Medient Studios Inc. (fka MDNT)

[fLUK3]

Did you happen to read the 8K for that financing.

This credit line is secured by all assets of the registrant except for the real property leased from the Effingham County Industrial Development authority, any fixture installed on that property, and any equipment required to develop that property. Unless terminated earlier, the credit agreement will mature on February 15, 2014 unless extended for an additional six month period, in which it will mature on August 15, 2014, and the principal amount outstanding thereunder, together with all accrued unpaid interest and other amounts owed thereunder, if any, will be payable in full upon such date. Loans under the credit agreement will bear interest at a rate of 12% per annum.


Pursuant to the note, TCA has the right to convert all or any portion of the outstanding amounts due into common stock of the registrant at a price equal to the conversion amount divided by 85% of the lowest daily volume weighted average price of the registrant’s stock during the five business days immediately prior to the conversion date.

Basically 6 months (12 if they file for extension) to pay back a 5 million loan. They haven't generated that kind of profit in their time in business, so that means basically it is a convertible. Which we almost already knew that.

But here is where the kicker comes in:

These shares are exempt from registration under Section 4(a)(2) of the Securities Act

So basically they do not have to register the shares they receive and just start placing them on the open market.

Granted I have still yet to do the math on what they would need the pps to be to make a profit factoring in an 85% conversion rate as well as the 12% interest rate.