Pertinent Facts From last 10Q in November which is last filing made with SEC.
As of November 13, 2009, there were 121,027,909 shares of our Class A common stock issued and 119,458,740 shares outstanding
Wonder what that number is as of year end 2009?
Effective June 16, 2008, the Company and Investor Group (“Palisades’) entered into Settlement Agreement and General Release whereby Palisades agreed to extend the maturity date of the convertible debentures to December 31, 2009. Under the modified terms of the underlying Notes, the Company is required to make minimum monthly interest payments totaling $10,000, the first payment being made in August 2008. Under the settlement and related escrow agreement, the Company is required to deposit a number of shares equal to 9.99% of its issued and outstanding Class A Common Stock into a brokerage
and also
In connection with the settlement agreement, the Company entered into a consulting agreement with an affiliate of the debenture holders for a term commencing on May 1, 2008 and terminating no earlier than May 1, 2010. For the duration of the agreement, the Consultant agrees to assist the Company with implementing the Company’s business plan, assist it in identifying, analyzing, structuring and negotiating acquisitions and related activities. Under the terms of the consulting agreement, the Company agreed to pay a fee of $20,000 per month and reimburse the Consultant for reasonable expenses it incurred relating to the Company’s business. As further consideration, the Company granted warrants to the consultant to purchase 5,000,000 shares of the Company’s Class A common stock at an exercise price of the lesser of (i) $0.10 per share, or (ii) 50% of market price The warrants expire on October 16, 2013. Payment of the warrant price may be in cash or cashless, at the option of the warrant holder. The warrant shares are stated after giving effect to a one for one-thousand reverse stock split completed in October 2008.
During the nine months ended September 30, 2009, the holders advanced an additional $550,000 that was added to principal and increased principal for monthly consulting fees totaling $180,000. Also during the nine months period, the Company issued 6,000,000 shares of its Class A common stock through the conversion of $600,000 of indebtedness. The Company failed to pay the required interest payments due
still more clarification
During the nine months ended September 30, 2009, Palisades paid $180,000 on behalf of the Company to a consultant. The $180,000 was added to the outstanding balance owed the Company to Palisades. Lets See 9 times $ 20,000 yep it is $ 180,000
So If I read that right it means that they were supposed to pay interest at $ 10,000 a month to Palisades and also a consultant $ 20,000 a month , which apparently was paid by money fronted by Palisades and added to the debt.
More importantly it appears that they are saying that they have not made the required $ 10,000 a month interest payments to Palisdaes which I believe put them in default of the "conditions" of the convertible denture namely .
If an Event of Default occurs under the Notes, and, if such Event of Default is curable, such Event of Default continues for a period of 30 days without being cured, then the 10% interest rate set forth in the Notes will be increased to a Default Interest Rate of 18% per annum, and the total balance of principal and accrued interest of the debentures shall bear interest at the Default Interest Rate from the date of the occurrence of such Event of Default. and also
? If an Event of Default occurs which is not cured within its applicable cure period, if it is curable, the conversion price of these debentures after such cure period has expired shall be reduced to half of the pre-Event of Default conversion price. For clarification, if the conversion price before an Event of Default were the lesser of 50% of market price or $0.10, then the new conversion price would be the lesser of 25% of market price or $0.05.
What this means is that if they are in default as of $ 9-30-2009 on interest payments the loan rate went up to 18% and the discount rate for stock purchases is 75% off of the retail price. This would seem to explain how they converted at $ .019 when the stock was selling between $ .06 and $ .10 back in October.
If correct it means they could now convert debt to stock at about $ .006 a share. This means a guranteed profit of 300% on any new conversions sold at market rates.
Yes I'd say Breitman is real good at finding "opportunities" to make money for his family.
AI
