Replies to post #11608 on Sanomedics International Holdings Inc. (fka SIMH)

[DaReal]

The Lenders can't hold more than 4.99% of the O/S at any time.
So they can't convert all at the same time and they won't.
Why should they?
Just lookup the Converted Redwood shares in the last 10Q:

From October 1, 2014 to November 10, 2014 the Company issued Redwood a total of 34,222,678 shares in connection with the conversion of $451,982 in convertible debt held.

Means they got their shares at an avrg of 0.0132 between October 1, 2014 to November 10, 2014.

Lets look at the closing prices for that Period:

Date Close/Last

11/21/2014 0.018
11/20/2014 0.0184
11/19/2014 0.0165
11/18/2014 0.0195
11/17/2014 0.021
11/14/2014 0.0254
11/13/2014 0.028
11/12/2014 0.016
11/11/2014 0.017
11/10/2014 0.0203
11/07/2014 0.02
11/06/2014 0.022
11/05/2014 0.0225
11/04/2014 0.0255
11/03/2014 0.0265
10/31/2014 0.026
10/30/2014 0.028
10/29/2014 0.032
10/28/2014 0.0354
10/27/2014 0.041
10/24/2014 0.054
10/23/2014 0.048
10/22/2014 0.054
10/21/2014 0.066
10/20/2014 0.0629
10/17/2014 0.098
10/16/2014 0.084
10/15/2014 0.112
10/14/2014 0.102
10/13/2014 0.34
10/10/2014 0.16
10/09/2014 0.015
10/08/2014 0.02
10/07/2014 0.023
10/06/2014 0.022
10/03/2014 0.035
10/02/2014 0.04
10/01/2014 0.085

http://www.nasdaq.com/symbol/simh/historical

Looks like as they made some pretty decent money in that time frame... based on the avrg conversion price eh?
Even if they are still holding some tehy are still green!

[Homebrew]

SIMH Debt is convertible to 65% of current price. So no matter what the stock price is, the lender gets it for a 35% discount to market price. (simplified explanation). Look at the 8-K to see the specific terms of each agreement.

From a recent 8-K
"All principal and accrued interest on the Debentures is convertible into shares of the Sanomedic’s common stock at the election of the holder thereof at any time at a conversion price equal to 65% of the lowest traded Volume Weighted Average Price price during the 10 trading days prior to conversion."

Here's a snippet from a good article on the topic. (link below)

> An issuer sells convertible securities that allow the holder to convert into common stock at a discount to market, which means the lower the issuer’s stock price falls, the more shares are issued upon conversion.

>The more shares the company issues, the greater the dilution to the issuer’s shareholders will suffer. The issuer will have more shares outstanding, revenues per share will be lower, and individual investors will own proportionally less of the company. While dilution can occur with either fixed or market price based conversion formulas, the risk of potential adverse effects increases with a market price based conversion formula.

> The more shares issued upon conversion, the higher the probability that the issuer’s stock price will decrease. The more the stock price decreases, the more shares the issuer will have to issue for future conversions.

http://www.securitieslawyer101.com/2014/toxic-funding-convertible-securities/

They probably spread the stock sales out a little bit, not dump the entire amount on day 1 at market open.