Now their paying 18% rather than 10% retroactive to the summer. Not good. This seems like digging yourself out of quick sand. Any opinions?
This is from the last 10k
Between July 29, 1998 and September 8, 1998, the Company, through Commonwealth Associates ("Commonwealth"), placed $9,900,000 (face amount) of 10%, 120 day notes and 9,900,000 warrants to purchase shares of the Company's common stock at $0.50 per share for five years (the "Placement"). The Company allocated $8,587,066 of the gross sale proceeds to the debt and $1,312,934 to the warrants. The $1,312,934 discount applied to the face amount of the notes is being amortized into income, as interest expense, over the 120-day life of the
notes. The Company has the right to extend the maturity date of the notes for 60 days; in the event the Company exercises this right, the interest rate of the notes is increased to 18% per annum, retroactive to the issuance of the notes. For the Placement, the Company paid Commonwealth and Liberty Capital Ltd. (the Company's co-financial advisor) $1,089,000 in cash, 1,394,368 shares of common stock (valued at $865,799) and warrants to purchase 2,509,859 shares of common
stock at $0.50 per share for five years (valued at $383,002). The costs related to the Placement have been deferred and are being amortized into income as debt placement expenses over the term of the debt. |
