MPEG looks bad, maybe a momentum play (down) read the following
Looks like the CEO had some good reasons to resign, IE no money and lawsuits.
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LITIGATION INVOLVING THE COMPANY The Company and its officers and directors are involved in a number of legal proceedings. Such litigation includes an action by the Company against former directors and officers of the Company and alleged financial consultants to the Company for, among other things, breach of fiduciary duty, fraud, breach of contract and RICO. Three of these defendants have filed cross-complaints against the Company and its officers and directors. Further, a former employee of the Company has filed an action for
breach of contract, and an alleged creditor of the Company has filed an action for the repayment of monies. As a result of litigation, the Company will have to spend a substantial amount of time and fees in prosecuting and defending itself in these matters. See "Legal Proceedings."
SECURITY INTEREST IN THE COMPANY'S ASSETS. The Company has entered into a $5 million Credit Facility and Note which expires on June 30, 1998. As of May 1, 1998, the amount of principal and interest outstanding under the Credit Facility and Note was $4,491,621. The outstanding principal and interest is secured by all of the assets of the Company. Therefore, in the event the Company is unable to repay the Credit Facility, the holder will hold a first-priority security interest in the Company's assets upon default. The holder of
the Note has indicated that it intends to convert the Note into shares of Common Stock. However, no assurance can be given that the holder will convert the Note. If the holder does not convert the Note, the Company will be required to request the holder to extend the Note or seek some other source to repay the Note. No assurances can be made that the Company will be able to repay all amounts due under the Credit Facility and Note when required or that a default will not occur prior to repayment. See "Management's Discussion and
Analysis and Results of Operations."
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