Habu: Although Harry's involvement with IDCC started way before my time, I had previously looked into it when reviewing his option grants. In regard to your statement that " Harry came into the company when it was basically upside down after it was defeated by Motorola." your timing is a little off. Harry was appointed as a director in April 1994, shortly before he loaned the company $112,500 in May 1994. At that time the Motorola litigation which started in October 1993, was still ongoing. A decision was not reached in the case until March 1995.
In regard to Harry's loans to the company. They were made in connection with a $251,250 loan from Burns family members. I don't know how much risk there was as they were short term loans, with Harry's being repaid in approximately 5 months and the Burn' loan in six months. Here is the detail as set out in the 1995 proxy statement.
"In connection with the private placement of Short Term Convertible Notes of
the Company in May 1994 (the 'Notes') Messrs. David A. Burns, Michael W. Burns
and Jeffrey S. Burns, sons of William Burns, loaned the Company an aggregate
amount of $251,250 and Mr. Campagna loaned the Company $112,500. The Notes bore interest at a rate of 11%, and as additional inducement for the lenders to advance the loans, the Company issued warrants to the lenders to purchase shares of Common Stock. Mr. Campagna waived all payment of interest on his Notes and received warrants to purchase 15,000 shares of Common Stock at a per share
exercise price of $2.50. David, Michael and Jeffrey Burns were issued warrants
to purchase an aggregate of 33,500 shares of Common Stock at a per share
exercise price of $3.75. The Notes issued to the Burns were repaid in full on
November 3, 1994 with interest, and the Note issued to Mr. Campagna was repaid in full on October 7, 1994. Although, under the terms of the Notes, the holders had the right to demand a late charge of 5% of the amount due, neither the Burns nor Mr. Campagna made such a demand."
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