Okay Dewy... I’m going to try this one more time then I give up:
You loan Steve Berman $10,000.00 in a high risk loan.
He agrees to pay you 12.99% interest on the loan.
He also agrees to issue you $10,000 dollars in Convertible Notes. These notes, upon maturity are convertible to shares at a 50% discount to the lowest of the prior three trading days after the Notes have matured.
Let’s say 6 months is the maturity date.
Fast forward 6 months.
The notes matured 3 days ago.
You now get either:
1.) Your $10k back and you’ve been collecting 12.99% since the loan
Or
2.)You get $10,000.00 worth of ONCI shares with a 50% off coupon and you’ve been receiving 12.99% interest.
Now if there were no coupon and you just got $10,000.00 worth of shares you’d have 11,111,111 shares at $0.0009.
There is a coupon though. It’s a coupon for shares at 50% off. That means you now get 22,222,222 shares at $0.00045.
You sell your 22,222,222 shares at today’s price of $0.0009 and that gives you $20,000.00.
Your original loan to Steve was $10,000.00.
For 6 months you collected 12.99% on the interest each month.
You converted your loan into 22,222,222 shares and sold them at market for $0.0009.
Your loan to Steve got you your $10k back plus interest PLUS ANOTHER $10k.
See?
See how that’s not at all break even? You just made over $10k in pure profit.
Meanwhile, the shareholders get diluted 22 million shares.
22 million shares seem like small potatoes?
Well...take ONCI’s most recent $90,000.00 loan. Do the same math. I’ll save you the legwork...that $90,000.00 loan at today’s prices would cost the shareholders 200 million shares.
I can’t help you if this doesn’t clear up things for you.
Here is the mcdreamy of mcdreamy outcomes for you as the lender:
Same scenario above where you got your 22 million shares at $0.00045 and before you sell BIG NEWS HITS and the stock goes from $0.0009 (remember that you got yours at $0.00045) and ONCI skyrockets to $0.01 and then you sell.
You loaned Steve $10,000.00 and big news hit before you sold and that loan earned you $222,222.00.
So while it’s in your interest to gamble, you don’t typically hold the shares because you know you’re diluting them and so are other note holders. So while there is a chance you’re holding when big news hits it is more likely that the shares you’re now holding will be diluted and instead of earning $10K in pure profit you’ll be losing parts of that $10k if you hold.
