Thursday, June 11, 2015 1:23:18 PM
KBM Worldwide 2014 Note 1, KBM Worldwide 2014 Note 2, KBM Worldwide 2014 Note 3 and KBM Worldwide 2014 Note 4 (collectively, the "KBM Worldwide 2014 Notes") are convertible into shares of our common stock based upon a discount to the market price. The conversion terms of these convertible notes are based upon a discount as described above as the "Variable Convertible Price" and, as a result, the lower the stock price at the time KBM Worldwide converts the convertible notes, the more shares of our common stock KBM Worldwide will receive. The number of shares of common stock issuable upon conversion of these convertible notes is indeterminate. If the trading price of our common stock is lower when the conversion price of these convertible notes is determined, we would be required to issue a higher number of shares of our common stock, which could cause substantial dilution to our stockholders. In addition, if KBM Worldwide opts to convert these convertible notes into shares of our common stock and sell those shares it could result in an imbalance of supply and demand for our common stock and resulting in lower trading prices for our common stock as reported by the OTCBB. The further our stock price declines, the further the adjustment of the conversion price will fall and the greater the number of shares we will have to issue upon conversion.
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