DCLT is up to their neck in toxic convertible debt notes and floorless convertible debt and floorless convertible preferred Series A shares too!
(1) It is IMPOSSIBLE to know the share structure. The Series A Preferred shares are out and they are FLOORLESS convertibles. Plus there are at least THREE convertible debt notes that are outstanding - one floorless and at least two more that convert at 0.0001 per share!
It is impossible to say how many shares of common a Series A preferred will convert into - and it accumulates 12 percent a year more Series A Preferred as "interest/dividend" every quarter.
The AS is no limit - if there is no headroom to allow full conversion of Series A preferred, then the company will have to raise the AS to accommodate it.
Let's be very clear: IT IS IMPOSSIBLE TO KNOW THE SHARE STRUCTURE OF DCLT BECAUSE THE SERIES A PREFERRED ARE FLOORLESS AND NOBODY CAN PREDICT HOW MANY SHARES THE PREFERRED A WILL BE CONVERTIBLE INTO.Plus there are at least THREE convertible debt notes that are outstanding - one floorless and at least two more that convert at 0.0001 per share!
And furthermore, the Company ain't saying ANYTHING about the Series A preferred or Series B preferred. There is NO identification of who they were sold/granted to. There is no timeline for when they must be converted.
Meanwhile, they pile up at a quarterly compounded rate of a base rate of 12 percent annually (butt compounded quarterly) - quarter after quarter.
And the Company ain't answering inquiries about the two preferred share classes either. Not a peep.
(2) Floorless and 0.0001 Convertible Notes outstanding. Now, in addition to the issue of outstanding floorless convertible Series A preferred shares and the supervoting Series B preferred shares which function as a debt note as well as controlling the corporation -
(a) There are several overdue convertible debt notes with conversions at $0.0001 per share that are outstanding.
From the 2014 10-K on OTCMarkets.com:
Note 10. Convertible Shareholder Notes Payable.
During 2009, the Company received cash in the sum of $50,000 from a shareholder for a note payable at a 10% interest rate. The interest for the note payable has been calculated annually and has been accrued for 2013 and 2012. During 2013, the note payable agreement was amended to include a conversion feature to the Company's common stock at $0.0001 per share. Under ASC 470-50, the amendment adds a substantive conversion option which causes the amended note to be evaluated as a new debt issuance. As the conversion term is considered in the money a beneficial conversion feature was present with a debt discount calculated at $50,000. The debt discount was amortized to interest expense during 2013 due to the note being due at the time of the amendment. During 2013, the creditor sold a portion of his note for $8,900. At the request of the new creditors the Company issued 89,000,000 shares of common stock at $0.0001 in terms with the amended agreement. No gain or loss was recorded on the conversion of debt to equity during the period ending December 31, 2013 as it was converted within the terms of the agreement. The remaining balance due under this note was $40,100 as of December 31, 2014 and $41,100 as of December 31, 2013. As the note is past its due date of January 21, 2013, the note is considered in default.
(Note - that converts to 410,000,000 MORE shares of common stock!!)
(LET THAT SINK IN - DCLT OWES ISSUANCE OF 410,000,000 SHARES JUST FOR THIS ONE NOTE ALONE - AND THEY CAN BE FORCED TO RAISE THE AS AND ISSUE THOSE SHARES BY A SIMPLE COURT ORDER)
(b) Butt wait - there's MORE - ANOTHER different note - FLOORLESS and at a 50 percent discount to market price.
During the quarter ended September 30, 2011, the Company issued a short-term convertible note to a shareholder in the amount of $10,000. The convertible note is due in one year and bears interest of 12%. The interest for the convertible note has been calculated annually and has been accrued for 2014 and 2013. As of December 31, 2014, the convertible note contains a conversion feature at a 50% discount of the 10 day average closing price prior to notice. The note holder agreed that the conversion would not force the Company to issue more shares than allowed under the current capitalization which eliminates the existence of a derivative. (edit- NOTE THIS DOES NOT APPLY FOR THE CONVERTIBLE NOTE ABOVE THAT WILL CONVERT INTO 410,000,000 shares OR TO THE NOTE DESCRIBED BELOW!) The beneficial conversion feature included in the discounted share price of the conversion was found to be immaterial for the years ended December 31, 2014 and 2013. As the note is past its due date of June 2, 2012, the note is considered in default.
(NOTE: as this is FLOORLESS just like the Series A preferred shares, there is NO WAY to ever know the share structure of DCLT - it is unknowable as long as these floorless convertible note and the floorless convertible Series A shares are outstanding.)
Butt wait - there is STILL MORE convertible debt notes outstanding!
(c) Third convertible debt note.
Note 11. Debt Modification and Beneficial Conversion Feature.
During the year ended December 31, 2013, a note payable agreement was amended to include a conversion feature to the Company's common stock at $0.0001 per share. Under ASC 470-50, the amendment adds a substantive conversion option which causes the amended note to be evaluated as a new debt issuance. As the conversion term is considered in the money a beneficial conversion feature was present with a debt discount calculated at $50,000. The debt discount was amortized to interest expense during 2013 due to the note being due at the time of the amendment.
This pennystock is a dilution timebomb - and that's only accounting for the 0.0001 cent and floorless convertible DEBT NOTES.
410,000,000 shares due on just ONE of the three notes - and the other two are (1) a FLOORLESS convertible note and (2) another convertible debt note that converts at 0.0001 per share.
Then we've got the floorless convertible Series A preferred shares that are issued and outstanding too!
