Replies to post #12782 on Deltron Inc (DTRO)

[TJG]

There are several convertibles that contribute to the derivative expense, not just the $3.15 mill. A couple of years ago I got a full understanding of how it all works.

Here is a post from a person here at IHUB who is very informed on how it all works. Look this up and there are a few posts that explain it in detail. The expense is a number that changes with the stocks price. Thats because the higher the PPS goes up from the price set at the sale of the CD the more money the lender makes when they convert. Is an expense that must be paid, but its also a PAPER expense..by that I mean its not actual money they have had to pay out...its what they would have to pay out if they were to settle the entire debt at once, based on what the PPS is the day they pay it off.

In this explanation just substitute DTRO for CoroWare...in a nut shell, they need to simply do as I said, get Blu Vu to begin to generate revenue so they can assist in paying down the CD burden they have created.

eztradin
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Wednesday, July 28, 2010 3:37:08 PM
Re: aries4747 post# 5433
Post # of 5463
The derivative expense is associated with CoroWare's convertible debentures. The derivative liability increases with the increase in CoroWare's stock price, because the underlying embedded conversion feature is indexed to CoroWare's stock. As the derivative liability increases, the derivative expense increases. The interest expense is primarily associated with the amortization of the discount also associated with our convertible debentures.