Well, there it went. As state previously, I just had "that feeling" from past experience. When the bid/ask spread gets real wide, when one starts to see days of what I've called "flat lining"- meaning where it will sit for an hour, sometimes 2 or more hours, w/o a single trade. When the total daily dollar volume drops to like $10K, maybe $12K on some day, the lower highs/lower lows, etc. I just get the "feeling" that one of these days is coming or will come soon.
The problem, IMO, is that it takes just one seller of "size" (there's a ton of warrants out now, "convertible shares", etc just floating/hanging out there and they're "in the money" all the way down to like 1 cent)- and once the vol gets dried up, as in the past few weeks, it just doesn't take much, IMO, to create the scenario of today.
Also, remember, IMO- ASHER and the other "convertible finance" houses may, always, at some point in the future go short. They get more shares on the "conversion", the lower they can make the price go.
A day like today, could be an "ASHER" type, beginning to turn, and "go short' now, IMO. They get their shares at a 45% discount to the 3 trading days, blah, blah, blah. Thus, they actually make more money, when they can make the stock go lower. That's the "toxic" part, in the "toxic convertible financing".
From most recent 10-Q, PAGE 14:
"Asher Notes (During this year)
During the three months ended March 31, 2014, the Company entered into a Securities Purchase Agreements with Asher Enterprises, Inc. (“Asher”) or affiliates, for the sale of 8% convertible notes in aggregate principal amount of $97,500 (the “Asher Notes”).
The Asher Notes bear interest at the rate of 8% per annum. As of the quarter ended March 31, 2014 all interest and principal must be repaid nine months from the issuance date, the last note due December 26, 2014. The Notes are convertible into common stock, at Asher’s option, at a 45% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion."
It's that 45% discount to the average... That's the part that will cause days like this, IMHO. It's called "toxic financing" for a reason.
The other possibility IMO, is it's some more of those "in the money" warrants being unloaded. Remember, many of those warrants and/or shares "given for payment" for all sorts of reasons, have prices from about 1 cent to maybe 1.6 cents. So, they are still making double their money if they unload them in the 2 cent range. Again, problem is, this is so thinly traded once vol dries up, that the minute the unloading starts, there's nowhere near enough buyers to pick up the slack, and down it goes until it finds a "bottom" where people are willing to step in and buy, or the seller gets rid of their position, still at a profit.
Most recent 10-Q, PAGE 23/24 (look at the boat-load of shares issued "as payment" for all sorts of stuff. I did the math on a lot of them, and they work out in many cases to about 1 cent a share. So that person could "flip those shares" and sell at 2 cents, and still be doubling their money- a very possible scenario of today. DILUTION HAS CONSEQUENCES IMO)
"
NOTE 13 — SUBSEQUENT EVENTS
In April 2014, the Company issued an aggregate of 3,839,832 shares of its common stock for services rendered valued at $43,250.
In April 2014, the Company issued 5,263,315 shares of its common stock in settlement of related party advances of $100,000.
In April, 2014, the Company issued 1,002,808 shares of its common stock in settlement of common stock subscriptions of $50,000
In April 2014, the Company issued 274,681 shares of its common stock as settlement of six months accrued interest on the Northstar note obligation.
In April 2014, the Company issued 18,383,774 shares of its common stock for service rendered valued at $180,511.
Lets just do the math on this one as an example: 18 MILLION shares for 180K = 180K/18 million = .01. That's 18 MILLION shares "hanging out there" at 1 cent. If that "whoever they are" -can sell um/flip um, for even 2 cents, they just made about $180K, DOUBLE THEIR MONEY, a 100% return on their money. THAT is how it "works" IMHO. And who even knows what "service rendered" is or means and to who these shares were given?
In April 2014, the Company issued an aggregate of 4,793,268 shares of its common stock in settlement of $67,500 convertible notes payable and $2,700 accrued interest.
In April 2014, the Company issued 11,918,181 shares of its common stock in connection with the exercise of warrants. Proceeds received was $136,000, of which $6,000 during the three months ended March 31, 2014."
Dilution has real world consequences, often dire to the common share price IMO and use of "convertible share" financing, similarly has consequences, often dire, IMO.
AI
