A few thoughts about the Right's Issue.Firstly, the Lind/ASOF...

A few thoughts about the Right's Issue.

Firstly, the Lind/ASOF investment is not an equity line of credit, such as Springtree specialise in. It is a direct investment and purchase of existing notes with significant debt forgiveness as a bonus.

Secondly, I believe the debt forgiveness is what it is - an honest approach by the company to provide shareholders who contribute to the CR with additional incentive to do so, and not a precursor to takeover by stealth. Because the notes on which debt is forgiven can't ever be sold or converted, we benefit by a significant reduction of contingent liability over future revenues in terms of not having to pay those notes out. As the company says, double bang for out buck.

Yes, the remaining convertible notes can be converted to stock - that's what they are. But my understanding is that if ASOF were to try to convert to hold more than 19.99% of voting stock, they would require shareholder approval to do so.

So, I don't believe Lee and Terry are selling shareholders out. On the contrary, I believe they are doing their level best in extremely trying and challenging circumstances to help the company first survive, then prosper. Witness how many potential company-making deals we have in the pipeline, plus what can now only be described as significant global interest in our technology, specifically MAUL.

In this respect I think it's also important to view the proposed LIND/ASOF deal in the context of the cash statements at the time the deal was negotiated, and the challenges the company faces.

We now have a new cornerstone investor who is prepared to extend the notes by 3 years and holds the noteholder voting block to do so - otherwise the company would have to find $19M by March 2012 to pay out the notes as recently extended, something they would probably not be able to do, with all the consequences that would flow from such a failure.

Also an investor who is not only willing to put additional cash into the company, but who is also willing to forgive up to $3.6M of note debt on a dollar-for-dollar basis depending on shareholder response to the Rights Issue.

In summary, like CJ, I will subscribe for my full entitlement, and possibly more depending on whether we get any further news in the next fortnight. In my mind there is no alternative. This might not be the best deal the company could make, but it is the best in the circumstances.