absolutely amazing!!
However it does appear from the wording that XA Worldwide is not investing 33 million in Stereovision, nor is it loaning Stereovision the money directly. Instead it is putting up the collateral (money?) against a loan that Stereovision must get from someone else for $ 8 million dollars for Jerusalem film and 25 million for Booty Film.
In addition XA Worldwide gets all proceeds until their collateral is released from these loans. At which point XA Worlwide and Stereovision share 50/50.
If and when Stereovision obtains the loans to produce the films it likely will be years before this 33 million in loans is paid back and the collateral released and the stockholders see any return on their investment here. On the other hand the "insiders" here can live mighty "high on the hog"
in salaries, production fees, and expenses during the next couple of years making these films.
Hopefully the 8K filing of this event will provide the actual contract between XA Worldwide, LPL Financial, and Stereovision so everyone can see what fees and or conditions are attached to the use of XA Worldwide's collateral.
However this is better than nothing, which is what Stereovision has had going for it in the past as every announced project has fallen through and has not been completed.
Due Diligence.
What are terms and conditions of this contract?
What happens if Stereovision is unable to obtain 33 million in loans from a 3rd party.
What happens if they do get the loans but are unanble to repay the 33 million in loans? If that occurs and the 33 million in collateral is called what effect does that have on the retail shareholder. Does XA have a preferred position? (I would expect that they would.) Would this make retail shareholders shares worthless.
Assuming a best case scenario they get 33 million in loans and make the movies, find distribution, and actaully turn a profit, how long will that be? 1 year, 2 years, 3 years, 5 years 10 years etc, before the retail stockholder will see any of this money going to the bottom line of Stereovision?
It a long way to go yet for the retail stockholder.
Lets hope that XA Worldwide has "arranged" the 33 million in loans for Stereovision based solely on the strength, availability, and the liquidity of the collateral they are pledging. It would be hilarious to see the head of a loan committee considering making the 33 million in loans to Jack Honour and Stereovision looking at the last 5 years of SEC filings of Stereovsion results of operations to see if they thought that loaning Stereovision money would be a wise decision.
Just a thought. XA is a private company and Stereovisoion is a public company. Could this turn out to be the most convoluted
reverse merger ever?
Well lets give Michael Prozer credit for thinking "outside the box" on this one.
The devil is usually in the fine print.
All views expressed here are strictly my own opinion based on my following of this company. Each of you should do your own due diligence and form your own opinions. I have no more inmformation than is available to each of you through SEC filings and Press Releases.
