Intelligent Highway Solutions Inc (fka IHSI)

[Toxic Avenger]

You keep making my point - most of the OTC is made up of scams like IHSI, but the ones that are the worst (like IHSI) are the ones whose business is SO FAKE, that the only money they can get is toxic convertibles. The toxic note holders have almost no risk because unlike an actual loan (say, the kind Uber gets), they don't need to (or expect) to ever get the loan repaid. They are really just using a loophole to buy shares at a fraction of the market price, then dump them on to people who don't realize they're buying shares in a scam that is destined to keep going down until $.0001 because whatever they buy shares at, the toxic note holders who sold them those shares, paid less.

This explains the problem with toxic notes: https://www.securitieslawyer101.com/2014/toxic-funding-convertible-securities/

Where a conversion ratio is based on fluctuating market prices, the holders of the convertible security are protected from price decreases, but both the company and its stockholders are subject to devastating market risks including dilution. Because a market price based conversion can cause an issuer’s stock price to decline dramatically, with corresponding negative effects on both the company and its stockholders, convertible securities with market price conversion terms are commonly known as “toxic” or “death spiral” fundings. Death spiral financing is commonplace on the OTC Markets OTC Pinks and is often a feature of pump and dumps and other fraudulent schemes cooked up by dilution funders and shady investor relations firms.