I wish I knew how they get away with this, it's really amazing, it's just like a pyramid scheme.
It looks to me they pulled a stunt on Jan to get a secondary at a higher price. Yet an ipo at $2.60 would have looked suspicious before the SEC eyes. But these guys really can't stop the selling. If it breaks down $1.40 it goes below a dollar.
They need to make cash, plain and simple. Cash increases the value of equity, nothing else. Cash burn is the worse thing in the world for stocks.