I'll reply with a post I made elsewhere:
The good news is that TI is forgiving debt, and willing to turn in 50% ownership of the company. I'm not really understanding that because what they get in return is still not real clear, but as I understand it they will have the right to receive shares only upon attainment of a market cap of $25 million/$40 million. Actually seems remarkable that they are willing to do this. This suggests expectations of a much higher market cap at some point down the road.
However, it appears to me that the March, 2007 convertible of $3 million is going to be adjusted downward in price to the level of this new funding---a price of .005. Not good at all, as this is potentially 600 million shares--ie massive dilution. The interest on this new convertible is to be paid either in cash or as a FLOORLESS convertible at 85% to market--not good either. The interest on the existing is also floorless. Up in the air still is the bigger financing they need to run their business--$5 million stated in recent 10Q. This is still not reported--and who knows the terms????
The 170K in this financing won't go far and at .005 will generate 34 million shares. THe bigger issue for me is the adjustment downward on the conversion price of the prior convertible, and the still--unreported financing they need for business.
tedm
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