Debt Default and Seizure Risk
Please read the last 10Q (December 21) about payment defaults on October 31 and November 30 to Trafalgar Capital and that institution's ability to seize the company's assets. That could lead to an immediate Chapter 13 and worthless stock. Here is the quote from the 10Q:
"We did not make the payments to Trafalgar under any of our debt instruments that were due by October 30, 2009, which aggregated $41,326 and €336,581. Nor did we make any payments due on November 30, 2009, which aggregated $33,797 and €261,407. Accordingly, as of November 30, 2009, we owed Trafalgar the sum of $75,123 and €597,988 for past amounts due under these instruments. Accordingly, we are in default under all of the debt instruments to which we are a party in favor of Trafalgar. As a consequence, Trafalgar is entitled to exercise all of its rights under the various agreements we entered during the period June 2008 through August 2009, including seizing all of our assets which would terminate our operations."
I'm also concerned about the company not filing an 8K to disclose the default (a major Material Event), when the missed October 31 payment (triggering default) occurred. That could lead to an SEC trading halt (I've seen them halt for less). The company also delayed the 10Q filing until December 21.
The likelihood of further missed payments and action is pending, e.g. a missed December 31 and January 31 payment would place them in 90 days past due and 4 missed payments for any Notice of Default as prelude to seizure. It's unclear when or if Trafalgar will exercise a seizure or whether the company can rework the debt issues (no filings since the 10Q).
I have no postition long or short and am not a paid poster. I came across these problems in the course of normal DD.
I request the Moderator's sticky this post and add the info to the iBox.
AI
