Well, you certainly ask the critical questions.
The share conversions to pay off the company's debt will continue for some time into the future. They are legally bound to honor that debt. I don't see them using any of the new money to pay down debt at this time as they will need every dollar to get their projects completed. Maybe at some point in the future they can pay some of this old debt in cash (or at least refinance on better terms) but I don't see that happening any time soon.
It is a battle between the company using the new funds to make progress faster than the conversions on the old debt can keep the stock down. The reverse stock split makes the actual number of converted shares much smaller. Instead of converting 20 or 30 million of shares at a time, the note holders can now only convert 1 or 2 million share at a time (4.99% of the outstanding shares is the amount they can convert at any one time to avoid 144 violations).
In theory, this should give the company time to produce results while the OS is still relatively small. It wouldn't take much to bring in enough volume to counteract the conversion selling. In practice, however, they are up against the market makers as well, who always walk a stock back down to cover their shorts created by any significant retail buying.
It is absolutely imperative that they meet their business objectives with this new funding. If they can accomplish those goals, then they have a chance to built cash flow and regain shareholder trust. Without this recognition as an up and coming “real” business, it is indeed a difficult situation they find themselves in.
Hopefully, management will prevail and eventually succeed and our shares will reflect that value.
News 
Market Data 
Discover 
AI
