Hey CJR,

Glor explained this very well. I'm sure some of you are surprised that this is legal. You need to keep in mind though, the difference between the types of Private Placements that exist. This deal is a CLOSED PP which is very different from the ones that many here have been party to. The PP's we participated in are OPEN to anyone who meets the minimum criteria. They do NOT give the investor any inside information at all! You put your money in somewhat blind and based on your DD. That is why they are typically sold at a discount of approximately 20% to the prior 30 day average sp.

The unfortunate result is that the price typically retreats to the PP amount as the participants sell their portfolio stock to buy into the PP. They are then barred from trading this new stock for 4 months from the closing date. In exchange for this risk there is typically a half or full warrant offered as compensation for the risk factor.

In the case of this placement, it is a Closed Placement. It isn't open to multiple participants and is kind of like a bank loan from one organization. The exception is that there is no interest, no term and no Guarantee. However, like a bank loan, the lender gets to see the books and all material information in order to make their decision to "lend". They sign confidentiality agreements and are barred from trading in the stock during....... and for a specified term after the "loan" is made.

What makes this particular placement so interesting, and thereby so significant for me as an investor, is not what is being disclosed, BUT, what is not being said!

Think for a moment! what would have had to happen behind the scenes in order for this placement to be structured like this. Put yourself into the position of the negotiator's to the deal. If I'm the "lender":

why in the world would I pay over market?

why would I not demand at least a half warrant?

why would I take such a large position relative to the capitalization?

You wouldn't get me to do a deal like this!.............unless........there were several......"lenders"......at the table! ......Several parties who all signed confidentiality agreements!.......Several parties who saw the "inside" details!.......Several parties who all wanted to do this deal!

That,....imo.....is what isn't in the NR and that is what is so significant to me! To get a deal like this meant our management had some serious leverage.

In my business I borrow large sums of money. I also lend significant sums including the money I've borrowed. (It's called a positive carry) They require difficult negotiations. I always know I'm getting to the Brass Tacks, when the deal I've negotiated to borrow is something I would NOT do as a lender.

This deal!...........you wouldn't get a nickel out of me!........and that is what isn't in the news release!

Good deal Frank C, and in the spirit of Glor's comments, I apologize for being so pissed a few weeks ago..........You did a good deal for us and I hope our lender makes a stupid amount of money on this deal..........Carry