Ann: Options Prospectus, page-16

to be honest i would not be surprised if this was the standard operating procedure for most of the convertible notes facilities where funds are redeemable in shares at a variable conversion price. push the price lower and gain more shares. not saying it happened with our last facility with CST but there sure was a lot of downward pressure to that floor of 1.8cents.

however it's not really relevant to this new arrangement because the debt will be re-paid in cash. if the lender wants shares he does it at a FIXED conversion price of 35cents.

I'm sure these types of lenders do a whole range of financing arrangements.

thankfully for us because of our better financial position now, Ted has been able to avoid doing a finance deal of last resort- aka convertible notes and thus new arrangement resembles a standard debt financing albeit at 18% interest.

thanks for pointing your research out though. it's good to know.