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Wednesday, January 30, 2019 5:59:26 PM
I had talked to Mark about the default and the one time $800k line item. He explained that the default had occurred as a result of their not being enough shares to convert the notes. He also explained that even though the notes weren't due into well into 2019 there was a clause that said they had to maintain a certain number of reserve shares. He said that the majority of this penalty was reversible once the notes were paid or shares were once again made available.
This would have a big effect on the 10-k as the reversal would effectively become a credit on the books. If you look at the result of operations total for the last quarter it was a loss of $759,088. The one time line item, (default penalty) was $793,327. Had that penalty not occurred they would have shown a net income of $34,239.
If it is reversed and the last quarter had the type percentage increase that the third quarter had they may be able to squeeze a slight profit out of 2018. That would go a long way with up list requirements of 2 years net profit.
Like I said I think the authorized will be increased to secure the financing, notes will be eliminated, and the 10-k will be adjusted accordingly.
Makes sense to me.
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