You do not need to buy into anything. It is simple as long as a penny stock can get investors to fund operations and issue shares to keep the company alive so that insiders can milk it they will, but once everyone sees through the scam and the money dries up, they do a rinse and repeat. It is not the end of the road only for the existing shareholders since they get screwed and the insiders get to start all over again.
The term on the Preferred As made their whole investment into VLDI very suspect. Why would anyone accept a .10 conversion rate, but require twice their money back in a liquidation and first preference, especially when all the other preferreds got a .03 conversion rate. I have never heard of that condition in any financing package. A condition that makes one think the investors were more worried and/or counting on failure than success.
I know it may seem far fetch , but if VLDI really had something, Bruce and his investors could but the company in liquidation via debt that is in default. The preferred As then could take over the company and make a deal on the product and screw the shareholders.
Not over thinking, just trying to understand the motivation of the preferred A's in requiring this term .
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