On4 Communications Inc (ONCI)

[INSTATRADER]

QUICK CALL ON DEBT QUESTIONS

Q: Congratulations on settling $1.8M in debt for $600K. Can you please explain to us in a clearer way what was filed yesterday?
A: My attorneys wrote that up, and they said that was the best way to word it. The debt was actually settled for $503K and there are brokerage fees and other fees that got the number to $628K which is the actual amount.

Q: Are the shares really selling at a 45% DISCOUNT to market. Thats pretty steep if you ask me
A: Its a 25% discount when you take into consideration the full settled amount which is $628K. The actual discount is 25% on the shares actually being sold. Now, the way it is set up isnt a discount on the shares at all, the way I negotiated this, I am adding 25% to the debt amount so 1.25 * $628K = $756K which will be sold with NO DISCOUNT to market. Lets say for arguments sake we sell the shares at an avg of .01. My way will take 75.6M shares to do so. ($75.6K / .01 = 75.6M shares total). If I did it the other way on an avg sale price of .01 the math works this way: .01 * .75 (25% discount) = .0075/share conversion... on the 628K which would take 84M shares to convert the same amount of debt. We just took $1.8M off our books for less than 4% of the O/S. Those terms save shareholders 9 million shares... Thats a big deal to anyone who knows anything about business.