Each one in plain English, with the numbers worked through for a shareholder.
6 Oct 2009capital raising announcement▼ BadMajor
The company gave more detail on the Bridgepointe lawsuit, which alleges missed 2009 monthly redemption payments and failure to reserve enough shares for conversions. The company says its authorized share limit was reached in February 2009 and that SEC reviews delayed a proxy until a September 23, 2009 meeting, where authorized shares were increased. On September 30, 2009 it paid $1,644,692.77 of principal and $144,437.37 of interest on the senior secured debentures using 14,909,417,833 shares of common stock, leaving $215,962.64 owed to Bridgepointe. It also converted all its remaining debt into shares that day. The response to the complaint is due October 12, 2009. The share issuance of nearly 15 billion shares is vastly larger than the roughly 29.9 million outstanding in mid-2008, so existing holders are heavily diluted (inference from the filing's figures). This addresses the share-authorization thread, though the lawsuit remains open.
On November 19, 2008 the company closed a fourth round of unsecured 8% convertible debentures, described as $777,0000 face value (a typo in the filing) with $605,000 proceeds after a 20% discount, due September 30, 2010. They convert at the lower of $0.25 or 80% of the average of the three lowest closing bids over the prior 20 trading days, and buyers received 'J' warrants for 3,108,824 shares at $0.25. This continues the pattern of repeated discounted convertible financings and could dilute shareholders further. No placement agent fee is stated.
10 June 2008capital raising announcement▼ BadMajor
On June 9, 2008 the company closed a third round of 8% convertible debentures: $2,000,000 face value, $770,000 proceeds after a 20% discount, due April 30, 2010. They are unsecured and convert at the lower of $0.25 or 80% of the average of the three lowest closing bids over the prior 20 trading days, so more shares are issued if the price falls. Buyers also got 'I' warrants for 3,351,471 shares at $0.25, and Empire Financial Holdings got $44,450 plus warrants for 254,000 shares. To close, holders of 100% of the September and November 2007 debentures agreed to cut their conversion price to the same $0.25-or-80% formula and their warrant price to $0.25, and dropped the 'milestone' provisions; this is a repricing well below the earlier $0.80 terms. There were 29,897,678 shares outstanding as of May 29, 2008.
