Digital Brand Media and Marketing Group Inc (DBMM)

[Threeflight]

They have to raise the AS very soon (as in days to a few weeks) due to the convertible that is due in 3 months. Per their own pr 2 months ago, they need to keep a reserve of shares to pay that off. Right now they are super close to going over the needed AS legally required for that reserve. If they need to keep 240 M in reserve, and add that into the 570 M OS as of a week ago, that puts them with 30-40 M or so of having to raise the AS again. Here is the company statement.

RTG Ventures share structure was increased in June, 2011 to 500,000,000 common shares as prudent contingency planning. The lenders who provided 5 tranches of short-term convertible debenture funding required a reserve of shares based on 4 or 5 times the market price, adjusted periodically if the share price decreases.

The reserve requirement must continue to be maintained during the conversion hiatus period. As such, when the last filing of RTG's 10-Q took place on January 17th, the outstanding was 238,868,865 common shares and the reserve was 236,251,795 shares; and, as such, RTG Ventures was precariously close to the 500,000,000 Authorized Shares in place. This situation was much too tight according to RTG's professional advisors. Even though the intent is to pay the debt in cash within 6 months time and nothing has changed in that regard, the reserve must be maintained contractually until it is paid in full.