The problem isn't those who are holding
The problem is the rampant dilution by the company. The lenders are getting their shares at 50% of the lowest recent price and immediately selling. Lowest recent price is .0003. So their shares have a .00015 basis. Anything they sell is very profitable.
Outstanding shares increased by 1 BILLION shares between February and May, THE LATEST REPORT AVAILABLE.
In April 2012, we received $11,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before December 31, 2012. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect at an Event of Default to convert any part or all of the $11,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
In April 2012, we received $2,500 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before April 25, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect at an Event of Default to convert any part or all of the $2,500 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
In April 2012, we received $15,000 from JMJ. This fourth tranche of $15,000 is from the Convertible Promissory Note Agreement we entered into with JMJ on February 23, 2011. In connection with this partial fourth tranche we will pay a 7% Finder’s Fee, which is $1,050.
In May 2012, we received a total of $25,000 from an unaffiliated third party investor pursuant to a short-term promissory note with a maturity date of August 2, 2012. The note provides for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 10% per annum until maturity above and beyond the premium. We issued a total of 5 Series P Preferred Stock to the investor as collateral with a total stated value of $25,000.
In May 2012, we received $8,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before May 14, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect at an Event of Default to convert any part or all of the $8,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
On April 13, 2012, Southridge executed a partial debt to equity conversion of a $100,000 short-term promissory note dated September 12, 2012 in which they converted $49,000 principal and $1,096 interest. We issued Southridge 123,693,557 restricted common shares on April 24, 2012 pursuant to Rule 144 based on an agreed conversion price of $0.00041 per share.
On April 13, 2012, Southridge executed a partial debt to equity conversion of a $100,000 short-term promissory note dated September 28, 2012 in which they converted $4,000 principal and $4,340 interest. We issued Southridge 20,591,916 restricted common shares on April 24, 2012 pursuant to Rule 144 based on an agreed conversion price of $0.00041 per share.
On April 24, 2012, JMJ executed a debt to equity conversion of $29,120 in principal of the second tranche of $100,000 which we closed on May 20, 2011. We issued JMJ 52,000,000 common shares pursuant to Rule 144 based on a conversion price of $0.00056 per share.
On May 1, 2012, Panache executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $9,765 principal. We issued Panache 21,000,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.000465 per share.
On May 1, 2012, Asher executed a partial debt to equity conversion of a $78,500 short-term promissory note dated October 24, 2011 in which they converted $12,000 principal. We issued Asher 26,086,957 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00046 per share.
On May 2, 2012, Asher executed a partial debt to equity conversion of a $78,500 short-term promissory note dated October 24, 2011 in which they converted $15,000 principal. We issued Asher 44,117,647 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00034 per share.
On May 9, 2012, JMJ executed a debt to equity conversion of $28,980 in principal of the second tranche of $100,000 which we closed on May 20, 2011. We issued JMJ 69,000,000 common shares pursuant to Rule 144 based on a conversion price of $0.00042 per share.
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10-Q Table of Contents
On May 10, 2012, Asher executed a partial debt to equity conversion of a $78,500 short-term promissory note dated October 24, 2011 in which they converted $13,000 principal. We issued Asher 68,421,053 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00019 per share.
On May 10, 2012, Panache executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $7,440 principal. We issued Panache 30,000,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.000248 per share.
On May 14, 2012, JMJ executed a debt to equity conversion of $4,389 in principal of the second tranche of $100,000 which we closed on May 20, 2011. We issued JMJ 19,000,000 common shares pursuant to Rule 144 based on a conversion price of $0.000231 per share.
On May 15, 2012, Panache executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $9,330 principal. We issued Panache 50,000,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0001866 per share.
From January 2011 to April 2011, Southridge acquired promissory notes from a private investor totaling $800,000 in principal and 55,363,907 shares of common stock which were issued as collateral. Southridge proposed that we amend the conversion terms of the notes permitting the holder to convert the notes and we agreed to the amendment. From January 12, 2011 to May 18, 2012, Southridge issued notices of conversion to settle $700,000 in principal
plus accrued premiums totaling $395,699 into 405,202,769 shares of our common stock, of which 51,802,774 shares were collateral shares and 353,399,995 new shares were issued pursuant to Rule 144.
As of the date of this report, we owe a total of $1,882,356 of short term debt of which $1,320,269 is principal, $526,562 is accrued premium and $35,525 is accrued interest. Eight promissory notes totaling $756,000 in principal have been extended to June 30, 2012; two promissory notes totaling $21,604 in principal have been extended to June 30, 2012; one promissory note with $38,500 in principal has a maturity date of July 26, 2012; one promissory note with $20,000 in principal has a maturity date of December 31, 2012; one promissory note with $40,000 in principal has a maturity date of November 21, 2012; one promissory note with $43,465 in principal has a maturity date of November 21, 2012; one promissory note with $53,000 in principal has a maturity date of September 5, 2012; one promissory note with $17,000 in principal has a maturity date of December 18, 2012; one promissory note with $25,000 in principal has a maturity date of February 28, 2013; one promissory note with $30,000 in principal has a maturity date of March 18, 2013; one promissory note with $11,000 in principal has a maturity date of December 31, 2012; one promissory note with $2,500 in principal has a maturity date of April 25, 2013; one promissory note with $25,000 in principal has a maturity date of August 2, 2012; one promissory note with $8,000 in principal has a maturity date of May 14, 2013; and eight promissory notes totaling $229,200 have maturity dates from March 6, 2012 to April 30, 2012. We have repaid aggregate principal and premium in the amount of $173,376 on these short-term notes and a total of $1,830,035 principal, $395,699 in premium, and $46,178 in interest has been converted into 1,232,252,551 shares of our common stock of which 51,802,774 shares were collateral shares and 1,180,449,777 new shares were issued pursuant to Rule 144. Out of the original 55,363,637 shares of common stock held as collateral, a balance of 3,561,133 shares remains on the $300,000 principal of the remaining notes.
As of the date of this report, we owe JMJ a total of $160,949 in long-term debt of which $117,949 is principal, $25,000 is consideration on the principal and $18,000 is interest.
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