It's a bit different with SEC and filing a 8-K. If you file a Form 8-K and make materially misleading statements in an intentional matter, it is fraud. And SEC will squash you like a bug. That would include filing a Form 8-K when you have no financing whatsoever, so that you could inflate your stock price or otherwise profit from said materially misleading statements.
Actually, doing some research...
Why are they using a 2844 SIC Code, which is "PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS"? That's weird, but not illegal. If they started off dealing with that category, or currently also deal in that category, it's fine. It's a bit strange, though.
Reading the filing itself. It's weasel worded, but the above still applies. They are offering $750m in cash, and 160m GDSI stock. Filing also suggests that Freedom Group has about $800m in debt and an EBITDA of $230m. Neither are bad, but that's more debt than I'd care to carry unless it's capital projects (new tooling, factories, etc). GDSI has about $2m worth of cash/notes on hand ($14.5m in capital, $12.9m in debt). Their shares are valued at $0.001 per share, with 175m outstanding shares.
Unless I am completely misreading their 10Q, these guys have currently virtually nothing.
http://www.sec.gov/Archives/edgar/data/1011662/000121390013005849/Financial_Report.xlsxOverall, GDSI has virtually no assets on the books. If they did file the bid on Freedom Group completely as a PR stunt, SEC could give them a rough time but probably not throw them in jail. The only way that GDSI's bid on Freedom Group is legit is if they have someone with very very deep pockets willing to dedicate $750m in cash, even in theory. GDSI's shares are penny stock, basically only useful as tickers of who owns how much of the company, so the "160m of GDSI stock" is pointless. They also only HAVE 175m stock.
Pondering it over, my guess is stunt or that GDSI is delusional. It's possible they have some investor or bank, but these days with the credit market? That's a lot of cash.
