Axion International Hldgs Inc. (fka AXIHQ)

[fung_derf]

We have substantial convertible debt outstanding which is due beginning in August 2017.



We have approximately $15.8 million in convertible debt outstanding with maturity dates beginning in August 2017. This debt obligation is secured by all of our assets. We may not have the capability to repay these obligations when they become due, and will either need to generate appropriate cash flows from operations, raise additional capital from other sources or negotiate with the debt holders to extend the maturity to allow us to commercialize our business plan and further generate the necessary capital for ultimate repayment. If we are unable to do this, we will be forced to curtail or cease operations.



We have substantial convertible preferred stock issued, containing a redemption feature by the holder any time after their three-year anniversary of the original purchase.



We have 10% convertible preferred stock with a face value of approximately $6.9 million outstanding. At the holder’s election, it may force the redemption of their 10% convertible preferred stock any time after the third anniversary of their original purchase. Currently, we do not have the resources to redeem these securities and we are prohibited from redeeming these securities under Colorado law. Then at such time as we no longer are such restricted, we will either need to generate appropriate cash flows from operations, raise additional capital from other sources or negotiate with the preferred stockholders to eliminate or postpone the redemptions.



We are dependent on our ability to raise capital from external funding sources. If we are unable to continue to obtain necessary capital from outside sources, we will be forced to reduce or curtail operations.



We have not generated any significant cash flow from operations and we will not be cash flow positive for at least the near future. We also have limited financial resources. As a result, we will need to obtain additional capital from outside sources to continue operations and commercialize our business plan. Our ability to execute our business plan depends upon our ability to obtain financing through:



· bank and other debt financing;
· equity financing;
· strategic relationships; and/or