Message: Servicing debt...this is why the pps is static at .10
Servicing debt while revenues find their way to the bottom line.
They are choosing to eliminate debt by issuing shares as long as we stay above .10.
This is not a bad thing as they are electing to save the revenues derived from IP efforts for growing the business while debt is being reduced via dilution. I can live with more dilution under these circumstances because the end product is a debt free company who is now banking revenues...which adds value, while the dilution is not that significant at this point.
It's not so good when there is no plan for revenue generation.
They now have a plan that being implemented..
In April 2008 the Company issued 40,000 shares of common stock as payment of a $4,800 finance fee on the $40,000 12% promissory note. In June 2008 the Company incurred a $4,000 finance fee on a six-month renewal of the $400,000 18% Secured Promissory Note after a $50,000 principal reduction. This finance fee was paid by issuing 40,404 shares of common stock. Note financing fees paid to creditors are recorded as a debt discount and amortized over the term of each note using the interest method.
The Company has the option, subject to certain limitations, to elect to make installment payments on the 7.5% Convertible Term Note either in cash or in shares of common stock (“Monthly Installment Shares”). Monthly Installment Shares are valued at the arithmetic average of the closing prices for the last five trading days of the applicable month without discount. Payments must be paid in cash if the computed average price is less than $0.10 per share. During the six months ended September 30, 2008 the Company made four monthly installment payments aggregating $120,000 through the issuance of 1,036,308 shares of common stock and made two payments in cash of $60,000 (one payment for $30,000 made in October 2008).
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