No, that is not why it became a penny stock. It became a penny stock because they published their contract details with Cognate and shorts look for vulnerabilities and in that contract as well as in their financials at the time, are all the details of the financings from Cognate, not TO Cognate but FROM Cognate in the form of a supplier taking shares for product. And in return, Cognate would not sell the shares but would hold on to them, a very unusual deal that we know most providers of capital to such tiny companies never do, and in exchange the company promised to make them whole for the value of goods delivered with a most favored nation’s clause, (meaning) if they did subsequent financings at lower share price valuations, they would provide enough shares to Cognate to make it whole for its previously invoiced products and services, at the new share price. This is a common provision in such instances, but short funds love them and look for them, in my experience. The arrangement with Cohnate kept the share price relatively high, which kept dilution low and everyone was happy, though shorties were also happy to spot an opportunity. But hedge funds use these clauses to turn these companies into piñatas of share dilution. First they pierce the share price with lots of false light noise, usually based on what looks like salacious details in their financials or random normal details they can spin into huge mysteries, and then when the company’s share price fell they had to keep topping up Cognate with shares that matched the value of previously supplied services and product.
And THAT led to the decline and a massive issuance of shares in a short period of time.
You really are just throwing random theories out there to justify a false notion you can’t give up on because you have already invested too many posts in the notion.
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