They did dilute in the past, and they ran the PPS down substantially. However, that still doesn't account for the two Asher notes that can be converted any day now.
The first note with interest was at $38,922 as of the end of Q2. If they converted that note this month, they would have received ~19.7M shares. If they converted it last month, they would have received ~59M shares. I'm sure that Asher only converts enough shares at a time to stay below 20M or 5%. That's how they avoid having to file with the SEC.
Lowest 3 trading prices of this month, 0.0044, 0.0045 and 0.0045. 0.00447 x 42% = 0.002 $38,922 / 0.002 = 19,717,325
Lowest 3 trading prices of last month, 0.0015, 0.0015 & 0.0017. 0.00157 x 42% = 0.00065 $38,922 / 0.00065 = 59,151,975
Thus, the problem of dilution has yet to be resolved.
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