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Same thing isn't it? I focused on the mechanism, while you focused on their reasons for doing it. Either way, these guys have proven themselves to be gigantic assholes who could care less about the shareholders who enabled their paydays.
It's StreamTrack's convertible debentures that's got us to where we are today... an OS over 1 Billion shares and an "Unlimited AS".
Who in their right mind is going to buy them?
AIMO,
Interesting... I wonder who unloaded 11 million shares today (Form T showing up on Level 2) at .000099? I didn't even know that was possible.
I'm afraid you might be right Snizzle.
Ok, who here has a clue on why they chose to vote in unlimited shares as oposed to a reverse split? What's the benefit to Hill and the company if no one believes there's any value in the shares? What financiers would give him more money, toxic or otherwise, if no one will buy the stock when they try to sell? Is this an attempt to make the existing toxic financiers to go away? Or, does Hill imagine peeps will continue to buy shares as long as they know what the current OS is?
None of this makes any sense to me. Help please!
Admiral... what's the name of Hill's other company/ stock?
Mmmmm... an after hours Form T trade of only 2 million shares at .00018 makes me think all the bids we've seen on L2 were and are total BS.
What happens then? All the Buyers/ MM are staying at .0001 hoping to get the best share price and possible outcome if and when there's another run.
I'm not sure I agree Admiral, based on explanations such as this...
But why bid so many at .0001? No market maker is going to fill that.
Admiral... Ok, I need you to help explain that one. If I understand you correctly, you are implying the derivatives liability is the result of some sort of transfer of unregister shares. However, wouldn't Hill have had to note the transfer of the shares, within an 8K filing, under Rule 145 before entering them as a Derivatives Liability?
I have no idea.
Not true. Please refer to FASB ASC 815 — Derivatives and Hedging.
What has happened here is the number of shares of STTK's common stock, that is issuable upon conversion of various promissory notes and warrants, exceeds the Company’s maximum number of authorized common shares. Since the number of shares of common stock issuable as debentures would exceed the Company’s authorized share limit, the equity financing environment is compromised, and all additional convertible debentures and warrants have to be accounted for on STTK's Balance Sheet as a derivative liability.
Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued are recorded as derivative liabilities on the issuance date. But... and here's the important part... no cash or other asset liability is implied by the Derivative Liabilities. It's really more a measure of the company's Liability Risk from the convertible debentures.
And, this certainly could be the reason why the company wants to increase the A/S to "unlimited". Once approved, they can continue to cover their derivatives liability, for as long as there are shareholders who believe the company's business model is working.
This could not be done in the last 10-Q, as the company did not have the legal means to increase the A/S. That is what they are asking for now.
All in my opinion... after more than a bit of research on the applicable accounting rules.
Whisky Lullaby... that's a terrible analogy Admiral.
Who's the guy? Who's the girl?
Admiral... this part I'm confused about. Why would Hill manipulate the price down before allowing another round of dilution? Wouldn't he prefer to start from a higher PPS in order to get a better price per share? Plus, the would reduce the number of shares STTK's funders require to get paid back.
And, even if STTK were only set up to sell lots and lots of shares, they could still issue more convertible debentures in future rounds... and presumably make higher rates of return and overall income from a higher PPS.
Please help me understand what Hill's motivations would be to see a reduction in share price before their funders' convertible debentures are issued. I don't understand that.
Thanks,
No, so that he can give the Shareholders chance to profit.
Yes, I believe that's true.
Now who does that make sense too? Of course we want another PR, and another, and another... etc.
Wow... that's interesting! So the cost basis of Pandora goes up, as RadioLoyalty doesn't have those costs... since they recast content from other providers who bear those costs.
My guess is the same reason many new retail stores and restaurants have their "Big Opening" after they actually open.. it gives them time to work out bugs in their business before attracting a large number of customers.
I don't know much about this rule. But, a reverse split would definitely make it hard to comply. So would huge dilution from the funders, should they choose to convert their shares. Overall, it is new territory. Maybe in the end it will help reduce some of the nonsense we've seen with this stock.
You're too funny! Weren't you just telling us how they were going to buy Apple?
Cajun, that could be true too, as they mention their strategy in the Schedule 14a - Proxy Statement should the company come under attack from a hostile takeover:
It's not my job to speak for CEO Hill... so here are his words from the recently published Schedule 14a:
I think it's possible that all this recent maneuvering by Hill is to prevent the need to go through a reverse split. But, that's just a hope and an opinion on my part.
Continuing my research, here's some more information on FASB Accounting Rules governing reporting of Derivative Assets and Liabilities that are associated with Convertible Debentures.
The following sections from the FASB Accounting Rules on Convertible Debt paper tells us everything we need to know about why the company had to show the ~$5 million in Derivatives Liability... and how that $5 million figure can be reduced and extinguished over time.
More importantly, the paper makes it clear the accounting of fair value interest expense for Convertible Debentures does not in of itself change the material value of the company, or its share price, or its borrowing costs.
True... and I think that's a valid comment Admiral. I just don't see anyone changing their positions on this stock until we hear from the company again. But, I don't expect to hear from the company until they get their A/S increase request approved.
There is definitively some settling that has to happen here before we know what we really have.
Nope, not true. Please refer to FASB ASC 815 — Derivatives and Hedging.
What has happened here is the number of shares of STTK's common stock, that is issuable upon conversion of various promissory notes and warrants, exceeds the Company’s maximum number of authorized common shares. Since the number of shares of common stock issuable as debentures would exceed the Company’s authorized share limit, the equity financing environment is compromised, and all additional convertible debentures and warrants have to be accounted for on STTK's Balance Sheet as a derivative liability.
Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued are recorded as derivative liabilities on the issuance date. But... and here's the important part... no cash or other asset liability is implied by the Derivative Liabilities. It's really more a measure of the company's Liability Risk from the convertible debentures.
And, this certainly could be the reason why the company wants to increase the A/S to "unlimited". Once approved, at least as I understand the rule, STTK can increase the A/S when and as required to accommodate the converted notes, which would effectively eliminate the derivative liability.
This could not be done in the last 10-Q, as the company did not have the legal means to increase the A/S. That is what they are asking for now.
All in my opinion... after more than a bit of research on the applicable accounting rules.
I'd be pretty much right there with you two... along with a coupe of other die hard longs on this board.
Now who does that make sense to? Really? The share price can't go much lower. The company still has its browser and mobile radio products. Still has revenues. Still continues to reduce costs. Still has top tier advertising partners and more than 5000 participating radio programs. IMO, this company's share price will rebound.
In the meantime, we can't buy in any lower than the prices are now. So, I'm holding long.
This piece of the Definitive 14a gives some hope... though we will have to see whether Management really is able to maintain any control over the "conversion of outstanding convertible notes and exercising of outstanding warrants" that would raise the company's O/S.
I don't pretend to understand what's going on... but I find three seemingly disparate things discussed in the definitive 14a to be interesting. Perhaps they are more integrated than they are telling us.
First, the company is asking shareholders to allow the company to increase the A/S to an unlimited number of shares. That will allow the company to continue its debt-based financing, so long as there are investors will to buy shares.
We know they are approaching the limit of the A/S, so raising the A/S in and of itself is not surprising... it's just the unlimited part that is surprising.
Second, in the event the company is purchased with "Qualified Financing" of at least $5 million, its very clear that Gravitz and Hill will retain 51% ownership of all common shares. In other words, they retain majority interest in the company in the event of a sale of the company.
Finally (third), the following statement, as I read it, says - in the event of a Qualified Financing" purchase of the company, Hill and Gravitz would have the votes (51%) necessary to approve the sale of the company... not to mention the 51% of the funds received from the sale of the company.
For a classic "Pump and Dump", they sure haven't been very good at the Pump.
For example, in the past year, there have been exactly 26 STTK Headlines posted on Yahoo Finance... but 14 of those news releases were announcements of STTK's SEC filings, 5 reported summarized financial and product use metrics that were already contained in their related SEC Filings, and the remaining 8 were product or business related announcements.
They need to go back to "Pump and Dump" school, as they aren't very good at Pumping this stock. They should probably go to the same schools that the marijuana companies go too, as I see PRs from them nearly every day.
Excellent point. Thanks deddhedd.
What's the most you can write off in a year? I think it's only $3K... is that correct?
I'm 100% with you on this Snizzle. Let the shorters play whatever games they will... I'm not selling.
For sure, I'm not selling any of my STTK shares until the next 10-Q. I feel like there's nothing to lose by holding... and a lot to lose by getting out... as some would suggest we do.
AIMO,
A trade volume of 8.16 million shares today is hardly relevant when we compare the number of days we had as many as 50 to 100+ million shares traded over the past few weeks. Sounds like to me more people are still taking a wait and see attitude.
AIMO though,
Sure is a crap load of bids on L2 at .0003... nearly 35 million. All the flippers waiting in line to load back up.