salt the emails by advising Sandra Elsley that the company was in
fact a large potential client. Sandra Elsley would then forward these emails to unsuspecting
investors in an attempt to manipulate an investment. This scheme was used to push
investors into believing large companies were interested in buying large volumes of product
when in fact they were not and no such production existed.

SANDRA ELSLEY, former VP Communications

Sandra Elsley S1 Biography (pg 35): "Over 25 years of experience in human relations and
the organizational development field as a communications and relationship expert, working
in government, corporate and private sectors. Extensive experience developing, marketing
and managing peak - performance programs to enhance individual and company dynamics
in Canada and internationally. Was involved in the start up of an Ontario based company,
was instrumental in raising funds and working as VP Corporate
Communications/Investor Relations - share price went from $0.50 to $7.70. Has
privately owned and managed a successful psychotherapy and consulting practice since
1991."
Fact Check: SEDAR and EDGAR do not reveal Sandra Elsley has ever worked for a public
company, much less one that had a share price that went from $0.50 to $7.70. There is one
public filing from a non-public company that states Sandra Elsley's employment with the
company was terminated with cause. Algae Dynamics, as well, filed a mutual release with
Sandra Elsley terminating her employment as the disastrous 10Q was filed, adding to Sandra
Elsley's lengthy list of failures.
There are numerous cons, lawsuits, judgments and court orders against Sandra Elsley in
Canadian, US, both in various courts.
A family therapist, Sandra Elsley, was an officer of Algae Dynamics titled as "VP Corporate
Communications" until recently. According to a contract filed in the S1, in an unusual role for
a family therapist, Sandra Elsley's job was to manipulate money from her therapy clients,
write investment documentation, and handle investor communications. Most disturbing is
that Sandra Elsley convinces vulnerable therapy clients from her therapy practice to invest
into her penny stock promotions and schemes.
Pacer court records and other public court filings detail numerous prior and current
litigations over the past ten years involving Sandra Elsley detailing a history of fraud and
misrepresentations. A quick search of the names listed in the S1 reveal related numerous
litigations, including a transcript from a Nevada lawsuit naming Sandra Elsley as an

interested party. A transcript of Sandra Elsley's deposition demonstrates her reluctantly

admitting after first denying that at least one of the S1 investors is a mental health therapy
client of Sandra Elsley's and that Sandra Elsley borrowed significant money from her. Sandra
Elsley refused to disclose the amount she borrowed; however, she did state that she had not
repaid the loan. This raises a serious concern of Algae Dynamics "nominee shareholders"
whereby Directors and Officers of Algae Dynamics would benefit directly from an S1 investor
selling into the market if the company became public. These monies could be disguised as
loans to the insiders as they are in most OTCBB scams.
We have since located court rulings against Sandra Elsley on Canlii Law wherein the judge
presiding in ruling 2013 ONSC 1210, sanctions Sandra Elsley for numerous false statements
and directly comments "she actually stated in her affidavit was misleading at best and
untrue at worst." - just the kind of Communications VP any public company would want,
right?
In SPAM emails to new potential investors, Sandra Elsley claimed the Mr Ramsey and Mr
Rusiniak were "smart business men who made $50,000,000 Million about ten years ago and
retired" and she goes onto say they "Spent alot of money, got bored, and decided to find the
next best product to market." Sandra Elsley failed to disclose to investors material
information like the two men enjoyed high compensation, share sales to unsuspecting
investors, while driving Cymat to a $13,000,000 loss, never achieving a profit, and little to
no revenue in less than 5 years.
Sandra Elsley was compensated generously for her services at significant damage to her
vulnerable clients.
Since our Expos, numerous potential investors sent us copies of boiler-room investment
emails and attachments received from Sandra Elsley.

OFFERING DOCUMENTS AND PRIOR FINANCING RAISES

(click to enlarge)

(Figure 1 - financials used in prior financing rounds in 2014)

Fact Checking Highlights of Offering Materials vs. Financials in 2015 S1
False Claim

Offering Document

Actual from latest S1

Revenue 2015

$14.1 million

$0 nothing

Gross Profit 2015

$9.1 million

$0 nothing

Plant Equipment 2015

$4.7 million

$77,500

Net earnings YTD

$3.7 million profit

In excess of $2 million lost

EBITDA (page 8 of document)

$247 million value

$0 profit x 15 = $0 value

A copy of this report was submitted to securities regulators in numerous jurisdictions.

Disclosure: I will short Algae Dynamics if possible. I wrote this article myself, and it
expresses my own opinions. I am not receiving compensation for it. I have no business
relationship with any company whose stock is mentioned in this article.