"This sale is of great importance to the future of Fonix. It gives us an
immediate infusion of capital that will allow us to execute our Internet and
Embedded business strategies as well as reduce certain Company liabilities."
Now how much does the company owe the officers, directors, and other members of the in-crowd?
Company's 10Q
biz.yahoo.com
At June 30, 1999, the Company had an unsecured revolving note payable in the amount of $257,965 in principal and $7,173 in accrued interest to SMD, a company owned by two individuals who are executive officers and directors and one individual who is a former officer and director of the Company and who each beneficially own more than 10 percent of the Company's common stock. The weighted average balance outstanding during the six months ended June 30, 1999 was $134,217. This revolving note is payable on demand and bears interest at an annual rate of 12 percent. The maximum amount outstanding under this revolving note during the period ended June 30, 1999 was $257,965. In 1999, advances to the three individuals in the amount of $59,986 were applied as a partial payment of this note.
At June 30, 1999, the Company had a notes payable to L&H in the amount of $1,100,000. The note was payable in full including accrued interest on July 28, 1999.
At June 30, 1999, the Company had unsecured demand notes payable to former Articulate stockholders in the aggregate amount of $4,063,597 related to the acquisition of Articulate in 1998. These notes were payable on demand any time after November 30, 1998. In December 1998, the holder of a $407,971 note demanded payment. In connection with this demand, the Company paid the holder a partial payment of $50,000 in 1998, extended the date on which demand could be made to March 15, 1999 and increased the interest rate to 11 percent per year. No additional demand has been received for payment of this note. In 1998, the Company also negotiated extensions of $986,481 of the notes to May 30, 1999 and adjusted the interest rate to 10 percent per year. During the six months ended June 30, 1999, the Company made partial payments totaling $800,000 on a $2,535,235 note and agreed to pay the balance of all of these notes in connection with the sale of the HSG to L&H.
At June 30, 1999, the Company had unsecured demand notes payable to former Papyrus stockholders in the aggregate amount of $1,710,000, which notes were issued in connection with the acquisition of Papyrus in 1998. The notes were payable in various installments from February 28, 1999 through September 30, 1999. In April 1999, the Company entered into agreements with five former Papyrus shareholders to reduce the aggregate amounts payable to them under these notes from $1,632,375 to $1,188,909, which amounts will be paid in connection with the sale of the HSG to L&H. The aggregate remaining balance of $77,625 of the notes payable to former shareholders of Papyrus will also be paid in connection with the closing of the sale of the HSG to L&H.
At June 30, 1999, the Company had an unsecured revolving note payable in the amount of $257,965 in principal and $7,173 in accrued interest to SMD, a company owned by two individuals who are executive officers and directors and one individual who is a former officer and director of the Company and who each beneficially own more than 10 percent of the Company's common stock. The weighted average balance outstanding during the six months ended June 30, 1999 was $134,217. This revolving note is payable on demand and bears interest at an annual rate of 12 percent. The maximum amount outstanding under this revolving note during the period ended June 30, 1999 was $257,965. In 1999, advances to the three individuals in the amount of $59,986 were applied as a partial payment of this note.
At June 30, 1999, the Company had a second note payable to L&H in the amount of $4,600,000. This note was payable in full including accrued interest on July 28, 1999 and bears interest on the same terms as the loan of $1,100,000 described in the preceding paragraph. The loan is secured by all the assets of Fonix/ASI including its intellectual property rights represented by patents, copyrights and trademarks. The loan is further secured by all the Company's stock of Fonix/ASI. L&H agreed to extend the due date to the earlier of the closing of the sale of the HSG to L&H or September 30, 1999. This note was authorized for a total of $4,900,000 and the additional $300,000 was received by the Company in July 1999. On August 12, 1999, L&H agreed to increase this loan by an additional $1,200,000 subject to the existing terms of the loan. The Company received funds from this loan on August 13, 1999 and bears interest at the prime rate as published in The Wall Street Journal under the heading "Money Rates" (7.75 percent at June 30, 1999) plus 2.0 percent. The loan is secured by all the assets of Fonix/ASI, a wholly owned subsidiary of the Company, including its intellectual property rights represented by patents, copyrights and trademarks. L&H agreed to extend the due date to the earlier of the closing of the sale of the HSG to L&H or September 30, 1999.
At June 30, 1999, the Company had an unsecured note payable to an officer of the Company in the amount of $20,000, which bears interest at an annual rate of 10 percent and was due December 31, 1998. The holder of this note agreed to extend the due date to September 30, 1999.
At June 30, 1999, the Company had an unsecured note payable to an officer of the Company in the amount of $68,691 which bears interest at an annual rate of 10 percent and was due on or before July 31, 1999. The holder of this note agreed to extend the due date to August 31, 1999.
The Company had negative working capital of $18,554,002 at June 30, 1999 compared to negative working capital of $14,678,975 at December 31, 1998.
At least this is good news for the transferred employees - they go to work for a real company. |
