EcoloCap Solutions Inc. (fka ECOS)

[deal guy]

The theory is as follows

1) debt converts into equity based on a discount off the current market price (40-60% discount)

2) The debt holder shorts the stock to keep the price as low as possible. The lower the market price the more shares the debt holder gets on conversion. A market price of $.0001 equates to a conversion price of $.00006 (using 40% discount)

3) The debt holder shorts and covers until the latter of the debt conversion date or the date that restrictions on the shares lapse.

4) Not uncommon for the debt holder to use two of its entities and two market makers to execute their short.

Debt Holder Entity 1 uses MM1 to sell shares to Debt Holder entity 2 who uses MM2. At the end of this Step Debt Holder Entity 1 is short ECOS shares and Debt Holder Entity 2 is long shares. A couple of days (or the next day) Debt Holder Entity 2 sells shares back to Debt Holder entity 1. This covers the short and eliminates the long. You then repeat the process to keep the market price low.

If the increase in AS is because of debt repayment they have repaid less than $75k of their debt. I think $50k is debt repayment and the rest is stock sold for operating cash needs.