Any comments? I´ve already sold this POS long time ago, but I´m just curious about how to interpret this new filing. is this a joke or what?
For the past twelve months or so, NIVS has been experiencing severe difficulties in business operations as a result of the worldwide economic slowdown and is particularly troubled by the fact that the local banks have been pursuing loan practices that are detrimental to NIVS financial health. In order to ease the cash flow pressure the Company has been suffering and returning the Company back to its normal operational conditions, NIVS’ CEO/Chairman, Mr Li Tianfu has sought personally to enter into a loan agreement with Henglitong Limited Co (a company registered in China, known as Henglitong thereafter). The key points of the agreement are as follow:
(1) Henglitong provides 250m RMB loan to NIVS. This loan is to be used for NIVS’ bank loans re-structuring only;
(2) The annual interest rate of the loan is set to be 22.5%, with maximum term of 2 years;
(3) NIVS is the beneficiary to the loan and is responsible for the repayments, while Mr Li Tianfu is the legal borrower to the loan agreement, provides unlimited personal liability guarantee;
(4) Huizhou NIVS which is one of the subsidiaries to the NIVS Group, is offered as collateral to the loan and with Dongri - another subsidiary of NIVS group's, acts as guarantor;
(5) Mrs Li Xuemei, the sister to Li Tianfu, is also the legal representative of Henglitong, holds 1% of the total share of the company. Mrs Li Xuemei too, provides unlimited personal liability guarantee to this loan transaction.
This loan agreement is set to take effect on October, 20th 2012. It aims to provide a breathing space and create a condition for NIVS to try to fix its cash flow problems so that NIVS is able to move forward
It is quite a funny way to communicate. They could have said, we have run out of money investigating ourselves, so we took out a loan to pay the lawyers and accountants. Maybe one day we will get financials that show sales are done 90%.