Pervasip Corp (PVSP)

[Helter Skelter]

The CD that I'm concerned about is "The Redwood CD" for $50,000. It converts @ 50% off the lowest pps 20 days prior to converting. The lowest pps since purchase of the CD was $.008. 50% off of $.008 = $.004 = 250 shares per dollar = 12,500,000 shares for $50,000. The share purchase agreement was consummated as of December 24th, 2010. The company is relying on Rule 506 (REGDEX, Regulation D Exemption) to issue shares as they do not have an effective (EFFECT) registration statement, with the SEC, to issue shares. They should have filed a FORM D for that Rule 506 exemption, in my opinion. Rule 506 shares are restricted for 6 months, fully reporting company (Pervasip), and 1 year for a non-reporting company. Again, the share purchase agreement was consummated on December 24th, 2010. 6 months takes us to June 24th, 2011. At that time they can cover 12,500,000 shares of what they've likely shorted with their then free-trading, nonrestricted shares. Hopefully the 5,358,606 shares issued from December 1st, 2010 to April 15th, 2011 took out $92,000 of the $93,170 3-piece Convertible Debenture. If not we could be in a little trouble. The OS was reported as ~26M on May 17th, 2011. I add "The Redwood CD" 12.5M shares to that and come up with approximately 40M OS. We then have NetCapital's share conversion(s) to factor in and some other debt that was paid in shares. Remember, all these shares are restricted, in my opinion, so to obtain cash and eliminate most risk the recipient of the converted shares likely shorts the stock and then covers with the converted shares after the restrictive legend is removed (6 months). I consider the $50,000 Redwood CD a major blunder on the part of the company. But, apparently facing bankruptcy, what can you do? That's what I've been advised to consider, anyway.

Steel yourselves to see the OS @ ~50M when the 2nd quarter 10-Q is required to be filed, July 15th, 2011. If they file on time. The above is all speculation on my part and may prove out to be...not all that accurate. It's what I factor into my risk-reward considerations. Please verify with your own DD (due diligence). 50M OS x $.06 = $3M. Still grossly undervalued considering the new dynamics of the company...the new ballgame.

From the last 10-Q:

State the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date: 19,977,750 shares of common stock, par value $.10 per share, as of March 31, 2011.

The convertible debentures consist of a $50,000 convertible debenture that we issued in exchange for a $50,000 cash payment, and three debentures, which we issued in the aggregate total of $93,170, in exchange for a reduction in notes and trade payables that totaled $93,170. Conversion features allow the holders to convert into shares of our common stock at a discount to the trading price of our common stock, ranging from 10% to 50%. We can pre-pay any portion of the debentures at any time at a 15% to 25% premium to the principal amount that is retired. From December 1, 2010 to April 15, 2011 we issued a total of 5,358,606 shares of our common stock for debt conversions to pay approximately $92,000 in debt.

http://www.sec.gov/Archives/edgar/data/90721/000081027011000015/form10_q.htm

Did anyone notice this from today's 8-K?

DEBTOR seeks to avoid dispute, retire debt from its books and records, make effort to improve its financial picture for potential acquisition and future fundings by eliminating or limiting the extent of debt the DEBTOR faces, and allow such conversion rights desired by the CLAIMANT...

That's the company's/shareholders' equity position I was referring to yesterday...being cleaned up and glossified, lol, for..."potential acquisition" (stated right there in their filing!) once trading on the NASDAQ...just my opinion...

We wait for news on what new technologies and "vision" that NetCapital brings into PVSP and an updated status of Ojo Vision video phone, app downloads and any/all other sales efforts, which could come any day now...

All of the above is, obviously, in my opinion based on information provided and is limited in it's totality.

I'm off to my beach bar.

Good day.