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Now 28 million on the ask- which one of you pumpers is dumping early now that this dilutive toxic death spiral victim of a stock has been exposed?
.0002 x .0003, 23 million on the ask- somebody is dumping shares now. This is the worst that level 2 has looked this week.
10q- lost 455,000, have 8,000 in cash and round after round of toxic finance ready to convert. No profit...headed into a toxic death spiral.
There is no revenue- that is why they have had four rounds of toxic finance since December. They are bleeding cash or they wouldn't go to the place of last resort for money.
There are no revenues- read the filings.
Here is why ACTL will fail and go out of business in my opinion. Go to the news section and read every 13g. They all detail the toxic finance deals ACTL has made because ACTL can't get financing any other way.
Death spiral financing is a process in which convertible financing used to fund primarily small cap companies can be used against it in the marketplace to cause the company’s stock to fall dramatically, which can lead to the company’s ultimate downfall.
Many small companies rely on selling convertible debt to large private investors (see private investment in public equity) to fund their operations and growth. This convertible debt, often convertible preferred stock or convertible debentures, can be converted to the common stock of the issuing company often at steep discounts to the market value of the common stock. Under the typical “death spiral” scenario, the holder of the convertible debt initially shorts the issuer’s common stock, which often causes the stock price to decline, at which time the debt holder converts some of the convertible debt to common shares with which he then covers the debt holder's short position. The debt holder continues to sell short and cover with converted stock, which, along with selling by other shareholders alarmed by the falling price, continually weakens the share price, making the shares unattractive to new investors and possibly severely limiting the company’s ability to obtain new financing if necessary.
An important characteristic of this kind of convertible debt is that it often carries conditions like a quarterly or semiannual reset of the conversion price to keep the conversion price more or less close to the actual stock price. However, a lower conversion price also increases the number of shares that a bond holder gets in exchange for one bond, which increases the dilution of existing shareholders. A lower price reset can also force investors that have set up a long CB/short stock position to sell more stock ("adjust the delta"), creating a vicious circle, hence the nickname death spiral.
Companies willing to agree to financing on these terms are often desperate and could not obtain funding through any other means. The terms, though viewed by some as onerous, give the lender a potential way to recover their debt regardless of what happens to the shares of the company. The lender would have a potentially greater gain if the shares were to increase in value, but if they decrease in value, there is some protection. Otherwise, they would probably not be willing to lend the money because of the poor risk profiles of the companies interested in this type of financing.
Here is why ACTL will fail and go out of business in my opinion. Go to the news section and read every 13g. They all detail the toxic finance deals ACTL has made because ACTL can't get financing any other way.
Death spiral financing is a process in which convertible financing used to fund primarily small cap companies can be used against it in the marketplace to cause the company’s stock to fall dramatically, which can lead to the company’s ultimate downfall.
Many small companies rely on selling convertible debt to large private investors (see private investment in public equity) to fund their operations and growth. This convertible debt, often convertible preferred stock or convertible debentures, can be converted to the common stock of the issuing company often at steep discounts to the market value of the common stock. Under the typical “death spiral” scenario, the holder of the convertible debt initially shorts the issuer’s common stock, which often causes the stock price to decline, at which time the debt holder converts some of the convertible debt to common shares with which he then covers the debt holder's short position. The debt holder continues to sell short and cover with converted stock, which, along with selling by other shareholders alarmed by the falling price, continually weakens the share price, making the shares unattractive to new investors and possibly severely limiting the company’s ability to obtain new financing if necessary.
An important characteristic of this kind of convertible debt is that it often carries conditions like a quarterly or semiannual reset of the conversion price to keep the conversion price more or less close to the actual stock price. However, a lower conversion price also increases the number of shares that a bond holder gets in exchange for one bond, which increases the dilution of existing shareholders. A lower price reset can also force investors that have set up a long CB/short stock position to sell more stock ("adjust the delta"), creating a vicious circle, hence the nickname death spiral.
Companies willing to agree to financing on these terms are often desperate and could not obtain funding through any other means. The terms, though viewed by some as onerous, give the lender a potential way to recover their debt regardless of what happens to the shares of the company. The lender would have a potentially greater gain if the shares were to increase in value, but if they decrease in value, there is some protection. Otherwise, they would probably not be willing to lend the money because of the poor risk profiles of the companies interested in this type of financing.
Now that John Fife and ACTL are in bed together, please look at a list of companies that Fife sent into a toxic finance death spiral.
SAPX
SFMI
XDSL
MWIP
TAUG
NVNC
SWET
SDRG
PMBS
BONU
CSKH
EPAZ
BONZ
FLPC
DIDG
ECOB
CBAI
NBRI
HLXW
ARSC
Pitiful.
More on the ACTL scammer-
https://www.sec.gov/litigation/complaints/2007/comp19972.pdf
Amended Statement of Ownership (sc 13g/a)
Print
Alert
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
(Amendment No. 1 )*
Artec Global Media, Inc.
(Name of Issuer)
Common Stock, $0.001 Par Value
(Title of Class of Securities)
04300F105
(CUSIP Number)
Calendar Year 2016
(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this Schedule is filed:
o Rule 13d-1(b)
x Rule 13d-1(c)
o Rule 13d-1(d)
* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 04300F105
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Typenex Co-Investment, LLC
20-0495695
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) o
(b) o
3 SEC USE ONLY
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Utah
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 5 SOLE VOTING POWER
8,319,501
6 SHARED VOTING POWER
7 SOLE DISPOSITIVE POWER
8,319,501
8 SHARED DISPOSITIVE POWER
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,319,501
10 CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
o
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.99*%
12 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
OO
FOOTNOTES
* Reporting person Typenex Co-Investment, LLC ("Typenex") has rights, under a Convertible Promissory Note and a series of Warrants, to own an aggregate number of shares of the Issuer’s common stock which, except for a contractual cap on the amount of outstanding shares of the Issuer’s common stock that Typenex may own, would exceed such a cap. Typenex’s ownership cap is 9.99%. Thus, the number of shares of the Issuer’s common stock beneficially owned by Typenex as of the date of this filing was 8,319,501 shares, which is 9.99% of the 83,278,293 shares that were outstanding on that date (as reported in the Issuer’s Form 10-Q filed on December 21, 2015).
CUSIP No. 04300F105
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Red Cliffs Investments, Inc.
46-2676148
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) o
(b) o
3 SEC USE ONLY
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Utah
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 5 SOLE VOTING POWER
8,319,501
6 SHARED VOTING POWER
7 SOLE DISPOSITIVE POWER
8,319,501
8 SHARED DISPOSITIVE POWER
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,319,501
10 CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
o
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.99*%
12 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
FOOTNOTES
* Reporting person Red Cliffs Investments, Inc is the Manager of reporting person Typenex. Typenex has rights, under a Convertible Promissory Note and a series of Warrants, to own an aggregate number of shares of the Issuer’s common stock which, except for a contractual cap on the amount of outstanding shares of the Issuer’s common stock that Typenex may own, would exceed such a cap. Typenex’s ownership cap is 9.99%. Thus, the number of shares of the Issuer’s common stock beneficially owned by Typenex as of the date of this filing was 8,319,501 shares, which is 9.99% of the 83,278,293 shares that were outstanding on that date (as reported in the Issuer’s Form 10-Q filed on December 21, 2015).
CUSIP No. 04300F105
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JFV Holdings, Inc.
36-4426825
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) o
(b) o
3 SEC USE ONLY
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 5 SOLE VOTING POWER
8,319,501
6 SHARED VOTING POWER
7 SOLE DISPOSITIVE POWER
8,319,501
8 SHARED DISPOSITIVE POWER
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,319,501
10 CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
o
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.99*%
12 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
FOOTNOTES
* Reporting person JFV Holdings, Inc. is the sole shareholder of reporting person Red Cliffs Investments, Inc., which is the Manager of reporting person Typenex. Typenex has rights, under a Convertible Promissory Note and a series of Warrants, to own an aggregate number of shares of the Issuer’s common stock which, except for a contractual cap on the amount of outstanding shares of the Issuer’s common stock that Typenex may own, would exceed such a cap. Typenex’s ownership cap is 9.99%. Thus, the number of shares of the Issuer’s common stock beneficially owned by Typenex as of the date of this filing was 8,319,501 shares, which is 9.99% of the 83,278,293 shares that were outstanding on that date (as reported in the Issuer’s Form 10-Q filed on December 21, 2015).
CUSIP No. 04300F105
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
John M Fife
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) o
(b) o
3 SEC USE ONLY
4 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 5 SOLE VOTING POWER
8,319,501
6 SHARED VOTING POWER
7 SOLE DISPOSITIVE POWER
8,319,501
8 SHARED DISPOSITIVE POWER
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,319,501
10 CHECK IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
o
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.99*%
12 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
FOOTNOTES
* Reporting person John M. Fife is the sole shareholder of reporting person JFV Holdings, Inc., which is the sole shareholder of reporting person Red Cliffs Investments, Inc., which is the Manager of reporting person Typenex. Typenex has rights, under a Convertible Promissory Note and a series of Warrants, to own an aggregate number of shares of the Issuer’s common stock which, except for a contractual cap on the amount of outstanding shares of the Issuer’s common stock that Typenex may own, would exceed such a cap. Typenex’s ownership cap is 9.99%. Thus, the number of shares of the Issuer’s common stock beneficially owned by Typenex as of the date of this filing was 8,319,501 shares, which is 9.99% of the 83,278,293 shares that were outstanding on that date (as reported in the Issuer’s Form 10-Q filed on December 21, 2015).
Item 1.
(a)
Name of Issuer
Artec Global Media, Inc.
(b)
Address of Issuer’s Principal Executive Offices
1000 E William St Suite 204
Carson City, NV 89701
Item 2.
(a)
Name of Person Filing
This report is filed by Typenex Co-Investment, LLC, Red Cliffs Investments, Inc., JVF Holdings, Inc., and John M. Fife with respect to the shares of Common Stock of the Issuer that are directly beneficially owned by Typenex Co-Investment, LLC and indirectly beneficially owned by the other reporting and filing persons.
(b)
Address of Principal Business Office or, if none, Residence
The address of the principal business office of each reporting and filing person is:
303 East Wacker Drive, Suite 1040
Chicago, IL 60601.
(c)
Citizenship
Typenex Co-Investment, LLC is a Utah Limited Liability Company.
Red Cliffs Investments, Inc. is a Utah Corporation.
JVF Holdings, Inc. is an Illinois Corporation.
John M. Fife is a United States citizen.
(d)
Title of Class of Securities
Common Stock, $0.001 Par Value
(e)
CUSIP Number
04300F105
Read the 13g- dilution scam alert.
The "news" for ACTL was that shares went to John M Fife. ACTL is taking money from a man who is a convicted stock manipulator and scammer. Look what Fife to another stock-
Despite everything, the stock of MaryJane Group Inc (OTCMKTS:MJMJ, MJMJ message board) is still clambering up the charts and doing it in no small strides. Yesterday the company closed 42% up, stopping at half a cent per share flat.
It's not really possible to pinpoint the reason why MJMJ jumped again. The company's CannaCamp venture was mentioned by Jimmy Fallon in his late night show on Monday and this no doubt contributed to the hype surrounding the new project, even if Fallon simply used the CannaCamp as a vehicle to deliver a number of stoner jokes.
There is one new filing in MJMJ's feed that went up yesterday but that did not reveal much in the way of useful insights, except for perhaps one. Mr. John M. Fife is now a 9.99% owner of MJMJ, through being the sole holder of JVF Holdings, which is the sole shareholder of Red Cliff Investments, which in turn is the manager of reporting entity Typenex.
This happens to be the same Mr. John M. Fife who became the target of a SEC complaint alleging a “fraudulent scheme to purchase variable annuity contracts” and engage in “market timing”. The court's final judgment on the matter included defendants Jonh M. Fife and Clarion Management paying disgorgement of $234 thousand. Fife was additionally fined with a civil penalty of $234 thousand.
Typenex – the entity, which is managed by an entity, whose sole shareholder is an entity, whose own sole shareholder is Mr. Fife, can obtain an undisclosed amount of additional MJMJ shares but has its ownership capped at 9.99% so this is not possible at this point in time.
This bit of news comes on the heels of MJMJ diluting its common stock some 1690% between March and June 2015, after issuing 350,000,000 new shares at an average of $0.001 apiece.
The Market Makers have this spread at .0002 x .0004. They clearly want to cover at .0002 and are using this spread to kill demand. This stock needs good news or this play is done, imo.
...and now .0002 x .0003. I guess those .0004s were not "getting slapped" after all.
bid is thinning, the sell off continues. Now 400k on the bid and 35 million on the ask.
also, see 34 million on ask versus only 500k on bid....somebody is selling for sure.
New 13g filing- more shares given to a toxic financier today. The company is bleeding cash and is being forced to dilute to survive. Look at the new filing please.
How am I wrong? Dilution is obvious to see.
Should they regard the factual posts? What if the factual posts are negative?
You were not up 100%. You traded at 3x4 for most of the day and then finished down at 2x3 after trading the float. That is dilution.
From the last 13g- *Reporting Person has rights under a convertible note to own an aggregate number of shares of the issuer common stock not to exceed 9.9% of shares outstanding. The Reporting Persons’ beneficial ownership of 3,000,000 shares of Common Stock constitutes approximately 9.8% of all the outstanding shares of Common Stock, based upon a total of 336,670,447 shares of Common Stock as reported by the Issuer’s transfer agent on January 22, 2016.
total assets- $8,075. nice.
In the past 6 months the company has given away 10% of the company stock three time to a toxic financier.
From the 8k- this company is bleeding cash and has no choice but to heavily dilute to stay out of bankruptcy-
Item 1.01. Entry into a Material Definitive Agreement.
On December 24, 2015, Artec Global Media, Inc. (the "Company") entered into a credit facility arrangement with a lender (the "Credit Facility"). The initial advance under Credit Facility was $150,000, with additional amounts to be funded at the lender's discretion. In connection with the Credit Facility, the Company agreed to pay certain fees to the lender and certain of its affiliates. In connection with the Credit Facility, the Company granted the lender a first priority security interest in all of the Company's assets. Additional details of the Credit Facility will be provided in the Company's next quarterly report on Form 10-Q.
On December 24, 2015, the Company entered into an equity facility arrangement with an investor (the "Equity Facility") pursuant to which the Company may cause the investor to purchase shares of the Company's common stock at certain prices, provided, however, that the investor is not obligated to purchase such shares until an S-1 Registration Statement covering the shares to be sold (the "S-1") is declared effective by the Securities and Exchange Commission. Notwithstanding the forgoing, on December 24, 2015, the investor advanced $100,000 to the Company under the Equity Facility, which amounts shall convert into shares of common stock after the S-1 is declared effective. Additional details of the Equity Facility will be provided in the S-1 to be filed by the Company.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information under Item 1.01 above is incorporated by reference hereunder.
ACTL DD on toxic financing-
From the last 10q, read down for the bolded parts...
On October 30, 2014, Artec and LG Capital Funding, LLC ("LG Capital") entered into a Securities Purchase Agreement (the "LG SPA"). Under the LG SPA, LG Capital will provide $165,375 in three equal payments of $55,125 and evidenced by a convertible promissory note on each of October 31, 2014, January 29, 2015 and a date to be determined. On October 31, 2014, Artec received $50,000 net of $5,125 ($2,500 legal fees and $2,625 OID) and issued a convertible promissory note (the "LG Note 1") in the amount of $55,125. On January 30, 2015, Artec received $50,000 net of $5,125 ($2,500 legal fees and $2,625 OID) and issued a convertible promissory note (the "LG Note 2") in the amount of $55,125. The LG Note 1 and LG Note 2 (collectively the "LG Notes") mature in one year on October 30, 2015 and January 30, 2016, respectively, accrue interest of 8% and are convertible into shares of common stock any time 180 days after the date of each LG Note at a conversion price equal to 65% of the lowest closing bid price as quoted on a national exchange for ten prior trading days including the date on which the Notice of Conversion is received by Artec. In no event shall LG Capital effect a conversion if such conversion results in LG Capital beneficially owning in excess of 9.9% of the outstanding common stock of the Company. Accrued interest shall be paid in shares of common stock at any time at the discretion of the LG Capital pursuant to the conversion terms above. The Note may be prepaid with the following penalties: (i) if the Note is prepaid within 90 days of the issuance date, then 115% of the face amount plus any accrued interest; (ii) if the Note is prepaid within 91 -180 days of the issuance date, then 135% of the face amount plus any accrued interest. The Note may not be prepaid after the 180th day.
The Company is in default of LG Note 1 due to there being an unpaid balance as of the date of maturity. As a result, the interest on LG Note 1 will increase to 24% and a 10% penalty of the outstanding principal, or $3,924 was added to the principal balance of the LG Note 1. The LG Note 1 is currently in default.
The debt discounts attributable to the fair value of the beneficial conversion feature amounted to $29,681 and $30,252 for LG Note 1 and LG Note 2, respectively, and are being accreted over the term of the LG Notes.
During the three months ended October 31, 2015, the Company recognized $2,031 of interest expense and $14,942 of debt discount accretion related to the LG Notes. During the nine months ended October 31, 2015, the Company recognized $6,332 of interest expense and $44,662 of debt discount accretion related to the LG Notes.
During the three and nine months ended October 31, 2015, LG Capital converted $11,523 and $16,878, respectively into a total of 3,608,967 shares of common stock.
8
Adar Bays Convertible Note
On October 30, 2014, Artec and Adar Bays, LLC ("Adar") entered into a Securities Purchase Agreement (the "Adar SPA"). Under the Adar SPA, Adar will provide $105,000 in two equal payments of $52,500 and evidenced by a convertible promissory note. On October 31, 2014, Artec received $47,500 net of $5,000 ($2,500 legal fees and $2,500 OID) and issued a convertible promissory note (the "Adar Note") in the amount of $52,500. The Adar Note accrues interest of 8%, matures on October 31, 2015 and is convertible into shares of common stock any time 180 days after October 30, 2014, beginning on April 28, 2015 at a conversion price equal to 65% of the lowest closing bid price as quoted on a national exchange for ten prior trading days including the date on which the Notice of Conversion is received by Artec. In no event shall Adar effect a conversion if such conversion results in Adar beneficially owning in excess of 9.9% of the outstanding common stock of the Company. Accrued interest shall be paid in shares of common stock at any time at the discretion of Adar pursuant to the conversion terms above. The Adar Note may not be prepaid.
Additionally, Adar issued to the Company a note for $50,000, bearing interest at the rate of 8% per annum maturing on July 1, 2015 (the "AdarInvestor Note"). The Adar Investor Note may be prepaid, without penalty, all or portion of the outstanding balance along with accrued but unpaid interest at any time prior to maturity. No cash changed hands in exchange for the Adar Investor Note. The purpose of the Adar Investor Note is to facilitate the timely sale of common stock in the future should Adar fund the Adar Investor Note.
The Company is in default of the Adar Note due to there being an unpaid balance as of the date of maturity. As a result, the interest on the Adar Note will increase to 24%. The Adar Note is currently in default.
The debt discount attributable to the fair value of the beneficial conversion feature amounted to $28,270 for the Adar Note and is being accreted over the term of the Adar Note. The Company recognized $50 of net interest expense and $7,048 of debt discount accretion related to the Adar Note and Adar Investor Note during the three months ended October, 31, 2015. The Company recognized $200 of net interest expense and $21,067 of debt discount accretion related to the Adar Note and Adar Investor Note during the nine months ended October, 31, 2015.
JMJ Financial Convertible Note
On November 12, 2014, Artec and JMJ Financial entered into a $250,000 Convertible Promissory Note (the "JMJ Note"). Under the JMJ Note, JMJ Financial will advance various amounts up to $250,000 in their sole discretion. Each advance matures two years from the date of advance (the "JMJMaturity Date") and carries the following terms: (i) no interest for the first 90 days with a one-time 12% charge on the 90th day outstanding; (ii) each advance may be repaid within 90 days after which Artec may not make further payments prior to the JMJ Note Maturity Date; (iii) each advance includes a 10% original issue discount. JMJ Financial may convert at their discretion any or all of the outstanding principal and interest at any time from the date of each advance into shares of common stock at a conversion price equal to 60% of the lowest trade price in the 25 trading days previous to the conversion. Unless otherwise agreed in writing by both parties, at no time will JMJ Financial convert any amount of the JMJ Note into common stock that would result in the JMJ Financial owning more than 4.99% of the common stock outstanding. Artec receved $35,000 pursuant to the JMJ Note ("JMJ Note 1") on November 12, 2014 and recorded a debt discount of $25,926 attributable to the fair value of the beneficial conversion feature. Artec received $25,000 pursuant to the JMJ Note ("JMJ Note 2") (collectively the "JMJ Notes") on April 28, 2015 and recorded a debt discount of $18,519 attributable to the fair value of the beneficial conversion feature. The debt discounts are being accreted over the term of the JMJ Notes.
The Company recognized no interest expense related to the JMJ Note 2 and $5,601 of debt discount accretion related to the JMJ Notes during the three months ended October 31, 2015. The Company recognized $8,000 of interest expense related to the JMJ Note 1 and JMJ Note 2 and $14,414 of debt discount accretion related to the JMJ Notes during the nine months ended October 31, 2015.
During the three and nine months ended October 31, 2015, JMJ converted $11,754 and $31,671, respectively into a total of 2,445,500 shares of common stock.
9
Vista Capital Investments Convertible Note
On December 4, 2014, Artec and Vista Capital Investments, LLC ("Vista") entered into a Securities Purchase Agreement (the "Vista SPA"), for the sale of a 12% convertible note in the principal amount of $250,000 (which includes a $25,000 original issue discount) (the "VistaNote") of which Vista funded $35,000 upon closing. Additional consideration, up to the principal amount, is payable to Artec at the discretion of Vista. We have no obligation to pay Vista any amounts on the unfunded portion of the Vista Note. The Vista Note bears a one-time interest charge of 12% on the date consideration is received. All interest and principal must be repaid two years from the date consideration is received. The Vista Note is convertible into common stock, at Vista's option, at 60% of the lowest trade occurring during the twenty five (25) consecutive trading days immediately preceding the conversion date. In the event the Company elects to prepay all or any portion of the Vista Note within 90 days of the issuance date, the Company is required to pay to Vista an amount in cash equal to 145% multiplied by the sum of all principal, interest and any other amounts owing. Unless otherwise agreed in writing by both parties, at no time will Vista convert any amount of the Vista Note into common stock that would result in the Vista owning more than 4.99% of the common stock outstanding.
The debt discount attributable to the fair value of the beneficial conversion feature amounted to $38,889 for the Vista Note and is being accreted over the term of the Vista Note. The Company recognized no interest expense related to the Vista Note during the nine months ended October 31, 2015. The Company recorded $4,901 and $14,543 of debt discount accretion during the three and nine months ended October 31, 2015.
During the three and nine months ended October 31, 2015, Vista converted $1,375 into 1,375,000 shares of common stock.
Typenex Financing
On January 7, 2015 (the "Effective Date") Artec entered into a Securities Purchase Agreement with Typenex Co-Investment, LLC ("Typenex"), for the sale of a 10% convertible note in the principal amount of $225,000 (which includes Typenex legal expenses in the amount of $5,000 and a $20,000 original issue discount) (the "TypenexNote") of which Typenex funded $75,000 upon closing. We have no obligation to pay Typenex any amounts on the unfunded portion of the Typenex Note. Additionally, Typenex issued to the Company three notes, aggregating $125,000, bearing interest at the rate of 8% per annum with each note maturing seventeen months from January 7, 2015 (the "TypenexInvestor Notes"). The Typenex Investor Notes may be prepaid, without penalty, all or portion of the outstanding balance along with accrued but unpaid interest at any time prior to maturity. No cash changed hands in exchange for the Typenex Investor Notes. The purpose of the Typenex Investor Notes is to facilitate the timely sale of common stock in the future should Typenex fund the Typenex Investor Notes.
The Typenex Note bears interest at the rate of 10% per annum. All interest and principal must be repaid on June 7, 2016. The Typenex Note is convertible into common stock, at Typenex's option, at the lesser of (i) $5.00, and (ii) 70% (the "Conversion Factor") of the average of the three (3) lowest Closing Bid Prices in the twenty (20) Trading Days immediately preceding the applicable Conversion, provided that if at any time the average of the three (3) lowest Closing Bid Prices in the twenty (20) Trading Days immediately preceding any date of measurement is below $2.50, then in such event the then-current Conversion Factor shall be reduced to 65% for all future Conversions, subject to other reductions set forth in the Typenex Note. In the event the Company elects to prepay all or any portion of the Typenex Note, the Company is required to pay to Typenex an amount in cash equal to 125% multiplied by the sum of all principal, interest and any other amounts owing. The Typenex Note is secured by all of the assets of the Company and includes customary event of default provisions.
Typenex has agreed to restrict its ability to convert the Typenex Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The Typenex Note is a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. The Typenex Note also provides for penalties and rescission rights if we do not deliver shares of our common stock upon conversion within the required timeframes.
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Additionally, the Company granted Typenex six warrants, corresponding to the delivery of six tranches of cash funds, to purchase shares of the Company's common stock, $0.001 par value (the "Common Stock"). The first warrant will entitle the holder to purchase a number of shares equal to $43,750 divided by the Market Price, as such number may be adjusted from time to time pursuant to the terms of the Typenex Note, and the remaining warrants will entitle the holder to purchase a number of shares equal to $13,750 divided by the Market Price, as such number may be adjusted from time to time pursuant to the terms of the Typenex Note. Each warrant is not exercisable until each corresponding tranche is funded.
The Company first allocated between the Typenex Note and the warrants based upon their relative fair values. The estimated fair value of the warrants issued with the Typenex Note was $43,750. Next, the intrinsic value of the beneficial conversion feature was computed as the difference between the fair value of the common stock issuable upon conversion of the Typenex Note and the total price to convert based on the effective conversion price. The calculated intrinsic value was $66,667. As this amount resulted in a total debt discount that exceeds the loan proceeds, the amount recorded for the beneficial conversion feature was limited to $43,750. The resulting $87,500 discount to the Typenex Note is being accreted over the seventeen month term of the Typenex Note.
During the three and nine months ended October 31, 2015, the Company recognized $15,571 and $46,205 of accretion related to the debt discount. No interest expense was recognized as the interest income from the Typenex Investor Notes offset the interest expense from the Typenex Note.
During the three and nine months ended October 31, 2015, Typenex converted $13,965 and $37,226, respectively into a total of 5,973,145 shares of common stock.
Vis Vires Group, Inc. Convertible Note
On June 8, 2015, Artec and Vis Vires Group ("Vis Vires") entered into a Securities Purchase Agreement (the "Vis Vires SPA"), for the sale of an 8% convertible note in the principal amount of $69,000 of which Artec received $61,100 after payment of legal fees (the "Vis Vires Note"). The Vis Vires Note matures in nine (9) months on March 10, 2016. If the Vis Vires Note is not paid upon maturity, the interest rate shall increase to twenty-two percent (22%). The Vista Note is convertible into common stock, at Vis Vires's option, at 58% of the average of the lowest three (3) closing bid prices for our common stock during the ten (10) trading day period prior to conversion. In no event shall Vis Vires effect a conversion if such conversion results in Vis Vires beneficially owning in excess of 9.99% of the outstanding common stock of the Company. The Note and accrued interest may be prepaid from the date of issuance with the following penalties: (i) within 30 days - 110%; (ii) within 31 - 60 days - 115%; (iii) within 61 - 90 days - 120%; (iv) within 91 - 120 days - 125%; (v) within 121 - 150 days - 130%; and (vi) within 151 - 180 days - 135%. Upon the occurrence of a default as described in the Vis Vires Note, the Company shall pay an amount equal to the greater of (i) 150% of the then outstanding principle and interest, or (ii) the "parity value" of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of common stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article 1 of the Vis Vires Note, treating the trading day immediately preceding the Mandatory Prepayment Date as the "Conversion Date" for purposes of determining the lowest applicable conversion price. The debt discount attributable to the fair value of the beneficial conversion feature amounted to $52,378 for the Vis Vires Note and is being accreted over the term of the Vis Vires Note.
During the three months ended October 31, 2015, the Company recognized $1,411 of interest expense and $17,459 of debt discount accretion related to the Vis Vires Note. During the nine months ended October 31, 2015, the Company recognized $2,223 of interest expense and $27,517 of debt discount accretion related to the Vis Vires Note.
If I wanted shares, I would just buy them. This stock is at the bottom. Looking at the toxic debt financing, I can promise you that I don't want these shares.
You say "3s are gone" yet the ask price dropped from .0004 to .0003. The fact is that 3s are very much here because that is where the sellers (dilutors in my opinion) were at the end of the day. Facts are important.
You are right to be skeptical, but something is going on here. The stock just broke through major resistance on minimal volume. Quiet accumulation is occurring. This is a very explosive situation if any positive news is released about winning the appeal or completing a merger.
Up 50%?? That is the difference between the bid and ask, lol.
This is clearly dilution. Look at the 13g filings and you will see that 50 million + shares was given to a toxic financier. You don't trade the float and then have the price go down from the high of the day without massive dilution in my humble opinion.
Good luck to you.
Why dont you quit with the personal attacks and focus on the facts please.
Now 55 million on the ask. There is a big seller, that is clear.
You like stocks that make their move after they break through upper resistance? I have bought some CYIO based on that philosophy (a bit early).
I think once news hits, they break through the upper resistance of .03 and they fly.
CYIO - 16m float; DD indicates merger being delayed bc of SEC issues.
I hope folks put this on their radar. This could be a very nice one.
I see a bunch of shares were given to Vista in the 13g filings. That is quite a bit of toxic finance to deal with imo.
50 million on the ask...looks like an easy double for those who bought at .0002.
Market cap of 1.7 million now, with 5 million in cash. You call that a sinking ship? The patents alone make this worth MUCH MORE than .0008.
Fair enough, have a good night. I don't participate, but I do enjoy the information your board brings.
I think that there were many pumpers who bought SFOR at .0002 who exited today on the 10k. There were many with 30 to 60 million shares. It only takes 20 of those guys or gals to provide that number.
The pumping on SFOR was shameless to watch, but I still think a sub penny with 5 million in cash and prospects is a rare thing to find.
I am not saying the stock value right now is not correct. All I am saying is that I don't think the company is done after this run. For 99.9% of these sub pennys though, I think you would be correct.
I have lots of respect for you, but I don't understand your comments.
They have 5 million in cash because MSFT settled with them on patent infringement.
Google is obviously infringing on their mobile OOBA patent and they will have to pay too.
They have the cash to survive for years so they can't be sent into a toxic finance death spiral.
This is not a typical sub-penny that can be run into the ground.
What am I missing?
I am still up 300%. One thing is sure- I am no trader, lol.
Nice answer dragnet. Google is going to have to pay.