Its 1000% in Cornells' advantage for the price to be very very low so when the stock goes high they can cash in larger..that in my opinion is why the option to receive stock in lieu of cash are structured that way.
The debentures are due on March 23, 2009.
Each of the 10% Secured Convertible Debentures provides for interest in the
amount of 10% per annum and are convertible at the lesser of $0.015 or 85% of
the lowest closing bid price of the Company's common stock during the 10 trading
days immediately preceding the conversion date.
The Company at its option has the right, with three (3) business days
advance written notice (the "Redemption Notice"), to redeem a portion or all
amounts outstanding under the 10% Secured Debenture prior to the Maturity Date
provided that the Closing Bid Price of the Company's common stock, as reported
by Bloomberg, LP, is less than the conversion price at the time of the
Redemption Notice. The Company shall pay an amount equal to the principal amount
being redeemed plus a redemption premium ("Redemption Premium") equal to twenty
percent (20%) of the principal amount being redeemed, and accrued interest,
(collectively referred to as the "Redemption Amount").