This is how Tom g explained it to me along time ago, even though they did not borrow any funds from the SEDA they signed, Michelex did get $1 MIL from Cornell BEFORE they actually signed the deal, they filed this with a form REG-DEX, which is the form for a private placement, if you look at the filings back in Sept./Oct. 2004, you will see the REG-DEX filing, it is a paper filing so you cannot read it online, but that was the filing as I understood it from Tom G. Now, Cornell had only converted between $4-500K worth of stock when they were interupted. I believe Tom G first asked Cornell to stop selling shares and michelex was going to pay cash back to Cornell instead of them continuing to sell shares, this was back in the spring of 2005, and then a couple months later in July of 2005 the SEC began their Investigation of Cornell for short-selling 9 of their clients including Cornell. Bottom line of how it affects us now is the fact that Michelex never paid off Cornell, and now they are back to collect by getting convertible debentures thru the transfer agent. If you want to verify this i suggest calling the company, this is how it was explained to me, this is the best I can do for you.
