The .001 shares were issued in lieu of interest to note holders...

The .001 shares were issued in lieu of interest to note holders who changed to secured notes, so they have effectively paid for them by foregoing interest (the calculated price for tax purposes was about $0.028).

The current drop in price is in line with previous speculation about shorting of shares so that GEM/EEQ can get a better price. The 10 business day period for calculation of the issue price for the first tranche is about to run out so the sp is being forced down, as expected. The pressure may come off a bit once the shares have been issued and the money is in the bank, but then downward pressure will come back on again towards the end of the next 15 business day period for calculating the VWAP. The only relief from downward pressure on the sp will be very positive announcements from the company.

The lower limit of the sp will depend on how many traders are willing to make bets on buying in to make 5% or 10% or so on rises and falls of only .001 or .002 and just how much the shorters are prepared to push the price down without destroying any confidence that traders and some buyers might have. Unfortunately for current holders, the shorters (assuming they are allied with GEM/EEQ in some way) can afford to push the sp down without worrying too much about having to buy back because they are going to get their new shares issued at a low price anyway. I would expect quite high volatility from time to time.

In the long run though, they are going to want to have the sp rise (they are in it to make money) so holders grit your teeth and hang on, maybe trade a bit of you are so inclined.