let me try to explain cornells role as best I can as I understand it.when a co signs an equity disribution agreement with cornell the co places an amount of shrs in escrow as the collateral for the money to be given to the co upon request or a scheduled draw.cornell sells the amount of shrs needed to repay themselves for the funds given. the very first thing cornell does before the ink dries on the deal is takes out a covered short position,,against the escrow shrs {a boxed short}in order to to protect the LVR,,loan to value ratio. when a co dilutes the shr price falls,the shrs put to escrow are based on current pps and enough to cover the intended dollars agreed upon.cornell shorts it as they know the dilution will lower the pps and they will sell stock at any price to recoup the money given the co from each draw.
when the shrs are gone as it has taken more and more to equal the draws the co puts more in escrow or raises the a/s if they have hit the wall.
if a co never gets earnings and continues to rely on equity financing the pps never rises to cause cornell to cover as they are constantly dilutung,,flooding the mkt with shrs and devaluing the existing o/s,,if they get lucky the co goes bankrupt and they never cover.
this may not be exact or I may not have expressed it perfectly but its close and I am not here to argue symantics,,hopefully you get the picture and it helps.
when companies cancell or pay off a cornell deal is when cornell gets screwed as they have already sold shrs short from the escrow and the co cancells the deal and takes back escrow shrs cornell has a open naked short position and has to buy them in the open mkt,,as in gccp and lmmg. then starts a long battle of them covering and when it goes to high they flood the offer side with shrs below the current asking price to collapse the bids and get sellers to jump below their asking price and when they get it where they want it the covering begins all over again.
ask rp,,I imagine he has been seeing it in gccp with me for months now
I have seen no signs of cornell being concerned with mlxo and them having a need to cover yet and did not want to post that fact here prior to going to pinks as some gave the ceos assurance we would not go pink..the ceo lied,,plain and simple. I did not sell 39,500 @ .032 as I should have but I love a good cornell squeeze play and held them as a hedge that something occurs regarding the equity agreement,,if it does the stock pps will rocket before you could buy it imo.
if I sold it then I would not rebuy it at any price as a pk,,it takes a special pk for me to buy and they are rare,,not unheard of but rare.
