read here As of March __, 2015, approximately one-third of the increase in the authorized shares of common stock, will be to be pledged as additional collateral to persons who have paid the Company an aggregate of one million dollars for future delivery of GIA-graded polished diamonds, as the transaction documents with such persons provide that the amount of collateral shall be subject to adjustment depending on the amount of diamonds which have been delivered and the market price of our common stock. The earliest time that any such shares placed as collateral will not be returnable to the Company is December 31, 2016, which is the deadline for delivery of the GIA-graded diamonds.
In addition, the second largest part of the newly authorized shares will be used to increase the amount of common stock which will be reserved for issuance upon conversion of outstanding convertible debt of the Company. The transaction documents generally require the Company to reserve between 3 to 5 times the number of shares needed for full conversion of the debt at any given point in time. Due to recent decreases in the market price of the Company's common stock the number of shares of common stock which must be reserved pursuant to such contractual arrangements must be increased. Upon full satisfaction of the debt (by payment or conversion into common stock) the reserves shall be cancelled.
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