I have spent alot of time reading, and talking to some people in private messages to make sure my math is correct before posting this. This is all my opinion, but I believe the CD deal is completely done and here is why. The first part explains why they are done, the second part explains why so few were left.
1) From the 10QSB "While the debentures are subject to restrictions on conversion, upon default the holders of the debentures could convert such debentures into approximately 43,975,391 shares based on the market price on September 30, 2007. Such issuances would reduce the percentage of ownership of our existing common stockholders and could, among other things, depress the price of our common stock. This result could detrimentally affect our ability to raise additional
equity capital. In addition, the sale of these additional shares of common stock may cause the market price of our stock to decrease.
The price on 30Sep07 was .031. meaning they were paying off the equivalent of $1,363,237. $1,363,237/.031=43,975,391 (I can't speculate on conversion ratios, I am sure they converted at a discount and it was a smaller amount, but for the simplicity in the math involved we will go with straight conversion.) The dilution that took place on 16Nov07 was 61,885,554. The price on 16Nov07 was .022. 1,363,237/.022=61,965,318. A difference of 100,000 is close enough when dealing with tenths/hundreths of a penny for conversion rates.
How did we get this low on CD's?
2) From the 10QSB "On September 18, 2007, the Hacketts Merger Agreement was amended (the "Stock Purchase Agreement Amendment") to reduce the up-front payment to $1,500,000 and to add an additional future payment of $500,000 due at month fifteen. In addition as part of the closing the Company repaid in full a loan of approximately $494,000. This transaction closed on November 7, 2007."
One of three things happened here.
a) TS paid off a loan that the company owed, one that would have transeffered with the company.
b) TS at the last second on 07Nov07 said sure, I'll pay you $494,000 extra for your company, even though we have been talking $6,000,000 this entire time.
c) Hacketts guys noticed that crappy conversion rate rate and said heck no, pay that off somehow/someway or restructure the conversion rate before we come over.
I think it is option number C. Regardless, we know that TS's accountants computed 43 million of O/S left based on the 30Sep07 rate, we know that number matches the 16Nov07 rate almost perfectly. We have alot of smart people on this board that did alot of number crunching after the 10Q was released on 14Nov07. We have know idea of what transactions happened after 30Sep07 that they didn't need to know about. TS doesn't have to tell us until the next 10Q that the debt was restructured/paid off, he did however hint to that fact with a statement of how many O/S shares were left. Why would he do this? Who knows, maybe he wants his friends to be able to load up while they can.
BTW, this also explains the reverse trend without news, no more shares being spilt into the marketplace.
"No bastard ever won a war by dying for his country.
He won it by making the other poor dumb bastard die for his country."
-General Patton
