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Technology Stocks : DESERT DIRT TA -- Ignore unavailable to you. Want to Upgrade?

To: Richard Mazzarella who wrote (1311)	7/25/1998 8:15:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 1539

Richard, yes, maybe it is too complex for me. There are two issues I cannot fully comprehend, the first has to do with assuring that an injection of new money can indeed save the "old money", and furthermore do it with such a risk reward ratio which is superior to other investments in the DD arena (presuming that the holders indeed want to have a stake in this arena). This was the issue that Robert got upset about in one of my earlier posts. The second has to do with the pricing of the new securities. Currently IPMCF's shares are trading at about $.005 to $.01 per share. If you indeed determined that only $1 MM of new money is required (and I have seen here numbers as high as $3 MM) the number of shares or share equivalent to be issued will have to be around 100 MM shares, which I believe is above the current authorized number of shares of IPMCF. So, right now this avenue is not feasible. A small quirk of the bankruptcy law allows a company in CH 11 to borrow money which will have priority on all prior debt (the debt for which CH 11 protection was sought). Typically the bankruptcy court will have to authorize such new debt and authorize the use of these funds. But, assume that such authorization can be obtained, then you could issue a right to acquire a debenture from IPMCF convertible into shares (in essence something like 80% of the future equity?). Since a great portion of the investors are "small investors" this instrument will have to be registered with the SEC prior to issue. The probable a cost would be some $200,000, a least $100,000 that the blood sucking auditors, and $100,000 to the clock punching lawyers. This type of cost would be involved with any kind of new issue anyhow. Typically, this cost is covered with a bridge loans from by some "smoke and mirrors" houses (I helped arranged such a bridge some more than 10 years ago) and they will demand a heavy price in the future equity (probably all their money back plus 5% to 10% of the equity of the "newly financed" company. To get such a thing going, someone (with appropriate corporate authorization) will have to spend some three to six months to prepare the background paperwork and presentations to the "blood suckers". Has anyone volunteered to do that job? Zeev