Correct. This is an initial financing round. You can't expect the same kind of a deal that a more seasoned company would get. This financing serves the purpose of getting the company off the ground without immediate dilution. If the company is profitable it has the option of retiring the debt early and subsequent financings can be arranged at more favorable terms. If we look at the amount of money that will be needed to fund all the projects in the PSPW pipeline 50 million is really small potatoes. I would expect that Durant would have analyzed all other alternatives before settling on this choice. I have a venture capital background and see these kind of structures all the time. They are popular because the parties don't have to quibble over the "valuation" of the borrower's stock.
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