Ann: Strategic investor provides DW8 access of up to $10m funding, page-57

A lot of the convertible notes that I work with are issued under the premise that the interest repayments aren't made in cash, they're made in shares as well. Everyone talking about the incurred expenses don't understand capital markets.

For example:

Triton purchases $5,000,000 of convertible notes that carry an 12% interest rate and a 10% conversion discount. In a qualified financing that occurs 12 months after the convertible notes are sold, lets say DW8 was at $0.05 per share. At this point, the notes will have accrued $600,000 in interest, making the amount owed to the note investor $5,600,000. With the 10% discount, the conversion price for the notes is $0.045 per share, and the investor receives 124,000,000 shares of the new stock.

I'll ask DT or Clinton for further clarification.