Some of you will note the "restricted cash" entry of $7M+ on the balance sheet. The details follow, with notable elements highlighted.
NOTE 6: TERMS AND CONDITIONS OF THE ACCOUNT MANAGEMENT AGREEMENT
We entered into an agreement dated June 26, 2009 (the “Account Management Agreement”) with Copperbottom Investments, Ltd., Absentia Holdings, Ltd., Orange Investments, Ltd., Agri-Technologies International, Ltd. and Britannia Securities International, Ltd. as the investors (the “Investors”) and Elco Securities, Ltd. as the manager of the transaction (the “Intermediary”), which may provide us with up to $7,955,795 (the “Funds”), which is set forth on our balance sheet as of June 30, 2010 as “cash, restricted”. The following are the terms and conditions of the Account Management Agreement:
1.
The Funds are being held in an account in the name of Metiscan, Inc. which is controlled by the Intermediary. Before any of the Funds are released to us, 525,085,751 shares of our common stock issuable upon the exercise of an aggregate of 14 warrants being held by the Intermediary on behalf of the Investors pursuant to the Account Management Agreement must be free trading.
2.
There are 24 milestones, or “Breakouts”. The first Breakout requires that the average bid price of our common stock shall be $0.0120 per share, and that the average daily volume shall be 10,653,587 shares. The average bid price requirement for each Breakout increases, so that the 24th Breakout requires that the average bid price be $0.0311 per share, and that the average daily volume be 2,752,527 shares. Upon reaching each breakout, we shall receive a sum of cash ranging from $110,752 to $405,085. The Intermediary shall track the average closing bid price of our common stock (the "Bid") and average daily volume of trading of our common stock (the "Volume") for each trading day within a specified 30 calendar day period.
3.
Certain fees and expenses shall be deducted from the Breakout payments before being delivered to us.
In addition to the foregoing conditions, upon the release of the Funds to us there are numerous conditions upon our operations and upon our use of the Funds after we receive the Funds, unless we receive approval from the Investors to forgo any, or all, of the following conditions:
1.
We are not permitted to consolidate our common shares without the agreement of the Investors until after the earlier of (i) June 26, 2013 or (ii) after the exercise of certain warrants.
( that means NO R/S without investors consent )
2.
We must make available to the public adequate current information about us within the meaning of Rule 144(c), which was promulgated by the Securities and Exchange Commission pursuant to §4(1) of the Securities Act of 1933, as amended.
3.
We must be publicly traded on an exchange suitable to the Investors.
4.
We are restricted from consolidating our common stock, and restricted from selling, merging or spinning-off more than 5% of our underlying assets for a period of one year following the “completion of capital placement” by the Investors.
5.
We may not utilize any funds we receive for any of the following:
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A.
Leasing vehicles for management,
B.
Legal or general and administrative expenses not related to filing all required reports pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,, such as registration, SEC compliance and listing requirement,
C.
Repayment of management or shareholder loans except as to be approved by the Investors,
D.
Past due salaries,
E.
Settlement of legal liabilities or
F.
Severance packages.
