I think it is unlikely that HITT would qualify even for toxic convertible financing.
One person who serves as a "facilitator," i.e., front man, for toxic convertible financing has told me that among the several funds he works with, only one will deal with bulletin board stocks, and it is particularly cautious in choosing BB companies.
You see, the people who do that kind of financing are interested in getting their money out in much less than a year. They need three things: (1) stock liquidity, (2) a risk that isn't too high that the stock will fall apart or cease trading during that time, and (3) trust in co. management that they will do two things: file the required prospectus for the common stock and honor the requests to convert into common stock, on demand.
The second item is pretty bad, but the third is horrible and I believe it would pose an unsurmountable obstacle to getting funding. Basically it amounts to this: would you give millions of dollars in cash to someone who served time in federal prison for fraud, and give it to him right now, on his assurance that in the future he will do certain things for you? |
