Fuse Science Inc (DROP)

[tob999]

The reason for the past massive dilution and current low PPS is in the 10Q's Subsequent Events section. The graph tells the story of these huge conversions. When these conversions are done (if they aren't already) it's pop time! :

On August 27, 2014, we entered into a series of exchange agreements with certain holders of convertible debentures and promissory notes in the principal face amount of $1,697,000. Pursuant to the exchange agreements, the holders exchanged the notes and relinquished any and all other rights they may have pursuant to the notes in exchange for 1,500,000 shares of newly designated Series A Convertible Preferred Stock (the “Series A Preferred Stock”). Such exchanges were conducted pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

Each share of Series A Preferred Stock has a stated value of $2.00 and is convertible into shares of common stock equal to the stated value (and all accrued but unpaid dividends) divided by a conversion price equal to the lower of (i) $0.02 and (ii) twenty percent (20%) of the lowest VWAP of the common stock on the trading day during the twenty (20) consecutive trading days ending on the trading day immediately preceding the conversion date (subject to adjustment). The Series A Preferred Stock accrues dividends at a rate of 12% per annum, payable quarterly in arrears in cash or in kind, subject to certain conditions being met. The Series A Preferred Stock contains a seven year “make-whole” provision such that if the Series A Preferred Stock is converted prior to the seventh anniversary of the date of original issuance, the holder will be entitled to receive the remaining amount of dividends that would accrued from the of the conversion until such seven year anniversary. The Company is prohibited from effecting the conversion of the Series A Preferred Stock to the extent that, as a result of such conversion, the holder beneficially owns more than 2.49%, in the aggregate, of the issued and outstanding shares of the Company’s common stock calculated immediately after giving effect to the issuance of shares of common stock upon the conversion of the Series A Preferred Stock.

On August 27, 2014, the Company filed the Series A Certificate of Designation with the Secretary of State of the State of Nevada.

In June, July and August of 2014 the Company entered into agreements with several of its vendors and creditors in which approximately $2,519,000 of obligations shall be extinguished upon the repayment of $251,238 to such vendors, in the aggregate, which is anticipated to occur during September 2014.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=10198050