How do you figure the "sellers" will be done in March? Have you looked thru SCRC's SEC filings or are you simply parroting the statements that JOSEPH ZAMPETTI and his Section 17(b) violating "core" associates like to tout?
If you have perused thru SCRC's filings, I'm sure you noticed these notes that are all scheduled to mature in 2014 beginning next month (with one in 2015):
On March 20, 2013, the Company entered into a securities purchase agreement with GEL Properties (“GEL”) pursuant to which GEL purchased a 6% convertible note. The Company received $17,600 in cash for a 6% convertible note payable with a principal amount of $20,000. The note did not include a discount, but $2,400 was paid directly to a third party on the Company’s behalf. The accrued interest and principal are due on the maturity date of March 20, 2014. There is a prepayment charge of 150% of the principal amount outstanding and interest due. The conversion price is equal to 70% of the lowest trading price of the Company’s common stock at the close of trading during the 5 trading day period prior to the date of the notice of conversion.
On March 20, 2013, the Company received $35,200 in cash for a 6% convertible note payable with a principal amount of $40,000. The note did not include a discount, however, we paid $2,000 to cover the investor’s legal fees and $2,800 was paid directly to a third party on our behalf. The accrued interest and principal are due on the maturity date of March 20, 2014. There is a prepayment charge of 150% of the outstanding principal amount and interest due. The conversion price is equal to 70% of the lowest trading price of the Company’s common stock at the close of trading during the 5 trading day period prior to the date of the notice of conversion.
On October 4, 2013, the Company entered into a securities purchase agreement with a company pursuant to which the company purchased from the Company a 10% convertible note. The Company received $47,500 in cash for a 10% convertible note payable with a principal amount of $50,000. The note included a discount of $2,500. The accrued interest and principal are due on the maturity date of April 4, 2014. The conversion price is equal to 55% of the lowest market prices on trades of the Company’s common stock during the 20 trading day period prior to the date of the notice of conversion. There is a prepayment charge of 130% of the principal amount.
On April 8, 2013, the Company entered into a securities purchase agreement with Continental Equities, LLC (“Continental”) pursuant to which Continental purchased from the Company a 12% convertible note. The Company received $28,200 in cash for a 12% convertible note payable with a principal amount of $33,000. The note did not include a discount, but we did pay a $4,800 finder’s fee. The accrued interest and principal are due on the maturity date of April 15, 2014. The conversion price is equal to a 40% discount to the average of the three lowest trading prices of the Company’s common stock at the close of trading during the 10 trading day period prior the date of the notice of conversion. There is a prepayment charge of 140% of the principal amount at any time 90 days of the effective date and 150% of the principal amount outstanding and interest due at any time 91 days until 179 days and no rights to prepayment after 180 days. Collateral for this loan also includes 3,000,000 shares of the Company’s common stock
On April 24, 2013, the Company entered into a securities purchase agreement with JMJ Financial (“JMJ”) pursuant to which JMJ purchased a 12% convertible note. The Company received $22,500 in cash for a 12% convertible note payable with a principal amount of $25,000, which note included a 10% discount. The accrued interest and principal are due on the maturity date of April 24, 2014. The Company may repay this note at any time on or before 90 days from the issuance date and at such time the Company shall not owe or pay any interest on the note. The conversion price is the lesser of (a) $0.21 or (b) the amount equal to 60% of the lowest trading price of the Company’s common stock at the close of trading during the 25 trading day period prior to the date of the notice of conversion. Collateral for this loan also includes 9,000,000 shares of the Company’s common stock.
On April 29, 2013, the Company entered into a securities purchase agreement with IBC Funds, LLC (“IBC”) pursuant to which IBC purchased from the Company a 10% convertible note. The Company received $45,000 in cash for a 12% convertible note payable with a principal amount of $45,000. The accrued interest and principal are due on the maturity date of April 29, 2014. The conversion price is equal to the lesser of $0.25 or a 40% discount to the average of the three lowest trading prices of the Company’s common stock at the close of trading during the 10 trading day period prior the date of the notice of conversion. There is a prepayment charge of 25% of the principal amount at any time 30 days of the effective date and 150% of the principal amount outstanding and interest due at any time 31 days until 179 days and 200% any time 180 days after the effective date. Collateral for this loan also includes 2,000,000 shares of the Company’s common stock.
On May 31, 2013, the Company entered into a securities purchase agreement with GEL, Properties, LLC (“GEL”) pursuant to which GEL purchased from the Company a 6% convertible note. The Company received $42,500 in cash for a 6% convertible note payable with a principal amount of $50,000. We did pay a $7,500 professional fees. The accrued interest and principal are due on the maturity date of May 14, 2014. The conversion price is equal to a 30% discount to the lowest closing trading prices of the Company’s common stock at the close of trading during the 5 trading day period prior the date of the notice of conversion. The conversion price may be adjusted downward if, within 3 business days of the transmittal of the notice, the Company’s common stock has a closing bid which is 5% or lower than that set forth in the notice of conversion. There is a prepayment charge of 150% of the principal amount and accrued interest with a 5 day written notification. Collateral for this loan also includes 2,060,000 shares of the Company’s common stock.
On May 29, 2013, the Company entered into a securities purchase agreement with Vista Capital Investments LLC (“Vista”) pursuant to which Vista purchased from the Company a 10% convertible note. The Company received $25,000 in cash for a 10% convertible note payable with a principal amount of $27,500, which note included a 10% discount. The accrued interest and principal are due on the maturity date of May 29, 2014. After 90 days from issuance there is a pre-payment fee of 150% of the principal amount outstanding and interest due. The conversion price is the lesser of (a) $0.25 or (b) the amount equal to 60% of the lowest trading price of the Company’s common stock at the close of trading during the 20 trading day period prior to the date of the notice of conversion. Collateral for this loan also includes 3,000,000 shares of the Company’s common stock.
On June 4, 2013, the Company entered into a securities purchase agreement with JMJ Financial (“JMJ”) pursuant to which JMJ purchased a 12% convertible note. The Company received $25,000 in cash for a 12% convertible note payable with a principal amount of $27,500, which note included a 10% discount. The accrued interest and principal are due on the maturity date of June 4, 2014. The Company may repay this note at any time on or before 90 days from the issuance date and at such time the Company shall not owe or pay any interest on the note. The conversion price is the lesser of (a) $0.21 or (b) the amount equal to 60% of the lowest trading price of the Company’s common stock at the close of trading during the 25 trading day period prior to the date of the notice of conversion. Collateral for this loan also includes 9,000,000 shares of the Company’s common stock.
On June 13, 2013, the Company entered into a securities purchase agreement with Group 10 Holdings, LLC (“Holdings”) pursuant to which Holdings purchased from the Company a 12% convertible note. The Company received $30,000 in cash for a 12% convertible note payable with a principal amount of $30,000. The accrued interest and principal are due on the maturity date of June 14, 2014. The conversion price is equal to a 45% discount to the lowest closing trading prices of the Company’s common stock at the close of trading during the 20 trading day period prior the date of the notice of conversion. There is a prepayment charge of 125% of the principal amount at any time 30 days of the effective date and 150% of the principal amount outstanding and interest due at any time 31 days until 179 days and 200% any time after 180 days. Collateral for this loan also includes 1,000,000 shares of the Company’s common stock.
On June 27, 2013, the Company entered into a securities purchase agreement with JMJ Financial (“JMJ”) pursuant to which JMJ purchased a 12% convertible note. The Company received $22,500 in cash for a 12% convertible note payable with a principal amount of $25,000, which note included a 10% discount. The accrued interest and principal are due on the maturity date of June 27, 2014. The Company may repay this note at any time on or before 90 days from the issuance date and at such time the Company shall not owe or pay any interest on the note. The conversion price is the lesser of (a) $0.21 or (b) the amount equal to 60% of the lowest trading price of the Company’s common stock at the close of trading during the 25 trading day period prior to the date of the notice of conversion. Collateral for this loan also includes 9,000,000 shares of the Company’s common stock.
On July 1, 2013, the Company entered into a securities purchase agreement with Vista Capital Investments LLC (“Vista”) pursuant to which Vista purchased from the Company a 10% convertible note. The Company received $25,000 in cash for a 10% convertible note payable with a principal amount of $27,500, which note included a 10% discount. The accrued interest and principal are due on the maturity date of July 1, 2014. After 90 days from issuance there is a pre-payment fee of 150% of the principal amount outstanding and interest due. The conversion price is the lesser of (a) $0.25 or (b) the amount equal to 60% of the lowest trading price of the Company’s common stock at the close of trading during the 20 trading day period prior to the date of the notice of conversion. Collateral for this loan also includes 3,000,000 shares of the Company’s common stock.
On July 15, 2013, the Company entered into a securities purchase agreement with Iconic Holdings, LLC (“Iconic”) pursuant to which Iconic purchased from the Company a 10% convertible note. The Company received $22,500 in cash for a 10% convertible note payable with a principal amount of $26,250. We did pay a $3,750 finder’s fee. The accrued interest and principal are due on the maturity date of July 14, 2013. The conversion price is equal to a 40% discount to the average of the three lowest trading prices of the Company’s common stock at the close of trading during the 10 trading day period prior the date of the notice of conversion. There is a prepayment charge of 120% of the principal amount at any time within 90 days of the effective date, 125% of the principal and outstanding interest any time 91 to 150 days of the effective date and 130% of the principal amount outstanding and interest due at any time 151 days until 180 days and no rights to prepayment after 180 days.
On July 15, 2013, the Company entered into a securities purchase agreement with Vista pursuant to which Vista purchased from the Company a 10% convertible note. The Company received $22,500 in cash for a 10% convertible note payable with a principal amount of $25,000, which note included a 10% discount. The accrued interest and principal are due on the maturity date of July 15, 2014. After 90 days from issuance there is a pre-payment fee of 150% of the principal amount outstanding and interest due. The conversion price is the lesser of (a) $0.25 or (b) the amount equal to 60% of the lowest trading price of the Company’s common stock at the close of trading during the 20 trading day period prior to the date of the notice of conversion. Collateral for this loan also includes 3,000,000 shares of the Company’s common stock.
On July 29, 2013, the Company entered into a securities purchase agreement with ARRG CORP. (“ARRG”) pursuant to which ARRG purchased from the Company an 8% convertible note. The Company received $60,000 in cash for an 8% convertible note payable with a principal amount of $62,500. The note did not include a discount, but we did pay a $2,500 finder’s fee. The accrued interest and principal are due on the maturity date of July 29, 2014. The conversion price is equal to the lesser of $.264 per share or a 40% discount to the average of the three lowest trading prices of the Company’s common stock at the close of trading during the 10 trading day period prior the date of the notice of conversion. There is a prepayment charge of 120% of the principal amount at any time within 330 days of the effective date, there is no rights to prepayment after 331 days. Collateral for this loan also includes 1,562,000 shares of the Company’s common stock.
On July 29, 2013, the Company entered into a securities purchase agreement with Caesar Capital Group, LLC (“Caesar”) pursuant to which Caesar purchased from the Company a 8% convertible note. The Company received $60,000 in cash for a 8% convertible note payable with a principal amount of $62,500. we did pay a $2,500 finder’s fee. The accrued interest and principal are due on the maturity date of July 29, 2014. The conversion price is equal to the lesser of $.18 per share or a 40% discount to the average of the three lowest trading prices of the Company’s common stock at the close of trading during the 10 trading day period prior the date of the notice of conversion. There is a prepayment charge of 120% of the principal amount at any time 90 days of the effective date and 130% of the principal amount outstanding and interest due at any time 91 days until 179 days and no rights to prepayment after 180 days. Collateral for this loan also includes 1,562,000 shares of the Company’s common stock.
On July 30, 2013, the Company entered into a securities purchase agreement with Caesar Capital Group, LLC (“Caesar”) pursuant to which Caesar purchased from the Company an 8% convertible note. The Company received $60,000 in cash for an 8% convertible note payable with a principal amount of $62,500 and we did pay a $2,500 finder’s fee. The accrued interest and principal are due on the maturity date of July 30, 2014. The conversion price is equal to the lesser of $0.264 per share or a 40% discount to the average of the three lowest trading prices of the Company’s common stock at the close of trading during the 10 trading day period prior the date of the notice of conversion. There is a prepayment charge of 120% of the principal amount at any time 330 days of the effective date.
On August 9, 2013, the Company entered into a securities purchase agreement with Iconic Holdings, LLC (“Iconic”) pursuant to which Iconic purchased from the Company a 10% convertible note. The Company received $45,000 in cash for a 10% convertible note payable with a principal amount of $51,250. We paid $6,250 for professional fees. The accrued interest and principal are due on the maturity date of August 8, 2014. The conversion price is equal to 60% of the average of the three lowest market trades of the Company’s common stock during the 10 trading day period prior to the date of the notice of conversion. There is a prepayment charge of 20% of the principal amount and interest at any time before 90 days from issuance, a 30% premium of the principal amount outstanding and interest due at any time 91 days until 150 days of the effective date and 40% of the principal amount outstanding and interest due at any time 151 days until 180 days and after 180 this note may not be prepaid without prior consent of the holder. Collateral for this loan also includes 750,000 shares of the Company’s common stock
On September 18, 2013, the Company entered into a securities purchase agreement with Hyde Park LLC (“Hyde”) pursuant to which Hyde purchased from the Company a 12% convertible note. The Company received $37,500 in cash for a 12% convertible note payable with a principal amount of $40,000. We did pay a $2,500 finder’s fee. The accrued interest and principal are due on the maturity date of September 18, 2014. The conversion price is equal to a 42.5% discount to the lowest trading prices of the Company’s common stock at the close of trading during the 20 trading day period prior the date of the notice of conversion. There is a prepayment charge of 25% of the principal amount and interest at any time before 30 days from issuance, a 35% premium of the principal amount outstanding and interest due at any time 31 days until 179 days of the effective date and 45% of the principal amount outstanding and interest due at any time after 180 days from the effective date. Collateral for this loan also includes 1,500,000 shares of the Company’s common stock
On October 23, 2013, the Company entered into a securities purchase agreement with a company pursuant to which the company purchased from the Company a 8% convertible note. The Company received $44,500 in cash for a 10% convertible note payable with a principal amount of $50,000. The note did not include a discount, but we paid $5,500 for professional fees. The accrued interest and principal are due on the maturity date of October 23, 2014. The conversion price is equal to 60% of the lowest VWAP prices on trades of the Company’s common stock during the 20 trading day period prior to the date of the notice of conversion. There is a prepayment charge of 130% of the principal amount.
On February 18, 2013, the Company received a net amount of $67,500 in cash for an 8% convertible note payable with a principal amount of $92,500. The note included a 10% discount, we paid a $7,500 finder’s fee and we agreed to pay $10,000 to cover the investor’s legal fees. The accrued interest and principal are due on the maturity date of December 18, 2014. The Company can prepay the note at any time before the maturity date but must pay a 135% of the principal amount outstanding and interest due. The conversion price is equal to 65% of the average of the three lowest trading prices of the Company’s common stock at the close of trading during the 20 trading day period prior to the date of the notice of conversion.
On August 16, 2013, the Company entered into a securities purchase agreement with Typenex Co. Investments LLC (“Typenex”) pursuant to which Typenex purchased from the Company an 8% convertible note. The Company received $180,000 in cash for an 8% convertible note payable with a principal amount of $227,500. We did incur a discount fee of $20,000 and paid a fee of $7,500 and a finder’s fee of $20,000. The accrued interest and principal are due on the maturity date of March 16, 2015. The conversion price is equal to a 35% discount to the average of the three lowest volume-weighted average trading prices of the Company’s common stock at the close of trading during the 20 trading day period prior the date of the notice of conversion. There is a prepayment charge of 135% of the principal amount outstanding and interest due at any time prior to maturity date.
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The above notes total approx $1.1M. Using current sp levels, this translates currently to approx 15M shares.
Yes, we know that SCRC made one installment payment on one note last week, but we don't know how much. And, if SCRC was able to make this installment payment last week, then it would suffice to say that so long as revenues don't decline, then SCRC should be able to make a minimum of one similar installment payment each month. And if revenues increase or new revenue sources begin operations (i.e. hopefully HK orders), then we can hope that SCRC will make MORE installment payments each month.
HOWEVER, $1.1M is a big hole to fill. Even in the most optimistic scenarios, it is likely that at least thru the the summer (i.e. end of Q3), there will not be much meaningful relief from dilution from convert notes as it is likely that the vast majority of these note balances will mature unpaid, and therefore convert.
From an investment thesis perspective, I would urge you and everyone else once again to use the information disclosed in SCRC's filings as a roadmap.
Based on the above, we can see that we are in the midst of a reprieve where the next wave of note conversions is not scheduled to occur until 3/20/14. So with no expected conversions as well as no additional restricted shares unlocking, there should be no "unnatural" forces holding the sp back in the event of meaningful news or other catalysts hitting over the next 3+ weeks (such as a potential announcement of initial orders from HK or an unexpected early approval from mainland China, etc).
HOWEVER, if there is any meaningful pop in the sp, plan ahead for volatility as 3/20/14 approaches and we receive no word from SCRC that it has paid down these notes.
In addition, note that beginning 3/20/14, the floodgates open, with additional notes maturing every 1-2 weeks thru late summer (8/8/14). After this 8/8/14 maturity, the scheduled conversions become more spaced out, with the next one not scheduled until 9/18/14, then 10/23/14, then 12/18/14, with the final (and largest) note maturing on 3/16/15.
This spacing will help IMMENSELY as it will enable the market more time to absorb these and recover, unlike being hit with new conversions every 1-2 weeks. However, that is still many months down the road.
One note as a disclaimer: The toxic note situation w/SCRC is so messy and convoluted that it is very difficult to truly keep on top of it all. The listing of notes above was from a cursory review of SCRC's Q2 and Q3 10-Q's. I haven't had time to pore thru the details, but I vaguely recall seeing perhaps 1 or 2 notes that were partially converted. Which ones they were and for how much, I don't remember off the top of my head. But it is possible that they may pertain to one or more of the notes I listed above. But in totality of all the notes listed, any partial conversions would be very much immaterial.
Your assessment is spot on rocky i agree 2x in march and on the .30 range plus in april. BLOCK OUt THE NOISE AND STICK TO YOUR PROJECTIONS!
No notes after After april 24th!!!!!!!!!! NOTE FREE AFTER APRIL 24TH!!!! No notes after april 24th!!!!!! No notes after april 24th!!!!!! Already traded over 40m of notes!!!!!!
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