This wasn't very funny for RMTD shareholders. In fact, it's actually devastating.
On July 1, 2010, the holders of the Company’s (i) Series A Senior Secured Convertible Promissory Notes, (ii) Original Issue Discount Series A Senior Secured Convertible Promissory Notes, (iii) Series B Senior Secured Convertible Promissory Notes and (iv) Original Issue Discount Series B Senior Secured Convertible Promissory Notes, (collectively, the “Secured Notes”) foreclosed (pursuant to Section 9-620 of the Uniform Commercial Code) on the collateral securing the Company’s obligations under the Secured Notes, including the assets used in the Company’s business operations.
The foreclosure was in full satisfaction of the Company’s obligations under the Secured Notes, which had an outstanding principal amount, exclusive of interest and penalties of $7,618,951. The Company accepted the foreclosure based on, among other things, that (a) there existed material events of default under Secured Notes (including the failure to pay principal amounts when due); (b) all of the indebtedness and other obligations under the Secured Notes were unconditionally owing by the Company without offset, defense or counterclaim; and (c) there was no alternative transaction or source of funding available to the Company that would have permitted it to satisfy its obligations under the Secured Notes.
As a result of the foreclosure, the Company has ceased its business operations and terminated the employment of substantially all of its employees, including senior management.
The Board of Directors intends to explore options for the Company to acquire a new operating business. However, there can be no assurance that the Company will be successful in acquiring a new operating business or, if successful, that the terms of any such acquisition would provide existing stockholders with a significant participation in the continuing business.
If the Company is unable to identify and acquire a new operating business, the Board may recommend that the Company wind up its remaining business affairs, complete the liquidation of its remaining assets (if any), which may or may not be sufficient to adequately provide for the payment of its known obligations and liabilities, and dissolve the Company under Delaware law. We do not anticipate that our stockholders would receive any distribution in any such liquidation and dissolution.
