The new financing proves that something is broke...
These 2 'Loans' , for $300,000 each,
COST 30% INTEREST + 5 MILLION NEW SHARES.
Here's the proof :
***************************************************
$300,000 Secured Convertible Debenture:
On May 6, 2008, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Agile Opportunity Fund, LLC (“Agile”). The Purchase Agreement contemplates the Company’s sale to Agile of a Secured Convertible Debenture (the “Initial Debenture”) in the original principal amount of $300,000 and maturing on November 6, 2009, and a second Secured Convertible Debenture (the “Additional Debenture” and, collectively with the Initial Debenture, the “Agile Debentures”) in the same original principal amount and having the same maturity date as the Initial Debenture. The purchase price of each of the Agile Debentures is $300,000. The Purchase Agreement further provided that, for no further consideration, the Company issue to Agile 3 million shares (each, an “Initial Equity Incentive Share”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), in connection with the sale and issuance of the Initial Debenture and an additional 2 million shares (each, an “Additional Equity Incentive Share” and, collectively with the Initial Equity Incentive Shares, the “Agile Equity Incentive Shares”) of the Company’s Common Stock in connection with the sale and issuance of the Additional Debenture.
The Agile Debentures will bear interest at the rate of 15% per annum, payable monthly, although the Agile Debentures further provide that, in addition to interest, Agile is entitled to an additional payment, at maturity or whenever principal is paid, such that Agile’s annualized return on the amount of principal paid equals 30%. The principal and all accrued and unpaid interest under the Agile Debentures are, at the option of Agile, convertible into shares of the Company’s Common Stock at a conversion price of $0.05 per share (subject to an anti-dilution adjustment).
********************************************************
AND, here's why copi HAD TO PAY
30% INTEREST + 5 MILLION NEW SHARES :
********************************************************
The Company’s primary need for cash during the next twelve months is to satisfy trade payables, current operating costs and dividends due on the Series B Preferred Stock. Current cash flow requirements are expected to be approximately $246,000 per month, including payroll, rent, utilities, insurance, professional fees and dividends as well as the addition of a sales executive. The Company receives approximately $146,000 a month from its current customer base. Until cash-flow neutral operations are attained, of which there can be no assurance, additional capital will be required to finance current operations as well as any growth. The balance of the proceeds raised from the 2007 Series A Preferred Stock offering and the 300,000 debenture issued in May 2008 is anticipated to be used to fund the Company’s operating shortfalls over the next three fiscal quarters.
15
The Company’s continued losses raise substantial doubt about its ability to continue as a going concern. Operating losses have resulted from a shortfall of sales revenues to cover the Company’s operating and marketing expenditures during the implementation of the Company’s operating plan, which targets significant sales growth and is long-range in nature. Such continuation is dependent upon the Company’s ability to increase revenues, control costs and operate profitably.
The Company (i) is seeking to employ sales executives to increase the marketing and sale of the Company’s services; and (ii) has retained an investment banker to explore acquisition opportunities that may diversify the Company’s existing range of services, as well as to assist the Company in obtaining additional financing as required. There is no assurance that the Company will be successful in attaining these objectives or that attaining such objectives will result in operating profits, positive cash flows or an overall improvement in the Company’s financial position.
**********************************************************
To us, this 10-Q clearly confirms that :
1] copi is burning cash, faster than ever. Forcing copi
to borrow cash at 30% Interest [+ 5 Million Free shares].
2] And, still, the lender (Agile?) would only loan small
amounts of cash, for very short time periods, And, require
personal guarantees of collateral from both of copi's top 2
execs, who are also copi's Only Directors.
3] copi AGAIN GUARANTEED THAT IT WILL KEEP BURNING CASH,
FOR AT LEAST 9 MORE MONTHS, as copi admitted :
"the 300,000 debenture issued in May 2008 is anticipated to
be used to fund the Company’s operating shortfalls over the
next three fiscal quarters."
4] And, the cash burn-rate will Increase, due to the new,
and overpaid Sales VP, [who is already hired], And, his
new 'senior' [meaning, also overpaid] sales helper,
who is just about to be hired.
5] Don't be confused by the spin regarding 'non-recurring'
costs. All companies have them, Every Quarter. And, copi
has not only Always had them, but, it copi's case, those
'non-recurring' costs are Always a Huge percentage of
copi's Quarterly cash losses. They will Never Go Away.
extra, Sincerely. But, just opinions, based on the Facts,
that were just Filed with the SEC, in copi's own 10-Q.
P.S. ; We expect copi to drop 50% within 2 weeks, with
most of it in the next day or three. The shorters have
probably already placed their sell orders, to be executed
at dawn, at the highest prices for the next 2 weeks.
Also, copi's next 3 Quarters will probably be progressively
worse. We believe that copi must sell-out, Before Christmas,
or face BK. And, the 'fire-sale' sell-out price will Not
Leave Any Cash for Any Common shareholder. Because ALL of
The Preferreds MUST BE 100% PAID-OFF, FIRST. [Actually,
second, after all of copi's other bills + loans are 100%
paid-off, First.]
P.P.S. ; We really don't expect the 'Preferreds' to be
paid-off at all. Rather, the copi 'execs' that 'own' them
will probably just get 1-year 'employment contracts' , at
grossly excessive 'salaries' , paid by their new boss,
at the company that 'acquires' copi. We still think it will
be VeriSign, because they already control almost 90% of
All of copi's 'revenue' , and do 90% of the work, with
almost no 'help' from copi.
AI
