Comment Re:Slightly offtopic... (Score 3, Informative) 199
It's in finance-ese. I'll do as best as I can. A bit of background: Infinium is a very thinly traded company on the over-the-counter market. As of early January, shares were worth around $1/share. Currently they are worth about $5/share. They raised $15MM in late Jan, by selling 2,000,000 shares at $7.50/share.
As of January 2004, Infinium needed to come up with some cash, probably to pay their legal bills.
They found someone to borrow money from, and issued a promissory ("I promise to give you money") note. Those lenders are unnamed, but may be original investors, VC types, executives, a bank, or the lawyers themselves. The loan pays no interest.
There are 2 triggering events for the note to be paid. If they win their litigation, and the recieve more that $150K, the note must be paid. If they are enter a merger agreement within 8 months, the note must be paid. The merger does not have to be completed. I'm not sure if the note has to be paid if neither of these events occur, there's not enough information to determine that.
The note can be paid in two ways (cash or stock), and we don't know who gets to pick. The outcome for cash is obvious (Infinium gives lender $100K). Under the "stock outcome" the lender will probably get shares of Infinium at or close to the January Share price (~100K shares at $1/share). Those can then be sold on the open market.
Speculation:
The note was issued by the lawyers, partially in exchange for services rendered.
The holder of the note "gets to pick: stock or cash."
Infinium Labs was awfully short of cash. Like, probably stretching to make payroll. Without that 2nd round of financing, they were probably going to have to close their doors.
At $5/share, with 20+M shares out, this company is worth $100M. To me that seems like a heck of alot for a company with no product, brutal cash flow, and higher expenses on litigation than practically anything else.
Hope this helped.
As of January 2004, Infinium needed to come up with some cash, probably to pay their legal bills.
They found someone to borrow money from, and issued a promissory ("I promise to give you money") note. Those lenders are unnamed, but may be original investors, VC types, executives, a bank, or the lawyers themselves. The loan pays no interest.
There are 2 triggering events for the note to be paid. If they win their litigation, and the recieve more that $150K, the note must be paid. If they are enter a merger agreement within 8 months, the note must be paid. The merger does not have to be completed. I'm not sure if the note has to be paid if neither of these events occur, there's not enough information to determine that.
The note can be paid in two ways (cash or stock), and we don't know who gets to pick. The outcome for cash is obvious (Infinium gives lender $100K). Under the "stock outcome" the lender will probably get shares of Infinium at or close to the January Share price (~100K shares at $1/share). Those can then be sold on the open market.
Speculation:
The note was issued by the lawyers, partially in exchange for services rendered.
The holder of the note "gets to pick: stock or cash."
Infinium Labs was awfully short of cash. Like, probably stretching to make payroll. Without that 2nd round of financing, they were probably going to have to close their doors.
At $5/share, with 20+M shares out, this company is worth $100M. To me that seems like a heck of alot for a company with no product, brutal cash flow, and higher expenses on litigation than practically anything else.
Hope this helped.
