The loan conversion forces the issue of 8.25m shares + warrants of 4.13m giving total new shares of 12.37m on top of the 24m outstanding. Approximate dilution of 33% to existing shareholders for $6m.
In other words these guys are valuing the company at $18m post money.
By not doing anything to inform existing shareholders of what is going on, they deliberately created a climate of fear, forcing people to sell into a declining market. As the price flatlined out in the $0.65 area they did their financing.
$6m of debt puts a strangle hold on the company and effectively gets protected by fire sale net asset value. Any recovery of this dog beyond $0.65c share price, these guys make out like bandits. A $1 stock price and their $6m of debt can be cashed out for $12m. 100% gain for not doing very much with almost no risk.
How can the company continue to remain silent on the accounting issues. looks like collusion to me by the board!!
The law firms suing the company should be all over this.
Not much integrity with this motley Crüe. Take taxpayer money (federal money funneled through state and local politicians) and then line their pockets with sweetheart deals at everyone elses expense. Go figure.