Ok this is how CPN's work in most cases. A compan
Post# of 11107
Posted On: 05/01/2015 2:04:02 PM
Re: SpearOfDestiny #4727
Ok this is how CPN's work in most cases. A company is approached by a lender, let's say lender A (funny that I picked that letter isn't it). Anyway, the company needs X amount of dollars to fund something within the company but doesn't have it. A says that well I'll lend you the money and you have this amount of time to pay it back in (usually no way the company will have the revenue that fast to pay it back), or if you default I get double that amount in common stock at a 1/2 reduced price based on the 5 day average PPS prior to the default occurring.
So if the avg 5 day PPS is say .01 and the company borrows $20K that means at this average share price A gets 2mil shares of common stock.
But wait the price is actually reduced per the agreement to a 5 day avg of .005. So A would end up getting 4mil shares of common stock that can be dumped back into the market at a pre-determined date set within the lending deal.
Does that help?
So if the avg 5 day PPS is say .01 and the company borrows $20K that means at this average share price A gets 2mil shares of common stock.
But wait the price is actually reduced per the agreement to a 5 day avg of .005. So A would end up getting 4mil shares of common stock that can be dumped back into the market at a pre-determined date set within the lending deal.
Does that help?
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