On another note i checked the conversion terms for the convertible and preferred notes regarding to the reverse split. I checked the 2020, 2021 and 2022 filling. I saw no adjustments to the conversion terms. But if you took the 8k for the RS (https://www.otcmarkets.com/filing/html?id=14830518&guid=5_awkKMwM2jpRch)
you found the following:
Also on the Effective Date, all options, warrants and other convertible securities of the Company outstanding immediately prior to the Reverse Stock Split will be adjusted by dividing the number of shares of Common Stock into which the options, warrants and other convertible securities are exercisable or convertible by 100 and multiplying the exercise or conversion price thereof by 100, all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share. If the Reverse Stock Split would result in less than one whole share for the holder, the Company will round such Reverse Stock Split shares to a minimum of one whole share.
But they werent adjusted in the last 10Q 2022:
Convertible notes payable to related parties
On September 1, 2016, the Company entered into, an convertible promissory note with Hypur Ventures, L.P., a Delaware limited partnership (the “Hypur Ventures”) which is a related party pursuant to which the Company to borrow $75,000. The loan was due 180 days from the date of issuance and bears interest at 10% per annum. The note is convertible into common stock at a price of $.05 per share. The note is mandatory redeemable into common stock if the price per share is over $.50 per share during a 10 day period. The principal balance owed on this loan at March 31, 2022 and December 31, 2021 was $75,000 and $75,000, respectively. Upon default, the note bears a default rate of interest of 15% per annum, and if the default has not been remedied within 30 days, the redemption price would be 150% of the principal amount. As of March 31, 2022 and December 31, 2021, Hyper has waived the default provision until further notice.
On October 14, 2016, the Company entered into a convertible promissory note with Hypur Ventures, L.P., a Delaware limited partnership (the “Hypur Ventures”) and a related party, pursuant to which the Company borrowed $100,000. The loan was due 180 days from the date of issuance and bears interest at 10% per annum. The note is convertible into common stock at a price of $.05 per share. The note is mandatory redeemable into common stock if the price per share is over $.50 per share during a 10 day period. The principal balance owed on this loan at March 31, 2022 and December 31, 2021 was $100,000 and $100,000, respectively. Upon default, the note bears a default rate of interest of 15% per annum, and if the default has not been remedied within 30 days, the redemption price would be 150% of the principal amount. As of December 31, 2021 and December 31, 2020, Hyper has waived the default provision until further notice.
F-16
On March 7, 2017, the Company borrowed $100,000 from Hypur Ventures, L.P., a related party. The loan is due 180 days from March 7, 2017 and bears interest at 10% per annum. The loan is convertible into shares of the Company’s common stock at a price of $.05 per share. The loan will automatically convert into shares of the Company’s common stock if the price of the Company’s common stock is over $.50 per share during any ten-day period. The principal balance owed on this loan March 31, 2022 and December 31, 2021 was $100,000 and $100,000 respectively. Upon default, the note bears a default rate of interest of 15% per annum, and if the default has not been remedied within 30 days, the redemption price would be 150% of the principal amount. As of March 31, 2022 and December 31, 2021, Hyper has waived the default provision until January 1, 2022.
As a result for me the convertible features have to be mulitplied by 100 which means they are "extreme" out of the money. But i dont know if this has to be applied to the preffered note or not:
... with a five year term and an exercise price of $0.10, at a purchase price of $0.05 per share ...
The preferred stock is convertible at any time at the election of Hypur Ventures. The preferred stock shall automatically convert to common stock if the closing price of the Company’s common stock equals or exceeds $.50 per share over any consecutive twenty day trading period. The preferred stock terms include a one-time purchase price preference.
If they forgot to adjust the price in the 10Q this would mean the preffered are extreme out of the money too and this would be an explanation why the preffered didnt convert last year as the price was above 50 cents.
Thoughts?
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