Sanomedics International Holdings Inc. (fka SIMH)

[Homebrew]

SIMH Debt is convertible to 65% of current price. So no matter what the stock price is, the lender gets it for a 35% discount to market price. (simplified explanation). Look at the 8-K to see the specific terms of each agreement.

From a recent 8-K
"All principal and accrued interest on the Debentures is convertible into shares of the Sanomedic’s common stock at the election of the holder thereof at any time at a conversion price equal to 65% of the lowest traded Volume Weighted Average Price price during the 10 trading days prior to conversion."

Here's a snippet from a good article on the topic. (link below)

> An issuer sells convertible securities that allow the holder to convert into common stock at a discount to market, which means the lower the issuer’s stock price falls, the more shares are issued upon conversion.

>The more shares the company issues, the greater the dilution to the issuer’s shareholders will suffer. The issuer will have more shares outstanding, revenues per share will be lower, and individual investors will own proportionally less of the company. While dilution can occur with either fixed or market price based conversion formulas, the risk of potential adverse effects increases with a market price based conversion formula.

> The more shares issued upon conversion, the higher the probability that the issuer’s stock price will decrease. The more the stock price decreases, the more shares the issuer will have to issue for future conversions.

http://www.securitieslawyer101.com/2014/toxic-funding-convertible-securities/

They probably spread the stock sales out a little bit, not dump the entire amount on day 1 at market open.