Starting up a network can often take hundreds of millions, it is true. So $35 million in debt capital is not a problem in itself. The problem is that it resulted in only $20 million in assets (and that's their book value; their liquidation value is likely even less, only around $5 million) and a badly damaged company. It was poorly spent. To shareholders, that $35 million is a millstone and is why we've been diluted so significantly. That's why Olsen lied about it, implying it was only around $7 million.
That wasted capital is a sunk cost; we shareholders bore its cost and our upside is now severely limited by it unfortunately.
I really hope that the debt had been converted into all those new shares. That would be the one saving grace here.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.