SS9173 - We have been talking about this for 3 months. Posters already know, or they should know from all the discussions, that NEOM can't get the SEDA money because the pps is too low.
NEOM has not been able to count on this money since the pps dropped below .35. It is clearly understood that with the pps so low, there was no need to register the shares.
Problem here is, where is the money coming from to pay the subs, since there is no way NEOM can raise the money from the SEDA (allowing Cornell to sell shares again related to the 100 Mil SEDA).
NEOM has already paid Cornell 75, Mil shares as a fee to allow Cornell to sell shares so NEOM could collect funds from selling shares (100 Mil SEDA), which NEOM can not at this time expect to receive, because the pps is too low.
There is no way NEOM can touch the 100 Mil SEDA until the pps is above .35, and the shares are re-registered.
All of this has been reviewed and discussed many times here on this board.
So, in response to Breacher's question, the 25 Mil will not be paid to the subs from the sale of additional shares by Cornell (100 Mil SEDA - additional selling shares by Cornell, of which NEOM has already paid Cornell the 75 Mil. shares as a fee), because the pps is too low for Cornell to sell shares for NEOM to collect any part of the 100 Mil SEDA.
In the revocation of the registration a couple of weeks ago, NEOM management indicated that the 75 Mil shares fee, already paid to Cornell, could be applied to another restructered arrangement with Cornell (I am reasonably certain there will be some additional restructuring fee with Cornell, as nothing is restructured with Cornell, without some additional fee).
Ok, that still leaves NEOM, with dwindling capital to pay the subs the 25 Mil. and to operate on for the balance of the year.
Cornell had agreed to another $5 Mil purchase of Preferred stock, to be exercised by 2/09. That is still far short of the $25 Mil. owed to the subs, when the sub's stock become saleable.
Another restructured deal may be in the making by NEOM with Cornell to sell at a lower pps. Or Cornell could loan part of the money to NEOM and the subs may take the balance in stock. Who knows. However, you will not see Cornell selling shares in order for NEOM to claim any part ot the 100 Mil. SEDA, until the pps is over .35 per share.
The big problem with in subsidiary deal making, was not including a clause, that they would be paid the additional "if, and only if each of the subs had reported a specific percentage of profit, since the date of purchase.
No incentive was ever placed on the subsidiaries to even make a net profit, to claim the 25 Mil difference, if the pps declined lower than the pps stated in the contracts.
Some incentive was stated to give them additional shares if they made a specific for two years.
If the pps was high enough for Cornell to sell shares enabling NEOM to secure any part of the 100 Mil SEDA, "we would not owe the subs any additional money, because the pps would be .45, which is higher than the .38 pps stated in the contracts with the subs.
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