SearchCore, Inc. (OTCMKTS:SRER) entered into a few agreements throughout the past week. The latest deal the company made was for the issuance of four promissory notes to investors, each in the amount of $50 thousand. The total debt of $200 thousand was announced in an 8-K from Friday. In addition to the notes, SRER also granted 50 thousand shares of common stock to the note holders.
Earlier last week, the company announced another couple of agreements it had recently entered into. In an 8-K report from Monday, SRER disclosed using equity for repaying accumulated payments due for services. The registrant issued a total of 375 thousand shares of common stock on November 14 to cover due payments.
SRER also disclosed a recent securities purchase agreement it entered into with notorious toxic financier KBM Worldwide, Inc. SearchCore issued a note in the principal amount of $54 thousand. Under the conversion terms, the note is a toxic debt, as it can be converted to shares of SRER common stock at a 42% price discount.
The increased risks around an investment in the venture’s shares should under no circumstances be overlooked. Doing research on the company before investing in SRER stock would be a wise decision.
StreamTrack, Inc. (OTCMKTS:STTK) reported yesterday that between October 7 and November 19 the company has issued a total aggregate of 118,743,650 shares of common stock under previously reported convertible notes. STTK did not disclose the sum which the issuance of these notes has covered.
There was, however, input on the current amount of the company’s O/S count. STTK has 384,905,233 shares of common stock issued and outstanding as of November 19. This is up by more than three times from the amount the venture had on June 30, 2014, as disclosed in its latest submitted financial report. On that date, StreamTrack disclosed an O/S count of 117,207,233 shares of common stock.
The amount of shares STTK issued under conversion in the past 6 weeks is greater than the total amount the company had in mid 2014. The convertible notes the venture has issued in the past has taken its toll on STTK stock, as the share price has been sinking throughout the last few months.
In May, the penny stock was traded as high as a penny. A gradual decline brought the share price down to the double zeros and eventually slid into the triple zeros. STTK stock has been valued at triple zero price levels for over two months now, currently being traded at $0.0003. The high risk of dilution makes the company’s shares an investment which should be pursued only after conducting thorough due diligence.
Last Friday, Rich Pharmaceuticals, Inc. (OTCMKTS:RCHA) reported issuing a convertible promissory note to notorious toxic financier JSJ Investments, Inc. The note is in the principal amount of $55 thousand.
Under the terms of the agreement, JSJ Investments has the right to convert the sum into shares of RCHA‘s common stock at a conversion price equal to a 47.5% discount to the lowest average price for the 20 days prior to conversion. This makes for a high risk of dilution of RCHA stock, as the conversion price is solely dependent on the ticker’s performance on the market.
There have been several instances in which the company has sought financing pursuant to filing its latest 10-Q. On October 9, the venture announced securing a debt in the amount of $4.5 million, provided by Macallan Partners, LLC, to fund phase 2 clinical trials in acute myelocytic leukemia.
On October 6, Rich Pharmaceuticals issued 220,792,028 shares of restricted common stock to Imagic, LLC under an assignment agreement. On the same date, RCHA granted options for the purchase of 3 million shares of common stock to Mr. Ben Chang, as well as an additional 8 million bonus shares of restricted common stock.
On September 19, RCHA entered into a master convertible promissory note with Typenex Co-Investment, LLC in amount of $64.5 thousand. This deal is also toxic, as the conversion price is equal to either 60% of the market price calculated at the time of conversion, or 55% of the market price, if the company’s stock price is below $0.03.
As this point in time, RCHA stock is a risky investment which should be pursued only after carrying out thorough due diligence on the company.
Yesterday, Real Estate Contacts, Inc. (OTCMKTS:REAC) filed a form 8-K with the SEC, announcing the company had reached the decision to increase its amount of authorized stock. REAC elected to increase the company’s authorized capital by 5 billion shares.
The company had 950 million A/S before the increase was made which now makes the amount available for issuance over five times greater than before. It may not be surprising then, that REAC stock plummeted yesterday, losing 50% of its value in price. The ticker sunk to the triple zero price levels, closing at $0.0006.
There has been instability in the price of Real Estate Contacts’ shares as of late, as well as a higher volume in recent sessions than usual. Whether the hesitations and higher trading volume are a sign that investors are starting to lose faith in the company and are dumping their shares, remains to be seen. Until REAC stock can stabilize, investors should weigh out the risks before investing in the company.
Yesterday, Viaspace, Inc. (OTCMKTS:VSPC) filed an 8-K with the SEC, reporting VSPC had secured a $40 thousand loan from Kevin Schewe, a director of the company. Pursuant to the agreement, the registrant issued Mr. Schewe 10 million shares of common stock at a conversion price of $0.004 per share.
The company has a very high common stock count which amounted to 1,522,788,215 shares O/S by August 11 when the venture submitted its latest quarterly disclosure. Since then, the company has received four loans from Mr. Kevin Schewe. VSPC got a total of $83 thousand from the three previous agreements. The conversion price under these financings has ranged between $0.0076 and $0.0038.
For the there fundings between August 20 and October 29, VSPC issued a total of 15,078,948 shares of common stock to Mr. Schewe. The fact that the venture has sought financing from a director of the company on multiple occasions is concerning enough in its own right. The high share issuance for securing the financings is a red flag which should be considered before investing in VSPC stock.
Yesterday, High Performance Beverages Company (OTCMKTS:TBEV) filed an 8-K report, announcing the company had issued a $500 thousand convertible promissory note on October 17. The note has an interest rate of 1% per annum and a maturity period of six months.
Under the terms of conversion, the holder can convert the note into TBEV common stock shares 12 months after the issuance date. The note is convertible at a price equal to 56% of the lowest trading price on the market during the 5 trading days prior to the conversion date. These conditions make the debt toxic, as it makes for a high risk of dilution of TBEV stock.
Another red flag around High Performance Beverages Company is the notification of late filing NT 10-K received on Wednesday, as the company disclosed that its annual report will not be filed withing the 90 days pursuant to the end of the last quarter of the fiscal year.
Yesterday, Applied DNA Sciences, Inc. (OTCMKTS:APDN) announced via 8-K filing that the company will make a reverse stock split at a ratio between one-for-forty (1:40) and one-for-sixty (1:60). The exact ratio will be determined by the board of directors of APDN.
The certificate of amendment of APDN common stock reduced the authorized number of shares of the company’s common stock from 1,350,000,000 to 500,000,000 shares. At the effective time, every 60 shares of common stock issued and outstanding were automatically combined into one share of common stock issued and outstanding.
A reverse stock split impacts a company’s market trade significantly, as the share price automatically increases by a great deal. The venture’s performance is a key factor for the successful adaptation towards the higher market price, as Applied DNA Sciences will have to prove its potential as a developing company in order for investors to accept the higher value of APDN shares.
Searchlight Minerals, Corp. (OTCMKTS:SRCH) issued an 8-K report yesterday, announcing the company had sold an aggregate of $1,005,700 of securities in a private placement to certain investors. SRCH reportedly sold 5,028,500 units at a price per unit of $0.20.
Each unit consists of one share of SRCH common stock and one half of a common stock purchase warrant. Each full warrants entitles the holder to purchase one share of the company’s common stock at an exercise price of $0.30. Doing the math, this makes for a total of 7,542,750 shares of common stock to be issued for total proceeds of $1,508,550 from the sales of the units and exercise of the warrants.
With the current trading volume of SRCH stock, this raises the risk of dilution significantly. It should be noted that 4,395,000 of the units were sold to 16 investors, while the remaining 633,500 units were issued to 13 note holders for cancellation of debt in the aggregate of $126.7 thousand. Currently, the company has 135,768,318 O/S. Surveying the risks around an investment in Searchlight Minerals stock would be a wise decision at this point in time.
AnythingIT, Inc. (OTCMKTS:ANYI) entered into an agreement with notorious toxic financier Vista Capital Investments, LLC yesterday. As described in a form 8-K submitted by the company, ANYI agreed to issue a convertible promissory note in the principle amount of $250 thousand.
The terms of the agreement are not favorable to ANYI. The conversion price for each share is the lower of $0.01 or 60% of the lowest market price from the 25 trading days prior to the notice of conversion. Under these terms, the dilution which may occur to ANYI stock depends solely on the ticker’s movements up and down the charts.
While ANYI may prepay the note at any time during the 90 day period after the issuance date, the company must give a 10 day notice for the repayment to Vista Capital Investments, LLC and the sum is to be repaid at a 150% premium.
The risky deal that ANYI entered into calls for investors to do their thorough due diligence on the company before considering making an investment in its shares.
AccelPath, Inc. (OTCMKTS:ACLP) filed an 8-K yesterday, announcing the company’s decision to issue 1,525 shares of series J preferred stock valued at $1,000 which makes for $1,525,000. The shares have been issued to an entity called Village Tea Distributors, Inc. pursuant to a securities purchase agreement between the two companies.
ACLP will acquire 70% of the total common and preferred stock of Village Tea Distributions from its majority shareholders. This will make Village Tea Distributions a majority-owned subsidiary of AccelPath.
ACLP, as purchaser, made a decision that raises the risk of dilution of its common stock by issuing the series J preferred stock under the following conditions. The shares will be convertible at the holder’s option into shares of AccelPath’s common stock at a conversion price equal to 80% of the lowest closing market price of ACLP stock during the 30 trading days preceding the conversion date.
Such financings are known as a ”toxic financing”, as they make for an infinite dilution of the registrant’s common stock, with the rate of dilution depending solely on the market price of the company’s shares. Having this in mind, it may be wise to weigh out the risks before making an investment in ACLP stock.