"It’s a bridge and a properly structured convertible note that is providing short-term flexibility while they continue eliminating toxic debt and stabilizing operations. Read the filings and I am sure you will get it. But sure, keep yelling ‘toxic’ at every move instead of looking at the bigger picture."
"Properly structured"...hilarious. So yeah...let's read the filings and review shall we.
1) OID of 10% ($50K) 2) One time interest of 10% added on the effective date....unless there is a default...then there is more. 3) 30% discount to market of the lowest closing price of the previous 10 trading days. 4) the conversion price is FLOORLESS (This is the primary characteristic that makes if TOXIC all by itself.) 5) Pre-payment penalty of 15%.
That note is TOXIC by any definition.
Its appearance suggests to me that Foote may be defaulting on the $2 million payment on Monday....otherwise why would they need the note just two weeks before the payment deadline??? We shall see...
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