Progressive Care Inc (RXMD)

[Stcgg]

How the RXMD Convertible Bond Works –

Objective:

Getting stock from a company to the financier to the unsuspecting public, while getting money from the unsuspecting public to the financier to the company.

Method:

The company sells the financier a convertible bond in a private placement. The financier sells stock short, until he has sold enough shares to recoup his investment in the bond and make a profit. Then he converts the bond, gets the shares and closes out his short.

Typical Situation:

1. A small troubled public company wants money.

2. All it has to exchange for that money is its own stock.

3. It is shall we say inconvenient for the company to do a regular underwritten public offering of its stock, because such an offering would require a lot of expensive and awkward disclosure of just how troubled the company is, or because it would be hard to find buyers for all that stock at once, or both.

4. And it is not legal for the company to just secretly sell stock into the market without doing a public offering.

5. So it decides to place the stock privately with a smart financing source.

6. It's not like the smart financing source wants the stock either! You don't get to be a smart financing source by buying penny stocks of troubled companies and holding onto them.