Flameret Inc (FLRE)

[surfkast]

Is it starting here also?

The trend has been to fashion an agreement that looks substantially like a convertible promissory note with takedowns of the debt by the creditor priced at a discount to market and subject to an ownership limitation to avoid affiliation.

This structure has a tendency to drive down the company’s stock price and result in substantial dilution to existing stockholders. For example, if the security is priced at $1.00 and the 3(a)(10) creditor converts $10,000 of debt and immediately sells those securities into the public market, that very selling pressure may drive down the price. When the 3(a)(10) creditor converted the next $10,000 in debt at a lower price, say $.80, they would get more common stock to cover the same amount of debt. Upon selling this stock, again, the selling pressure would drive down the price. as the 3(a)(10) creditor continues to convert into more and more stock to cover the same amount of debt, and sell such stock, the price is driven down further and further. Moreover, as the shares are freely tradable, the amount of stock in the public float continues to increase, resulting in dilution to the current shareholders and making it much more difficult for the same stock to see an upward movement in its price.


http://securities-law-blog.com/category/rule-144/

ISSUANCE HISTORY
On July 11, 2011 the board of directors voted to approve a 1 for 1,000 reverse stock-split of shares of the Company's common stock, effective August 1, 2011. All references in the financial statements to the Company's common stock have been restated with respect to that reversal.
Date Offered Sold/ Redeemed Price Paid Desciption of transactions
01-Sep-11 20,943,120 20,943,120 Brought forward
10-Sep-11 52,880,000 52,880,000 Conversion from Preference E stock
15-Sep-11 8,330,000 8,330,000 Conversion from Preference E stock
06-Oct-11 8,500,000 8,500,000 Conversion from Preference E stock
13-Oct-11 1,500,000 1,500,000 $0.0250 $37,500 Payment of $37,500 for IR services
24-Oct-11 7,800,000 7,800,000 Conversion from Preference E stock
27-Oct-11 75,000 75,000 Conversion from Preference B stock
03-Nov-11 15,000,000 15,000,000 Conversion from Preference E stock
04-Nov-11 63,000,000 63,000,000 Conversion from Preference E stock
15-Mar-12 25,000,000 25,000,000 Conversion from Preference E stock
20-Apr-12 10,000,000 10,000,000 Conversion from Preference E stock
23-Apr-12 1,250,000 1,250,000 $0.0040 $5,000 Payment for pre-paid consulting services
25-Apr-12 7,000,000 7,000,000 $0.0023 $16,133 Share subscription - Sold for cash
18-Jul-12 1,250,000 1,250,000 $0.0038 $4,750 Payment for pre-paid consulting services
222,528,120
Private offering stockholder information:
Date Holding Stockholder
10-Sep-11 46,000,000 Kars Capital
1,955,000 L Gale
4,925,000 Mersar Capital
15-Sep-11 2,415,000 Convergent Capital
5,915,000 Macau Consultants
06-Oct-11 8,500,000 Tiffany Asset Group
13-Oct-11 1,500,000 Empire Relations Group
24-Oct-11 7,800,000 Magna Group
27-Oct-11 75,000 A Willis
03-Nov-11 15,000,000 Tower Financial
04-Nov-11 12,000,000 Ancor Financial
15,000,000 Kars Capital
15,000,000 Mersar Capital
6,000,000 Tiffany Asset Group
15,000,000 Convergent Capital
15-Mar-12 14,000,000 Alpha Brilliant
8,500,000 Oxford Capital Fund
2,500,000 Tiffany Asset Group
20-Apr-12 10,000,000 Oxford Capital Fund
23-Apr-12 1,250,000 Elite Financial Communications
25-Apr-12 7,000,000 B Harding
18-Jul-12 1,250,000 Elite Financial Communications
• The price at which the shares were offered, and the amount actually paid to the issuer;
See Note D
• The trading status of the shares; and
All shares are fully tradable and unencumbered