That's an easy one
New Note Holders
The Nutmeg Group, L.L.C.
$42,648.90
Nutmeg MiniFund II, LLLP
4,758.82
Nutmeg Lightning Fund, LLLP
46,019.00
Nutmeg October 2005, LLLP
109,304.96
Nutmeg/Michael Fund, LLLP
216,548.19
Nutmeg/Fortuna Fund LLLP
561,721.98
Nutmeg/Patriot Fund, LLLP
688,523.65
Nutmeg/Mercury Fund, LLLP
1,000,526.57
Nutmeg MiniFund, LLLP
114,868.96
Total New Principal on December 22, 2008
$2,784,921.03
As a result of the above interest calculations, the Company could be obligated to pay a maximum interest rate of 25% per quarter, and at no times shall pay less than 2.5% per quarter. For the year ended December 31, 2008, the Company accrued interest expense of 2.5% per quarter on these New Notes. The total accrued interest on the New Notes on through December 31, 2008 was $139,246. Under the terms of the New Notes, this amount is added to the principal of the notes as of December 31, 2008. The adjusted principal balance of the New Notes is $2,924,167 as of September 30, 2009.
Each of the aforementioned New Notes was entered into by the Company with a stipulation by the Company that stated that the Company executed the New Notes under the stipulation that it did not agree with the interest calculations. The New Notes were executed as written because the Company and the holders agreed that it was in the best interest of both parties to do so. However, both parties agreed that they should renegotiate the interest calculations under the New Notes. These calculations shall be tied to a profit-sharing calculation tied to stock appreciation, but under less onerous terms as written in the New Note documents. Although we were actively attempting to renegotiate these notes, we are currently unable to renegotiate our notes with the Nutmeg Group who hold a substantial amount of our notes payable (as of September 30, 2009 the total principal balance on these notes was equal to $2,784,921). On March 25, 2009, the SEC froze the assets of the Nutmeg Group, LLC and other related entities. This action may negatively impact our ability to renegotiate these notes.
