CD International Enterprises Inc (CDIIQ)

[Lonnie Starr]

Yes and if the nature of that debt was toxic, I can believe that it was, after all, pinkies don't get very good loan terms, there are few lenders to choose from. Toxic debt can be far more terrible than dilution, so if they had it on their books, then kudos to them for getting it off. In exchange for a few bad hair days, the co., has actually protected the shareholders.

As the share price rises, the co., will get better terms if they need to borrow, but not with toxic debt threatening to put 5 billion shares on the market should something go wrong. Most especially if they had something coming due before revenues started to flow in January.

Of course they'd be reluctant to announce to the market any plan to dilute, that would defeat the purpose, which is to sell the shares as quickly as possible at the best price to be had. This selling is usually done at the hands of a mm or market consultant/trading outfit who probably advises them to say nothing in advance that could hurt the effort.

We'll see a p/r and/or filing that explains what the trade offs were and why it was decided to do it this way, in lieu of other available options. But these kinds of moves are what you sign on for when you invest in companies that are distressed and pink.