Read the 8K from Dec 15 relating to the agreement between Andalay and Southridge. It was up to Chan to protect Andalay from the type of financing that was at the root of the earlier problems with Southridge.
"The kind of financing at issue, since discredited, goes by the telling name of “death spiral preferred.” It worked like traditional convertible securities, except that the conversion price was a movable goalpost. The more the stock went down, the more shares the owner of the convert could claim on converting."
from the 8k
"Section 4.3 CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of 500,000,000 shares of Common Stock, $0.001 par value per share, of which 274,564,124 shares were issued and outstanding as of December 10, 2014, we have authorized: (i) 2,000 shares of Series A Convertible Preferred Stock, par value $0.001, (ii) 4,000 shares of Series B 4% Convertible Preferred Stock, par value $0.001, (iii) 1,175 shares of our Series C 8% Convertible Preferred Stock, par value $0.001 and (iv) 1,180 shares of our Series D Convertible Preferred Stock, par value $0.001, none of which remain outstanding at December 1, 2014.
Except as otherwise disclosed in the SEC Documents or on Schedule 4.3 , there are no outstanding securities which are convertible into shares of Common Stock, whether such conversion is currently exercisable or exercisable only upon some future date or the occurrence of some event in the future.
All of the outstanding shares of Common Stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. "
