Ann: Proposed issue of securities - CLZ, page-6

bill...I doubt my own calculations all the time, punch them in three different ways, that's why my result might be presented in a confusingway
.
They were owed $25,000 and accepted 1,250,000 shares as payment this morning.
If they sold the shares immediately this morning at 1.6c they would have got $20,000. that's a loss of $5,000, so they're only getting 80c in the dollar for their invoice.
So the question is why would they accept $20,000 for a $25,000 debt? You could go back through the list of creditors to find out exactly who was owed 25k, but that doesn't tell you why. In hindsight "remorse" is probably wrong. If I was that creditor, and the company couldn't pay me what it owed I would take the $20,000.

There is another problem with the transaction though. If every single creditor was offered the same deal at the same time then every one would be cashing out at the same time, the share price would crash and no creditor would get anywhere near 80c in the dollar. So is that favouritism to one small creditor?