gophilipgo - The loan side of this is not my forte from an accounting perspective. But in discussions with others, there was the issue in the prior, failed, PORv7 (not this one) of a high degree of "loanage" :) It's reduced now, but still is there.
The problem - or worry - is that as the loan is executed (draws upon it) it becomes debt -- and debt, as we know, trumps equity.
And there are nefarious tricks that could be (am not suggesting they WILL be) played to further cripple NewCo to cause what is called "death spiral" financing.
Now, I know that this issue has been brought to the ECs attention, and I know that things are much better this go-around.
But the loans just bother me, if they are tied to the SNHs who are not, in my opinion, out for the "warm fellowship good" of equity.
The really "out there" (to a degree) worry is that we go 'dark' for some period of time in trading and in reporting, and simultaneously be burdened with the 'debt' -- approved by an unknown new Board of Directors, and we can't service that debt through revenue or merger -- and become, once again, cash-flow impaired, and start the whole bankruptcy process all over again -- and this time, the creditors are those who provided the loans.
Ergo, "death spiral" financing. Again, I think the new proposed constitution of the Board of Directors, and the visibility of this issue goes a long way to preventing it -- but it's something to remember and consider.
...Catz
.... Please, just call me Catz ;) - - - - - {and the requisite, all IMHO, do your own due diligence, and make your own investments}
AI
