Stock was basically dormant and left debt holders unable to sell shares due to low volume.
So it is quite feasible a deal was struck to take care of the debt be it shares or payment, it is also possible that it could be written off depending on how old some of it is.
There was no signs of dilution happening, of course shares will be issued for the merger bit no signs of active selling
Total toxic debt convertible amount $1.3 million as per recent 10q What the heck is going on here? Did the company cheat Gerpang? Thus merger deal will be cancelled again