Vinekeeper,It is unfortunate that in the terms of the conversion...

Vinekeeper,

It is unfortunate that in the terms of the conversion of the notes that this is what we have ended up with. This is as approved not by any design of ASOF, a point which seems to escape most here. It has occurred due to the application of the lower conversion rate, co-incidentally the same rate which applied to the original Harmony notes. If ASOF had not bought the high yield notes, it would have been harmony “diluting the crap out of us” As for allowing us on board, you must also remember that we were told many times before that there would be nothing in it for the Shareholders if ASOF got up. Not putting too fine a point on it we are on board for no other reason than ASOF needs the spread for the relisting.

I fully agree and been alluding to the fact that the Company should have been put into liquidation well before it was. The critical time point, in my opinion, was the Harmony note issue, where even at that time the Company had to admit that part of the Harmony loan funds were to pay it’s interest! It also used part of the subsequent increases in the Harmony facility for the same purposes. It also admiited that it did not have the cash flow or the resources to repay the loan.

As regards the fact that the directors may have believed that the Luxinvest cheque was in the mail to allow the Company to reach that point where they made that payment, of which of course ASOF is being blamed for, was in my opinion grossly negligent. Given the tone of their announcements to the SEC, after the harmony deal and before GEM, Dutchess, Assured fast one and Luxinvest, it was obvious that the Directors were well aware of the financial position of the Company. Perhaps naivety could be applied but either way the problems still lie with the judgement of directors.

As regards the Shareholders, some are now hiding behind the “how did this happen and why were we not told” argument. Shareholders are duty bound to rely on their own investigation, and not just use the “Directors sad it would be alright” argument. That is why I stressed that even when told it is a bad deal it still got through. It is also interesting to note that the same advisors only said it was good deal for the Company because it stopped it from going into administration!!!!

You are correct perhaps as MST should have been working on a “hindsightometer” so that we would not be having these conversations.