East Coast Diversified Corp (fka ECDC)

[chicagodog]

Note 4 – Amounts Payable in Common Stock and Derivative Liability
 
During the six months ended June 30, 2012, Ironridge Global IV, Ltd. (“Ironridge”) purchased $826,367 of accounts payable and $241,978 of loans payable, for a total of $1,068,345, from certain creditors of the Company. On April 20, 2012, the Superior Court of the State of California for the County of Los Angeles, Central District approved a Stipulation for Settlement of Claims (the “Settlement of Claims”) in the favor of Ironridge. The Settlement of Claims calls for the amount to be paid by issuance of the Company’s common stock. The number of shares of the common stock is to be calculated based on the volume weighted average price (“VWAP”) of the common stock over the calculation period, not to exceed the arithmetic average of the individual daily VWAPs of any five trading days during the calculation period, less a discount of 35%. The calculation period is defined as the period from the approval of the Settlement of Claims until the settlement is completed.
 
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East Cost Diversified Corporation and Subsidiaries
Notes to Consolidated Financial Statements
June 30, 2012
(unaudited)
 
Note 4 – Amounts Payable in Common Stock and Derivative Liability (Continued)
 
As the terms of the settlement include issuing common stock at a 35% discount to the conversion price, a derivative liability for the discount was established at the time of the Settlement of Claims of $575,263, which was charged to operations during the six months ended June 30, 2012 as a loss on conversion of debt. The derivative liability is revalued at the end of each reporting period with any change in the liability being charged to operations.
 
As common stock is issued in installments on the settlement, the Amounts Payable in Common Stock and the Derivative Liability will be reduced accordingly. During the six months ended June 30, 2012, 109,500,000 shares of common stock, with a market value of $563,460, were issued to Ironridge in settlement of $359,223 of the liability, resulting in the reduction of the derivative liability of $204,237.

Did you have a specific sentence in mind? Where in the filings do you find a clear statement of more dilution to come? Please advise at your earliest convenience. ty.