Replies to post #125511 on DD Support Board and Research Team

[Arthur]

The Company incurred net income of $2,967,808 compared to a Net Loss of $(936,665) for the three months ended June 30, 2017 and 2016, respectively.

The increase in net income resulted primarily from the decrease of interest expense related to the convertible notes payable, an increase in a gain on fair value of derivative liability, a gain on settlement of debt, and a gain of $135,000 on the forfeiture a technology transfer deposit. These were offset by an increase in derivative expense.

They have a ($709K) operating loss, but they have $3700K that magically appeared on their balance sheet as "Change in fair value of derivative liability".

Basically, shares issued for convertible debentures are treated as a "derivative", so the more the company's stock price drops, the more the company "makes" on the derivative.

Don't ask me to explain it, I don't understand it at all.

If I remember correctly, GAAP guidance for flourless convertible is to issue (and expense) all the shares to cover all the toxic loan when the loan is taken, and to issue more shares each time the stock price drop, regardless if the shares are issued for conversions to the lender or not. The shares are kept as treasury shares meanwhile.

No subpenny stock ever treat convertibles that way, they prefer to set them up as a "derivative", and the derivative value increases as the stop price drops since issuance.
So the more the company beggars its shareholders, the more money appears from thin air in its balance sheet.

MYDX currently has $473K in various convertibles, options and warrants.