Actually, they are debt-free as the convertible debt was "paid" for in common shares. They have some operating payables, and some other equity liabilities (warrants payable, but that is really it. It's extremely rare a lifeline isn't thrown to a small developmental stage company without an equity kicker attached. However, interestingly, and this has been posted before - the convertible preferred's that were converted had no expiration date. And, as most know, preferred stock is called preferred because it has preferred rights for many reasons, including rights better than common shareholders. Regardless, Mahamedi and Chitayat exercised the convertible features and became common shareholders.
Anyone know if Mahamedi and Chitayat still have a large amount of preferred stock in hand even after the conversion?
On second check from the Q1, 10Q, it looks like they converted all the preferred's in their positions, as the balance sheet shows -0- issued and o/s of preferred's at 3/31/13:
Convertible, redeemable Series A Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 and 506,936 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively
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