Attached hereto as Exhibit B is a Cash Flow Forecast for the Company for the 13-week period commencing September 30, 2005, and ending December 30, 2005 (the "Initial Forecast"). At the initial Closing, the Company will provide to the Agent and the Lenders, as condition to closing, an updated forecast in the form of the Initial Forecast (the "Closing Forecast"). At the end of the first calendar two weeks following the initial Closing and for each calendar two-week period thereafter until payment in full of the Notes and all other liabilities and obligations of the Company to the Lenders and the Agent, the Company will provide to the Agent and the Lenders (a) an updated forecast in the form of the Closing Forecast for the ensuing 13-week period (the "Current Forecast") and (b) a statement of actual cash flow for the preceding two-week period using the format of the Current Forecast (the "Current Cash Flow Report"). If for any period of either (x) three consecutive two-week periods or (y) three two-week periods of any consecutive four two-week periods the actual cash flow shown on the applicable Current Cash Flow Reports is less than 90% of forecast cash flow for the applicable Current Forecasts, (a "Cash Flow Shortfall") then the Lenders, in their discretion, may (i) refuse to make further Loans to the Company and/or (ii) declare an Event of Default pursuant to Section 8 (e) of this Agreement."
I had trouble finding the "Cash Flow Forecast" for Oct.-Dec., 2005 (Exhibit B).
** Is the Cash Flow Forecast a secret to be shared only with the $5 million lenders?
** Did the company agree to the extension to December 1? If so, what decision did the lenders make--to "terminate their obligation to make further Loans hereunder and demand payment in full of the entire principal amount of all Notes then outstanding and all accrued and unpaid interest thereon and all other amounts then owed the Lenders on or before March 15, 2006, whereupon all such amounts shall become so due and payable," or not?
The company will no doubt inform its shareholders about these important matters since they "believe that this financing will provide us sufficient capital through the first quarter of 2006," although "no assurances can be given that we will successfully obtain liquidity sources necessary to fund our operations in the upcoming year."
I have an order in to sell short 2000 more shares at $3.59. Let's all help pj have about 14% of the November short interest!