Ironridge sells because they can. They own 9.99% of common stock, and a whole lot more in series F.
They don't want to hold more than 9.99% so it does not disrupt their business model, so they sell their common stock, reducing their holdings, and then convert the interest payments to common. Then they convert series F to common, ramping them back up to 9.99%.
It's a vicious cycle. And the company is stuck because they do not have institutional investors with investor friendly terms (e.g. No CD), nor do they have adequate cash flows to cover expenses. The newly announced contract will only cover a fraction of it.
Listen, I am very bullish on the technology; I really like it. I'm neutral on the company and management team; Caragol is a much better option than Silverman ever was, and was the former COO (iirc) at Micro Fluidic when DHS pumped in $30m. I am bearish on the stock structure, and ultimately that is what makes, er, loses money.
Sans a major catalyst that speculators thought would have arrived several billion shares ago (pre split levels), this stock will continue to experience death by several hundred million cuts.
By all indications, success is far fetched in the near term as evidenced by lack of institutional investors and lack of insider buying (you can't count shares granted to themselves for bonuses and compensation since there is no cash, and that is their only option).
Through the entire process, management and Ironridge will make out fine, as well as the few that are able to time their catch of this falling knife.
Luckily the company is finally bidding on multiple prospects, so hopefully this turns around rapidly.
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