When will the debt be brought under control and when will the dilution stop?
“We cannot tell yet how much more conversion there will be but the rate and amount are in a dramatic decline. We do see an end coming soon since that has been the direction for much of the past three months.”
They didn’t know how much debt will convert or they are unable to say? Q3 saw 509.5 million new shares and 432.3 million so far for Q4.
"...Company closed on a one-year convertible note in the face amount of $550,000.00 including an OID of 10% and a fixed conversion price of $0.005 per share…”
The May $550K LABRYS note was eligible to convert form date of issue. Language was added in the Q2 filing that delayed the conversions for 180 days which makes the note currently eligible. The one year maturity date is when the note becomes delinquent. The 10% was paid up front and factored in by the reduced principle given the company. The fixed .005 rate is true only of the share price is trading at par (.01) or higher. From there the conversion price is adjusted to reflect the original deal per the anti-dilution price protections.
Quote: Ethema Health @HealthEthema · Sep 30 Last few days Labrys Fund exercised 2 warrants for restricted shares of 92M which are restricted until Nov and Dec and 60M unrestricted for conversion of debt. $GRST
"On May 7, 2021, the Company, entered into a Securities Purchase Agreement with Labrys, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $550,000 for net proceeds of $477,700 after an original issue discount of $55,000 and certain legal expenses of $17,300. The Note has a maturity date of May 7, 2022 and bears interest at the rate of eleven percent per annum from the date on which the Note was issued until the same became due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note was convertible at any time and from time to time at the election of Labrys during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to $0.005, subject to anti-dilution adjustments."
"On June 2, 2021, the Company, entered into a Securities Purchase Agreement with Labrys, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $230,000 for net proceeds of $200,000 after an original issue discount of $23,000 and certain legal expenses of $7,000. The Note has a maturity date of June 2, 2022 and bears interest at the rate of eleven percent per annum from the date on which the Note was issued until the same became due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note was convertible at any time and from time to time at the election of Labrys during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to $0.004, subject to anti-dilution adjustments."
anti-dilution adjustment based on par value for conversion is .01
1.1 Conversion Right. The holder on any calendar day, at any time on or following the issue date, to convert all or any portion of the then outstanding and unpaid Principle Amount and interest (including any Default Interest) into fully paid and non-assessable shares of Common Stock.
1.2 Conversion Price
(a) Calculation of Conversion Price The per share conversion price into which Principle Amount and interest (including any Default Interest) under this Note shall be convertible into Common Stock hereunder (the “Conversion Price”) shall equal $0.005. If at any time the Conversion Price as determined hereunder for any conversion would be less than par value of the common stock, then at the sole discretion of the Holder, the conversion price hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may be increased to include Additional Principle, where “Additional Principle” means such additional amount to be added to the conversion amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the Holder to the par value price.
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