Given that the circumstances that "our ceo" found himself in were as Chad Sykes described, is "our ceo" really uneducated enough in the world of real business not to know that the very first place he should have gone with the problem was to his shareholders?
Think about it, who else is in the same boat he is if he's having a money crunch, US, that's who, and either ignorance, stupidity or hubris apparently kept him from doing not only the right moral and honorable thing, but from making the best business decision as well.
Had he simply done the "right thing" at the time he knew he was in trouble, then a variety of solutions would have been ready and timely options to help him through this situation and the challenges he's going to encounter as he makes what is appearing more and more to be a feeble effort to proceed into and through the operational, manufacturing and marketing stages of the exercise.
If, as I believe, he’s broke and clueless, then the only way to get out of this is to do what he knows, just like the ignorant yet stubborn financial “one trick pony” that he’s shown himself to be, and that’s sell more stock, period, end of story, and with that one trick, he’s going to wipe out the longs, plain and simple.
A three tranche (not the bond kind) offering consisting of three levels of participation: senior debt secured by the assets of the corporation and the receivables, mezzanine level debt convertible to equity and straight equity would provide a secured instrument with a sweet upside for the investors when and if things start to pop.
A simple issue of preferred stock with a high coupon that comes with a common stock convertible over an X year period at decreasing rates would have seen him through as well.
Lastly, if he has one ounce of integrity in his body, he should do a warrant dividend to the current shareholders in a degree of significance that contemplates and addresses the reverse split that IS coming.
But being honest with the shareholders would have been step 1, and he couldn’t do it, and in that failed responsibility, he shows us all precisely what kind of a person he is, and it’s not pretty.
