Can someone help me understand the financing?
I read this in the 10Q: "In August 2004, Advantage sold a total of $400,000 worth of such convertible note to Cornell Capital Partners, LLP ("Cornell"). The Note bears interest at a rate of 6.5% per annum and is convertible into shares of the Company's common stock with a conversion price per share equal to the lesser of the average of the lowest of three day trading prices during the five trading days immediately prior to the conversion date multiplied by .70 or, the average of the lowest of three day trading prices during the five trading dates immediately prior to the funding dates."
The conversion terms of this note make it look to me like one of the notorious 'floorless convertibles.' Or am I missing something?
Also, would it be correct to assume (as was posted on RB by mr-blister) that Highgate sold short all of the shares they're entitled to under the convertible debenture issued May 12, 2005? "[T]he Company completed a financing agreement for $1,000,000 with Highgate House Funds, Ltd. (the "Investor"). Under the agreement the Company issued a $1,000,000 secured convertible debenture with a 10% interest rate to the Investor with a maturity date of November 3, 2006. The debenture is convertible after maturity into common shares of the Company at a conversion price of $0.01 per share. The Company simultaneously issued to the Investor a three year Warrant to purchase 250,000 Shares of the Company's common stock at an exercise price of $0.001."
