Ok, let's work through this...because MYDX absolutely does NOT have $6.6m in debt. And...I will be the FIRST one to say that it is tricky, hard to understand, and is causing a lot of angst among shareholder (current, past and prospective).
The overwhelming chunk of what you're seeing is "derivative liability." DL is the cost of issuing the derivative debt from Q3-16 through Q1-17. These costs include fees, interest, legal, points...all the normal stuff. But the biggest (BY FAR) component is the difference in stock price between market value, and the underlying liability that was settled with the stock. So if stock price was .01, and we issued a million shares (1m x .01 = $10,000) to settle $6,000 in debt, then we account for the extra $4,000 by calling it DL. That DL piles up on the balance sheet until the underlying liabilities are FULLY SETTLED (that part is important).
Once the DL is fully settled, it is moved from DL to DL Expense on the P&L. That's why in Q4-16 it looked like MYDX lost 16m for the year. It wasn't cash expenditures...it was the value of the diluted stock that finally settled and fell to the bottom line.
That's also why the company lost a ton of money but was still cash flow positive in Q1. They were paper losses for the company (but real losses for the shareholders...coming up in a paragraph or two). The company showed a loss as it was cleaning up the aftermath, but the cost was stock not cash. Therefore there was no cash outflow, therefore Q1-17 was Cash Flow Positive.
The bad news: It falls to the bottom line, and shows that the company lost money.
The good news: DL is IN NO WAY a liability that will need to be paid with cash. Think of it as already having been paid for, in the form of diluted share prices over the life of the underlying liabilities. So anyone that was a shareholder in that period, and who saw all of the dilution happening, was paying for the DL that you're seeing on the balance sheet.
If you read the Q closely you'll see that payments in the china situation are being disputed. Therefore they haven't settled. Therefore the DL associated with that deal is still on the balance sheet. My guess (only a guess) is that a lot of the remaining DL relates to the China mess.
Let me know if I can help clarify further.
