Noteholders are holders of a debt note. They are not investors, they are "lonesharks". They're not interested in speculation of a future potential payout. They convert at a rate of (in this case, but sometimes less) 55% of an average trading price, that way they have some leeway in a guarantee of profitability. They are in the business of lending money and making money as soon as they possibly can. Noteholders don't care about shareholders or the company; they want to get paid and they want paid now. If they convert at an average of .01 at 55%, they just received shares at .0055. When they sell them in the following couple of days at at .0085 down to maybe .0065, they just got paid an average of 136% of their loan. They're unscrupulous, rotten, dirty bastards who don't care about anything but getting paid, as is the nature of loansharks. That's just the way it is. There aren't many options for a penny stock and in order to grow they have to take what they can get.
I believe we have a management team that wants to avoid this and will do their best to keep it from happening, (as demonstrated by Rainer's $60,000 stock purchase) but they really need to be on top of it... and I believe they are.
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