Can you tell me what this means? The due dates on these loans are not that far into the future. Also, the interest rate seems high. This is my first time investing in a speculative stock - the intellectual rights is the only thing PDOS has going for it - it's bread and butter. Maybe it's because I'm a newbie but I would like to understand the stockholder benefit here.
Item 1.01 Entry into a Material Definitive Agreement.
On December 20, 2010, Platinum Studios, Inc. (the "Company") entered into a series of agreements with its CEO, Chairman and major note holder, Scott M. Rosenberg ("Rosenberg"), to extend the due dates of certain existing loans made by Rosenberg to the Company. Pursuant to the terms of the agreements, the new due date for certain loans totaling $2,400,000 will be May 6, 2011 and the new due date for other loans totaling $1,350,000 will be June 3, 2011. The interest rate on all of these loans has been increased from 8% to 10%, effective upon the original due dates of May 6, 2010, and June 3, 2010, respectively. The Agreement, with the attendant schedules and exhibits, is attached hereto as 10.19.
In exchange for these due date extensions, the Company granted to Rosenberg:
(1) two additional sets of warrants to purchase the Company's common stock. The first set allowing for the exercise of up to 40,000,000 warrants to purchase shares of the Company's common stock, at an exercise price of $0.11 per share, and the second set allowing for the acquisition of up to $3,750,000 in stock, by exercise of warrants at $0.11 per share. Both sets will expire on October 22, 2020; and
(2) a co-ownership interest in certain intellectual property owned by the Company as detailed in the Intellectual Property Rights Agreement attached as Exhibit 10.20 to the Company's Form 8-K, filed with the United States Securities and Exchange Commission on December 28, 2010.
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