Yes there are restrictions as to when they can convert (no filing is required prior to conversion from F to common - it will be disclosed after the conversion took place) and how quickly they can dump (based on average volume over a period of time).
Suffice it to say:
IR issues capital to PSID in exchange for Series F stock.
Series F stock can be converted to common shares whenever IR feels like doing so. We get notified after the fact. They are only limited in terms of how high they can turn on the spigot based on daily volume over a small period of time.
Series F converts to common at 30% below market.
The value of the series F stock accrues interest around 8%
The company cannot pay the interest, so,
This debt is paid in additional Series F stock which is also convertible into common stock.
Sans revenue, what you wind up with is death by 1000 cuts. It is a slow, painful death. It is reflected in the chart.
And the lower the SP, the dilution accelerates.
That doesn't account for all the other printing presses being run for executive compensation, stock promotion services, Etc.
Listen, it's a necessary evil. The company does not have any other options. If they really had a killer product that excited the street, there would be hedge funds and institutional investors clamoring for shares via private equity deals at increasing prices.
Instead we are stuck with what the street calls a 'death spiral CD'
It really doesn't matter to me if this does not make sense to you, or if you disagree.
Good luck. You'll need it.
