Universal Energy Corp (UVSE)

[stock_observer_77]

ok - here are a few articles...

Good definition / explanation...
http://www.businessfinance.com/convertible-debenture.htm

Article
http://www.thestreet.com/story/10284937/3/death-spiral-convertible-just-refuses-to-die.html

Remember, without a means to raise $$$, a startup company (such as UVSE) will NEVER get off the ground. UVSE was a perfect example of a company like this.

If a business does not have a sound plan and does not make $$$, the CD will drive it into the ground. The goal is to use the $$$ wisely, incorporate your business plan, make $$$, and satisfy the CD. That's what UVSE is doing, for example.

There are some items within a CD that a company can't control (as in the case of UVSE (et al)):

- the company can NOT prevent a lender from converting
- the company MAY be able to buy out the CD, but the lender CAN REFUSE this
- the company MUST have the shares available for the conversion to take place; if not, the company must amend their authorized structure as necessary
- a lender can buyout another lender (e.g. lender A could buy out lender B assuming A and B were part of the original loan)

With UVSE, there are a handful of different lenders that are part of the $8MM original loan (i.e. one company did not lend them $8MM; rather numerous lenders were involved).

Again, keep in mind for MANY COMPANIES, this type of financing is ALL THAT EXISTS to get the company started (including UVSE).