Hugh, I see that some of your postin friends on another board have no idea how a Convertable Note works. Whalehaven, NIR or whoever, it doesn't matter. Some think these hedge funds just get shares, sit on them or sell and that's it. I know you know the drill well but thought I'd help others understand how it works. I see you've been talkin about a settlement agreement entered into by NIR funded company HLNT and Whalehaven Fund. The HLNT posters don't have a clue how that's done. NIR has the same company HLNT in court over a huge dollar convertable note or notes.
It works like this. Hedge Funds lend money to the company at a reasonable interest rate. Say 8% on a two year note. In 6 months the Hedge Fund wants payments in shares (see rule 144) or cash payments. I've not seen one Pink company yet that paid in cash. They always pay in shares.
The share payment discount works like this. The Hedge Fund has a discount clause regardin share payment. That's usually 50% t0 70% discount off of bid calculated on a 20 day trailing daily pps average. In simple terms it's done like this. The Fund takes the lowest traded pps for 3 days of the last 20-30 tradin days. They average that amount. Let's say a company traded for 20 days and the lowest trades for 3 of those days was .01, .009 and .011. The average of those is .01. Now the Hedge Funds takes 60% off that average. That equals .004. So now the Hedge Fund converts/receives those shares. Usually just under the 5% insider amount of the I/S.
The Hedge Fund can't lose. That's the hedge. They almost always dumb the shares the next 3 days if possible and then repeat the conversion process always stayin just under the 5% insider shares owned amount.
It's nonsense when poisters like the HLNT group say that the fund will hold the shares. That's not what hedge funds do. They can't hold over 5% and not be insiders and then be governed by insider rules. They dump the shares. Once dumped they convert again and don't care what the pps is because they go by their discount formula. Anyone speculatin on Hedge Fund activity better understand the Hedge Fund Business Model. It doesn't change from fund to fund and investors had better understand how it works. Any board with posters saying a Fund is gonna hold shares is simply trying to intice new buyers, also called pumping. After all, if you don't have buyers when the converted shares are sold the pps dives fast.
