Plandai Biotechnology Inc (PLPL)

[Kool Aid Man]

Depends on the terms of the note which one has to go digging deep to find. In fact there's no "Dr. Giles Edward Duffield" named anywhere (though there are two others in addition to CEO Roger Duffield). No, in order to find it you have to tap the 10-Q for March 31, 2016 and scroll down to page 13 to find a note for "$52,500" owed to an unnamed entity subject to the following terms---

On March 24, 2016, the Company executed a 10% interest convertible promissory note in the amount of $52,500. The lender can convert the outstanding principal and accrued interest of the convertible promissory note into shares of the common stock at any time at the lesser of $0.10 per share or 50% of the lowest trade share price occurring in the previous 20 trading days prior to conversion. The Company received $50,000 upon closing of the note, net of a debt discount of $2,500, and the aggregate principal balance to be repaid being $52,500. The debt discount was recorded as a reduction of the convertible debenture and is being amortized over the life of the convertible debenture. The Company valued the conversion features on this advances at origination at $66,633 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 12-month term to maturity, risk free interest rate of 0.65% and annualized volatility of 119%. $52,500 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction to the convertible debenture and was amortized over the life of the convertible debenture. The balance of $14,133 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination. ASC 815 requires assessment of the fair market value of derivative liability at the end of each reporting period and recognition of any change in the fair market value as other income or expense.
https://www.otcmarkets.com/filing/html?id=11552039&guid=jwu-kaoGobqih3h

IMO this has all the earmarks of toxic "death spiral" financing. As I understand it the lender has no interest in just getting back their principal and interest. What they want is the ability to demand tranches of shares --just under 10% of the debt owed-- which they can dump at will. As the do, the price of the stock falls and the lender can demand more shares at the lower price to "true up" the debt they're owed. The lender can compel the transfer agent to issue more and more shares.. even force the company to increase the A/S by billions. It's a hideous, insidious and perfectly legal. https://www.investopedia.com/terms/d/deathspiral.asp

IMO the only hope is to have the loan declared to be a fraud perpetrated by the former crooked CEO to a family member. Maybe that's the plan. Unfortunately these are the sorts of land mines that can blow up on a new owner if not caught and defused.