(2)
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Based on 28,672,091 shares of Common Stock believed to be outstanding as of April 15, 2020. This number is an estimate of the outstanding shares of Common Stock supplied by the Issuer. Based upon advice of counsel, the Reporting Person is filing this Schedule 13G even though it has never been able to confirm with the Issuers stock transfer agent (the TA) the number of shares of Common Stock outstanding as of the close of business on April 15, 2020 of for that matter the number of shares of Common Stock of the Issuer for each other trading date in April 2020. During March 2020 , the Reporting Person relied on the number of issued and outstanding shares of Common Stock in the Issuers Form 10-Q for the quarter ending September 30, 2019 in order to determine the size of conversions of its Note in order not to exceed the 4.99% beneficial ownership limitation contained in the Note. Commencing April 1, 2020, the Reporting Party emailed the TA to confirm the number of shares of Common Stock outstanding prior to conversions of its Note in order not to exceed the 4.99% beneficial ownership limitation. On April 7, 2020, the Reporting Person was advised in an email from the TA that 173,975,797 shares of the Issuer were issued and outstanding as of such date. When the Reporting Person questioned the validity of that number in several emails on April 7, 2020 and April 8, 2020, it was advised by the TA by email that there were corrections being made to such number and the TA would provide the correct number of issued and outstanding shares once the corrections had been made. The TA subsequently advised the Reporting Person on April 8, 2020 in an email that as of such date the Issuers issued and outstanding number of shares of Common Stock was 500,000,000. The Reporting Person followed up in a call with the person at the TA who provided such information who confirmed such information and directed the Reporting Person to a more senior party at the TA to confirm the information set forth in the email. On April 8, 2020, the more senior party at the TA confirmed to the Reporting Party in a call that there were in fact 500,000,000 shares of Common Stock of the Issuer issued and outstanding as of that date. The Reporting Person drafted an internal memorandum that day confirming the contents of the email and the call. The Reporting Person relied upon such number of issued and outstanding shares for that and a few subsequent conversions. Upon a further subsequent conversion of Notes into shares of the Issuers common stock on April 20, 2020, the Reporting Person asked the TA to reconfirm the number of issued and outstanding shares of the Issuers Common Stock on such date. The TA again reconfirmed such information in an email on April 22, 2020. At such time, the Reporting Person was made aware by its broker that other Noteholders were being provided by the TA with different numbers of issued and outstanding shares of the Issuer as of such date. Based on the difference between the number of issued and outstanding shares of common stock the Reporting Person received from the TA and the brokers disclosure of the conflicting number of shares of issued and outstanding shares that were provided to other Noteholders, the Reporting Person canceled this conversion, On April 22, 2020, the Reporting Person called the TA and learned that the TA had mistakenly included unissued shares reserved for conversion and exercise of derivative securities as part of the issued and outstanding shares of the Issuer. The Reporting Person made further conversions of its Note relying on subsequent information provided by the TA by email that the Reporting Person believed to be correct after due inquiry. The Reporting Person had a practice of selling shares of Common Stock issued upon conversion on the same day or the next day since it has never had any intent to own more than the 4.99% beneficial ownership limitation and never has had an intent or power to control the Issuer. Due to the errors of the TA, the Reporting Person believes it beneficially owned more than 5% or 10% as of certain dates in April 2020. The Reporting Person is simultaneously filing Reports on Forms 3 and 4 to reflect the estimated beneficial ownership on the date the Reporting Person believes it may have inadvertently beneficially owned at least 10% of outstanding shares and transactions executed by the Reporting Person after that time as required by Form 4. At all relevant times, the Reporting Person reasonably relied on information provided by the Issuer and the TA in concluding that it held less than 5% of the Issuers Common Stock outstanding. As of the close of business on May 5, 2020 the Reporting Person owns no shares of Common Stock. Both the Issuer and the Reporting Person and its counsel have made numerous written requests of the TA requesting that it provide the number of outstanding shares as of the close of business on each trading day in April; as of the date of filing of this Schedule 13G the TA has not complied with any of these requests. To further reflect possible issues with the TA, the Reporting Person received an email from the TA after the close of trading on May 1, 2020 setting forth the issued and outstanding shares of Common Stock as of May 1, 2020. In reliance upon that number, the Reporting Person provided a notice of conversion to convert a portion of its Notes into shares of the Issuers common stock. On Monday May 4, 2020, the Reporting Persons broker reported that other investors were reporting lower amounts of issued and outstanding shares from the TA; the Reporting Person immediately reduced the amount of its May 1, 2020 conversion.
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