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A convertible death spiral is a convertible note without a floor price. Seriously, there is zero incentive for the noteholders to sign anything. This will drag on while the cheerleaders will scream at every uptick how they are making fortunes and you are left holding the proverbial bag.
You clearly don't understand how these death spiral convertibles work. They don't care what the price is. Whatever your buying they are selling. They drive it down. Whatever the lowest price is from the last 10 days they get a 58 percent discount. So their shares are now convertible at .0058 So at 2 cents they are making bank. Even if the price goes down to a penny, they are making money and that would just reset the price of the conversion.
You should definitely be in Cannabis stocks because whatever your smoking must be awesome. The CEO basically admitted that these guys are still converting with no end in sight. How many shares do you think are out there? If this company that was merging into OZOP had a lick of sense they wouldn't be going into a situation where there was a ton of convertible debt outstanding. So how good could this company really be?
let me know how that falling knife feels
yep, I've been calling this a dog since it was two bucks. So yeah I've got a lot to learn. I'm sure this will pop up to three or four cents and you'll claim you made a fortune. Yet it looks like its ready for subpenny action. New conversion price is set at .006. Every 1000 bucks converts to over 1.4 million shares.
How much they paying to you post nonsense. You have no evidence or proof this company has done anything they have said. We have no information on the revenues or profits of the company being acquired. Its all smoke and mirrors right now. Until we actually see audited figures from the acquisition, we don't know if we have a raging fire or a nice BBQ. The stock is trading nearly its reported shares outstanding everyday, moving lower each day. Does that sound like good news on the horizon?
Well that is part of my point. After the guy tweeted out that there was some sort of agreement the stock ran up. Yet, no news. No 8K. Just massive selling. One would believe that the lock up is not a lock up until we have an actual announcement.
This discounted paper would have to be at a conversion better than 58% discount because that is what they get right now. Considering all the pumping that the company is doing, the noteholder are making way more than 58% per conversion. Look at the volume. If you think there are only 5 million shares issued you'd have to be out of your gourd. If the company has converted debt they are required to issue an 8K I believe within 10 days of the issuance. Again this is a penny stock so that sort of stuff just goes by the wayside. We still don't know how it got to 5 million. Based on today's trading, the conversion price would again be a sub penny.
Actually I went to their website and there was no information about that either. I then had to search twitter where I found a post stating the info you posted. There is no information on their website that lets shareholders know that they can receive information via twitter. This is a violation of Regulation FD. The regulation explicitly states that if a corporation is going to use social media as a platform to disseminate news information it must inform shareholders of how they can receive that information. There has been no such disclosure. Of course this is a penny stock so FINRA and the SEC won't give a damn. It won't be until this person does this five or six more times that they will suddenly jump in. Does this stock look like its trading with its convertible holders locked up?
How did you come about the information that the debt was locked up? Clearly it isn't since they've now just added 8x the number of shares from a week ago. Based on the significant volume, they'll be blowing out more and more shares as debt holders are laughing all the way to the bank. The million share filer, probably paid $10,000 for those shares now worth 90K. How long you going to hold that kind of gain in this market. Keep shoveling.
Exactly. You had the CEO saying oh we are going to be doing big things just you wait. This is typical reverse split and reverse merger BS. If the shell is garbage anything going into it is going to stink. Doesn't matter how much deodorant you put on, if you jump into a loaded dumpster, you end up trashy. I've heard people reference PCTI in another acquisition attempt, prior to ELTZ. Does anybody have info on that. Either way, the company is non responsive to inquiries. A colleague had reached out to them to offer assistance at no cost, they got no reply. I feel bad for anyone who jumped on this horse because they saw the RS and then the merger bump.
I find it hard to believe that any of the lenders would agree to be bought out except at double their current holdings value. Right now they can convert at 1c so every share they sell right now is a double. So what is their incentive to get out. You know they've been converting this entire time so it begs to question, how many more shares has the company issued since doing the 1/1000 reverse split? is it millions? The idea that because many are in NY that its slowed this down is BS. These guys all have phones. They are still working. I'm guessing several basically work from their house anyway.
its hilarious that you think these are regular shorters. These are the noteholders. They get all their shares at 58% discount to the lowest traded price, so 58% of 2c is their conversion price currently. With volume increasing they shorting by convertible noteholders will accelerate. This will again be sub penny standing soon enough.
Just remember that low means that the next conversion will now happen at .0232 per share. I wonder how many shares they sold at 20 cents and higher. This is a suckers bet that gets worse by the minute. That million dollar debt now converts to 50 million shares.
He's part of the problem, not the solution. The stock is now approaching its 52 week low. Traded the pre split equivalent of 420,000,000 shares. Almost the entire float, which we know isn't the entire float, because of the never ending supply of convertible shares out there. Without a floor on the notes, there is no incentive for these folks not to short as much as humanly possible. Its lather rinse repeat until this is a sub penny again. Nothing they can put out will stop it.
You're only partially right. Under the convertible note, the noteholders are not allowed to exceed 4.99% shareholdings. The note may have anti shorting language, but these guys use a different entity to do that. So with four or five different entities holding shares you are going to see a lot of selling because they know that they are going to get shares at 8% of the lowest traded price in the previous 10 days. The company still will have to settle the 600K debt it owes. So since the company did the reverse they have already almost tripled their shares. Since OZOP takes the maximum amount of time to file its 8Ks you'll see one eventually with more share issuances,
And if a convertible noteholder put in a sell for 50,000 shares it will drop to a penny. Whats the more likely scenario?
I believe the number of shares outstanding at the time of the RS was 253,000 shares. Last week the stock I believe touched 9 cents so any conversions will be done at 5.22c This massive premerger/LOI pump is only making these guys extremely well off for such a tiny investment. I wonder how much was converted at that price. Were they told that this deal was happening. What happens to the great OZOP assets that were in the company, will they revert back to Chermak so he can roll this out again? Why would a 28 year old successful company merge with such dreck? Makes absolutely zero sense to do this deal. If the company were that stellar they could have filed an S-1 and gone public that way or found a much better vehicle. Considering how well the last transaction that PCTI was involved with went, I'm not expecting a heckuva lot.
Railroadman,
They have only settled one lawsuit. The BS suit by Cambridge Researh which was filed in conjunction with the short attack. That firm own a few shares and even bought more after the price had conveniently gone down. Their case had zero merit and it would have cost both parties, much more than it was worth to win.
Research report available on SDIG http://carpedmstocks.blogspot.com/2015/03/sdig-research-report-buy-recommendation.html
www.stationdigital.com is now live!!! tell all your friends! Word of mouth is the best advertising so sign up. I have.
Trading has been sporadic. Everytime someone moves in to buy a whole bunch of sells comes along. Guys are sitting waiting to get their bids hit rather than chase the ask and have it drop back down once they are done
App will soon be available on Amazon FireTV. Press release is here.
http://carpedmstocks.blogspot.com/2015/02/sdig-stationdigital-app-to-be-available.html#!/2015/02/sdig-stationdigital-app-to-be-available.html
Here are couple of new things from Station Digital.
Is anyone following $SDIG? There is a great interview/presentation done by the CEO here http://carpedmstocks.blogspot.com/2015/01/sdig-awesome-online-interview-and.html#!/2015/01/sdig-awesome-online-interview-and.html
It has the potential to be the next netflix or pandora. Still very early and doesn't trade very much at all.
Here's a link to a great interview that the CEO just did. Check it out. http://carpedmstocks.blogspot.com/2015/01/sdig-awesome-online-interview-and.html#!/2015/01/sdig-awesome-online-interview-and.html
They could have done it before this happened. Did they ever disclose that this was even a possibility? I don't recall and now will have to go through the filings to see. If you knew that this could happen, I would have thought you would do whatever you can to mitigate it and avoid it from going to the Sale. Does anybody know when the sheriff sale is to take place?
I can't wait to see what kind of financing this group puts together. Its going to be a real doozy. No chance they give SFMI any breaks. Too bad they couldn't try and leverage the tailings or some of the equipment. What a disaster this has turned out to be. Live and learn
They need cash to operate, this is somewhat akin to an equity line and if you are a shareholder you can forget seeing any kind of return. The second they initiate a put KVM will start shorting the stock. They get the stock at a 22% discount to the average of the three lowest bids. This company will basically be paying the salaries of who remains and that's it. The CFO just resigned, so how many are left. Totatl joke operation. Bet they see zero sales from Brazil, but I am hopefully wrong.
There have been a number of needlefree injectors developed over the past 15 years and none have ever made an impact. A lot will depend on cost. Doctors and nurses don't really care whether they give a needle or not because they aren't the ones getting it. You aren't going to the doctor based on whether or not he's using one of these devices. Are they nice, sure. Will they sell, possibly with enough marketing money behind them. Another issue will be cost per injection. Standard syringes are very cheap. In the current dosages that this can dole out, it better come in at around 10-12c per "shot" otherwise it will have little to no impact. Diabetics may be their best potential market, but with pen injectors most insulin users don't notice the pain with a syringe anymore. I once got an injection with the Bioject device, it still hurt.
thats because they are typically run by ego centrics who wouldn't take advice when offered by someone who knows better. The financings they have done will kill the price of the stock so badly it won't be funny. They took JMJ to task, but they are princes compared to whom they got in bed with.
True enough but thats because the CEO runs this like its his kingdom and doesn't really care what happens to the stock. As long as he gets his in his book everything will be ok. He's the controlling shareholder. How he managed that I'll never know. He has no experience selling a product and I am not sure that even the Brazilian deal is real. His product still should need to get their approval, but there was no mention of that. Also, if you do an internet search of the company he did the deal with you can't find it anywhere, well at least I can't find it. You have distribution deals with McKesson and Cardinal, but you have to sell these things. McK and Cardinal aren't sales people, they are order takers. Its a major opportunity lost and one that someone who is shrewd enough will exploit when this hits a subpenny.
Silvergun, did you see that the CEO has zero belief in this too now? He sold almost 200K shares. Stock is going to be a subpenny soon enough because they don't have anyone who knows the medical field running this ship. Its a shame because their product could have a market in the US.
Silvergun, you obviously don't know how asher operates or TCA or any of these guys. You'll know exactly when they plan on converting because the stock is going to go down on big volume. They presell into the market lock in their gain and hope that the selling triggers a massive fall. The collect any extra shares and sell those too. Then they continue to do it at ever lower prices creating massive dilution. I saw one 15c stock go to a penny because they took 50K from TCA. For someone who claims to have worked on the Street like their CEO has, he's taken the worst money you can get. Also, is the syringe approved in Brazil? They have a very tough medical governing body. They are modeled after the FDA. I can't find this company that they did the deal with on the Internet either. For a purported big medical distributor hard to believe there are no internet references at all, except for this news announcement. The did almost no sales in the latest quarter because they don't have any budget to market. They aren't going anywhere with the current team in place.
Here's from the most recent 10Q they are dealing with the worst of the worst. Had they gotten proper advice from an investment bank they would have known this was a bad deal. However, the CEO is a bit too arrogant. They did 1300 bucks in sales for the quarter even though they have both Cardinal and McKesson as customers. Its because they have no sell through. Do a google search on the Brazilian company see what you can find. This is going subpenny as soon as they start to convert.
NOTE 7 – CONVERTIBLE NOTES PAYABLE
At March 31, 2013 and December 31, 2012, notes payable consisted of the following:
March 31,
2013 December 31,
2012
Convertible Promissory Note Payable to JMJ Financial, unsecured, one time interest charge of 8%, due on February 22, 2014 $ 191,663 $ 191,663
Convertible Promissory Note Payable to Asher Enterprises, unsecured, interest rate of 8.0% per annum, with payment due on March 21, 2013, fully converted in January 2013 - 7,500
Convertible Promissory Note Payable to Asher Enterprises, unsecured, interest rate of 8.0% per annum, with payment due on May 10, 2013 - 42,500
Convertible Promissory Note Payable to Asher Enterprises, unsecured, interest rate of 8.0% per annum, with payment due on August 27, 2013 42,500 42,500
Convertible Promissory Note Payable to Asher Enterprises, unsecured, interest rate of 8.0% per annum, with payment due on December 6, 2013 42,500 -
Convertible Promissory Note Payable to Carebourn Capital, L.P., unsecured, interest rate of 8.0% per annum, with payment due on December 19, 2013 60,000 -
Convertible Promissory Note Payable to TCA Global Credit Master Fund, LP, secured by all of the Company’s assets, interest rate of 12.0% per annum, with payment due on January 3, 2013 34,325 62,165
Convertible Promissory Note Payable issued in the course of a private placement to individuals, unsecured, interest rate of 8.0% per annum, with payment due on June 26, 2013 75,000 100,000
Total 445,988 446,328
Less: debt discount (218,097 ) (229,573 )
$ 227,891 $ 216,755
Asher Enterprises
On February 28, 2013, the Company issued a convertible promissory note to Asher Enterprises for proceeds of $42,500 in cash (“2013 Asher Note”). The note was convertible to the Company’s common stock at a conversion price equal to the greater of (1) 55% multiplied by the average of the lowest 3 trading prices for the Company’s common stock during the 10 trading day period ending on the latest complete trading day prior to the conversion date market price and (2) a fixed conversion price of $0.00009 per share. The Company analyzed the conversion feature of the 2013 Asher Note for derivative accounting consideration and determined that the conversion feature for the 2013 Asher Notes does not qualify for accounting treatment as a financial derivative. The 2013 Asher Note has a beneficial conversion feature discount of $42,500, within which $4,143 has been amortized. During the three months ended March 31, 2012, the Company also recorded interest expense of $44,385 related to the amortization of debt discount on notes issued in 2012 to Asher Enterprises. At March 31, 2013, there was $60,902 of unamortized discount related to the unconverted Asher Notes.
During the three months ended March 31, 2013, Asher Enterprises converted principal of $50,000 with accrued interest into 1,166,657 shares of the Company’s common stock.
TCA Global Credit Master Fund, LP
On January 3, 2012, the Company entered into a securities purchase agreement with TCA Global Credit Master Fund, LP (“TCA”), pursuant to which, TCA would purchase up to $2,000,000 of the Company’s common stock. The Company agreed to pay a $100,000 facility fee by issuing to TCA a number of the Company’s common shares (“facility shares”). To determine the number of shares issuable to TCA for the facility fee, the Company’s common stock was valued at a volume weighted average price at January 2, 2012. The facility shares should be adjusted 9 months after January 2, 2012 by the volume weighted average prices of the Company’s common stock 5 trading days prior to the revaluation date. On August 13, 2012, the Company and TCA agreed to terminate the committed equity financing agreement based on the Company’s failure to achieve bulletin board listing as required under the agreement. The Company has issued 559,268 common shares in 2012 to TCA which only satisfied $51,924 of the facility fee upon revaluation. As of March 31, 2012, accounts payable included $48,076 for the remaining payable to TCA related to the facility fee.
F-12
--------------------------------------------------------------------------------
In connection with the securities purchase agreement with TCA, the Company issued a convertible promissory note to TCA for a principal amount of $225,000 (“TCA Note”). The note bears interest at a rate of 12% per annum and provides for the payment of all principal and interest 12 months from the date of the note’s respective issuance. The conversion price was determined by multiplying 95% by the average of the two lowest daily volume weighted average prices of the Company’s common stock on the OTC Markets during the 5 business days immediately preceding the date of conversion. The Company analyzed the TCA Note for derivative accounting consideration and determined that the TCA Note qualifies for accounting treatment as a financial derivative. The conversion feature of the TCA note was valued at $174,448 on the issuance date and recorded as debt discount which was fully amortized in 2012.
TCA converted principal of $27,840 into 300,000 shares of the Company’s common stock on January 3, 2013.
JMJ Financial
On February 22, 2011, the Company issued a $1,050,000 convertible promissory note to JMJ Financial, Inc. (“JMJ”). The note bears interest in the form of a one-time interest charge of 8%, payable with the note’s principal amount on the maturity date, February 22, 2014. The note is convertible to the Company’s common stock at a price equal to 70% of the average of the 3 lowest closing prices of the Company’s common stock in the 20 trading days prior to the conversion date. In connection with the note, the Company entered into a registration rights agreement with JMJ to provide JMJ registration rights for common shares underlying this note. The note will only be funded when the conversion price calculated on each payment date is equal to or greater than $0.015 per share and there are sufficient shares remaining in the registration statement. During 2012, JMJ converted $15,498 under this agreement into 180,000 shares of the Company’s common stock. The principal amount owed to JMJ at March 31, 2013 and December 31, 2012, is $191,663 and $191,663, respectively, from the $1,050,000 convertible promissory note. The Company analyzed the JMJ note for derivative accounting consideration and determined that the note qualifies for accounting treatment as a financial derivative and recorded an initial discount of $450,000 on the issuance date. During the three months ended March 31, 2013 and 2012, the Company recorded $19,726 and $19,726 of interest expense related to the amortization of the debt discount. At March 31, 2013 and December 31, there was $86,965 and $106,691, respectively, of unamortized debt discount related to the JMJ notes.
The Company is currently in litigation with JMJ. See Note 11.
Individual Convertible Notes Payable
During 2012, the Company issued 22 convertible notes payable to individuals for proceeds of $956,501 in cash (“Individual Convertible Notes”). The Individual Convertible Notes mature one year from the date of issuance. Interest accrues at the rate of 8% per year on the outstanding principal amount to be paid at maturity.
The principal amount of the Individual Convertible Notes and accrued interest are convertible into the Company’s common stock at a conversion price equal to 75% of the average of the daily volume weighted average prices of the Company's Common Stock during the 5 trading days immediately prior to the conversion date, provided that in no event, shall the note holders convert any portion of the Individual Convertible Notes when the sum of 1) the number of shares of common stock beneficially owned by the holder and its affiliates and 2) the number of shares of common stock issuable upon conversion would result in beneficial ownership by the holder and its affiliates of more than 4.99% of the Company’s outstanding common shares. During 2013, $25,000 of the Individual Convertible Notes with accrued interest were converted into 353,727 shares of the Company’s common stock. The Company reclassified the $25,000 to stock payable as such shares have not been issued. As of March 31, 2013 and December 31, 2012, Individual Convertible Notes includes principal of $75,000 payable to Vincent Olmo, the Company’s COO, with a debt discount of $24,041 and $42,534, respectively.
In connection with the issuance of the Individual Convertible Notes, warrants to purchase 3,826,005 shares of the Company’s common stock at $0.25 per share (“ $0.25 Warrant”) and warrants to purchase 1,913,003 shares of the Company’s common stock at $0.50 per share (“$0.50 Warrant”) were issued to investors. The warrants have a term of less than one year and original expire during December 31, 2012 and June 30, 2013.
$347,097 of the proceeds received from the Individual Convertible Notes was allocated to the warrants based on a grant date fair value of $589,416 calculated using a Black Scholes Model with the following assumptions: (1) 3.9% risk-free discount rate, (2) expected volatility of 155.60 ~218.64%, (3) $0 expected dividends, and (4) an expected term of 0.3~1 years based on the term of warrant.
F-13
--------------------------------------------------------------------------------
On March 1, 2013, the Company extended the expiration date of the $0.25 Warrant to June 30, 2013 and the $0.50 Warrant to September 30, 2013. Warrants to purchase 2,859,008 shares of the Company’s common stock originally expired on December 31, 2012 were reissued to the note holders. The Company recorded $148,127 modification expense related to the extension.
The Company analyzed the Individual Convertible Notes for derivative accounting consideration and determined that the conversion feature of the Individual Convertible Notes qualify for accounting treatment as a financial derivative. The conversion feature of Individual Convertible Notes was valued at $777,766 on the issuance date. As a result, some of the Individual Convertible Notes were fully discounted and the fair value of the conversion feature in excess of the principal amount allocated to the Individual Convertible Notes of $182,733 was expensed immediately as additional interest expense. During the three months ended March 31, 2013 and 2012, the Company recognized $32,671 and $142,075 of interest expense related to the amortization of the debt discount. At March 31, 2013 and December 31, 2012, there was $24,041 and $56,712 of unamortized discount related to the Individual Convertible Notes, respectively.
Carebourn Capital
On March 19, 2013, the Company issued a convertible promissory note to Carebourn Capital for proceeds of $60,000 in cash. (“2013 Carebourn Note”). The note was convertible to the Company’s common stock at a conversion price equal to 55% multiplied by the average of the lowest 3 trading prices for the Company’s common stock during the 10 trading day period ending on the latest complete trading day prior to the conversion date market price. The Company analyzed the conversion feature of the 2013 Carebourn Note for derivative accounting consideration and determined that the conversion feature for the 2013 Carebourn Notes does not qualify for accounting treatment as a financial derivative. The 2013 Carebourn Note has a beneficial conversion feature discount of $49,091, within which $2,142 has been amortized. At March 31, 2013, there was $46,949 of unamortized discount related to the 2013 Carebourn Note.
Read the 10K. Page 34
The Company entered into six new securities purchase agreements in 2012 with Asher Enterprises, Inc. (“Asher Enterprises”), pursuant to which the Company issued convertible promissory notes to Asher Enterprises for an original principal amount of $46,000 on February 10, $42,500 on March 20, $53,000 on May 15, $42,500 on June 21, $42,500 on August 10, and $42,500 on November 27 in return for aggregate gross cash proceeds of $269,000. The notes bear interest at a rate of 8% per annum and provide for the payment of all principal and interest 9 months from the date of the note. The principal amount owed to Asher Enterprises at December 31, 2012 is $92,500. The note is convertible at the election of Asher Enterprises into that number of shares of the Company’s common stock. The conversion price equals to the greater of 1) 55% of the average of the lowest three closing bid prices of the Company’s common stock on the OTC Markets during the 10 business days immediately preceding the date of conversion, subject to adjustment and 2) 0.00009. Over the course of the year, Asher elected to convert a total of $357,000 in principal from the notes issued on July 26, 2011 for $40,000, September 1, 2011 for $45,000, November 7, 2011 for $42,500, December 19, 2011 for $53,000, February 10, 2012 for $46,000, March 20, 2012 for $42,500, May 15, 2012 for $53,000 and June 21, 2012 for $35,000. The June 21, 2012 note still had an outstanding principal balance of $7,500 as of December 31, 2012.
The notes issued by Asher Enterprises in 2012 contain a beneficial conversion feature with a minimum conversion price of $0.00009 and no adjustment due to dilutive issuance. As a result, these notes were not bifurcated and valued with an embedded call option. The beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid-in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
Unfortunately they have a lot of loans out to Asher and that is going to drive this one down into the dirt.
Anybody know why DTC put a chill on this stock and does anyone know how to trade it?
Clearly you've never done business with either Cardinal Health or McKesson. They produce a catalog and unless the company is out pushing their product nothing will get sold. They'll take an initial stocking order and it will just sit there. How long will it be before we see the 10K?