LOL, uh no. Death spiral shares are not restricted. Note the wording in the filing, particularly no mention of restrictions, as well as the requirement to maintain enough shares to convert at a $.0025 price (1/4 cent). ;-)
On May 9, 2014, the Company received $50,000 in exchange for an unsecured convertible promissory note that carries a 12% interest rate (“First Group 10 Note”), which matures on May 8, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to the lesser of (a) fifty eight percent (58%) of the average of the two lowest closing bid prices of the Company’s common stock for the seventeen (17) trading days prior to the conversion notice date, or (b) four and a half cents ($0.045) per share. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid a $2,500 Original Issue Discount that is being amortized on the straight line method over the life of the loan. The Company must at all times reserve at least 20 million shares of common stock for potential conversions.
Here is the wording from one of their death spiral notes last quarter. "The Holder of this Note is entitled, at its option, at any time after 180 days, and after full cash payment for the shares convertible hereunder, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's common stock (the " Common Stock ") without restrictive legend of any nature, at a price (" Conversion Price ") for each share of Common Stock equal to 60% of the average of the two lowest closing bid prices of the Common Stock as ..." That note in fact became convertible a few weeks ago. Hmmmmm. ;-)
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