Abondanceinvest, I am not a holder of any shares of this company at this time. But if I were to take a chance on this, .0001 would be the only price entry point I would consider, and if I had the chance I would sell half at .0002 to get to a position of zero risk. I would then trade the stock with impunity to get as big a share count as possible, so that when the R/S came I would still have an adequate number of shares to continue to trade efficiently.
However, this fact is where I think the problem presents itself:NOTE 7 – ADVANCE FROM GOLDEN STATE INVESTORS, INC.
An advance from Golden Gate Investors, Inc. (now known as Golden State Investors, Inc.) totaling $376,392 at March 31, 2010 relates to funds advanced to the Company for future exercise of warrants as discussed in Note 6.
Those warrants will have to be resolved one way or the other. Typically, they are resolved by issuing shares and at the current pps the number of shares to be issued is astronomical. (I refer you to Note 6 in the latest quarterly report).NOTE 6 – CONVERTIBLE DEBENTURES
On November 1, 2006, the Company entered into a convertible debenture totaling $100,000 that matures November 2011, is unsecured and bears an annual interest rate of 4.75%. The convertible debenture is convertible into shares of common stock equal to the principal amount of the debenture being converted multiplied by 110, less the product of the conversion price multiplied by 100 times the dollar amount. The conversion price is based on the lesser of $0.20 per share or 82% of the average of the lowest volume weighted average prices during the 20 trading days prior to the debt holder’s election to convert such unpaid balances. Additionally, the debt holder is entitled to a warrant to purchase 10,000 shares of common stock at an exercise price of $1.09 per share. The debt holder does not have the right and the Company does not have the obligation to convert any portion of the convertible debenture that will cause the debt holder to be a deemed beneficial owner of more than 9.99% of the then outstanding shares of the Company’s common stock.
Unless the company is able to pay back the warrants with cash, then further dilution is inevitable to the point where a Reverse Split will be the only option...
All of this is just my humble opinion, but based on the number of reverse splits performed by the management in the past, I think a pattern has been established here and it is always easier to pass the burden of debt onto the shareholders with a stroke of the pen by rationalizing that it is in the best interests of the shareholders to at least keep the company alive to give some hope to the shareholders rather than to declare bankruptcy, and kill all shareholder value. The third choice of actually creating enough revenue to pay off the debt is usually out of reach for for those CEO's looking for quick money.
Anyway, good luck to you....
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