They are out of money again and having to sell more stocks according to this 8K. They are basically issuing new notes with a 10% interest that matures one year from the issue date. Look further at the terms and conditions it says interest on the notes is payable quarterly principal and interest are payable using cash, or if specified equity conditions are met, shares of common stock.
So July 13, 2016 they sold 364k worth of the 4% original discount senior secured convertible. The remaining 1.716 million will be sold in six additional weekly schedule. Means 2.08 million worth when that's done in the next 6 weeks.
June 9 up to this point they sold 830k worth of the series H convertible. That is now converted into 866k worth of the new notes. This adds on top of the 2.08 million is 2.946 million funding they raised.
Further down it stated these notes are convertible at any time into common stocks at the conversion rate of 70% of the lowest weighted average price. Basically saying these private investors can convert their shares at 70% market price and dump for a instant 30% profit.
2.946 million convert into common share at current price of 0.4 is 73.65 million shares. So you're looking at an increase of another 73.65 million shares outstanding when they get converted and sold off at 0.04 per share. Remember the terms said 70% of average market price. I am already counting short of the conversion. It can easily be another 100 million shares dumped into the market in the coming months. That's what people are buying into. That 80-100 million share dumped into the market will take this down to below 0.1.
It doesn't matter what the stock price is they always get cheaper shares at 70% of he market average. So, this can go to 0.001 and they still make 30% profit as long as people still buy it.
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