During the period March 1, 2007 through April 20, 2007, Phoenix Digital entered into license agreements with third parties, with proceeds totaling $22,140,000.

On March 5, 2007, the Company received proceeds of $100,000 from an investor who exercised warrants to purchase 1,000,000 shares of common stock.

On March 20, 2007, an investor exercised warrants of 10,702,243 to purchase 10,424,578 shares of common stock on a cashless basis.

In a press release dated February 22, 2007, the Company announced dividends of $0.02 per share to shareholders and qualified warrant holders of record as of March 6, 2007. The dividend of $8,114,774 was paid on April 9, 2007. In the same press release, the Company announced the Board of Directors semi-annual dividend policy contingent upon the financial condition of the Company, other possible applications of available resources, and relevant business considerations.

On March 27, 2007, the Company entered into an 18 month revolving line of credit with SSDI for a maximum amount of $500,000. If the Company does not provide notice to SSDI at least 90 days prior to the maturity date, the maturity date automatically extends 12 months. The line of credit is collateralized by all assets presently owned or hereafter acquired by SSDI. On March 28, 2007, the Company advanced $150,000 under terms of the agreement, and on April 16, 2007 the Company advanced $100,000 under terms of the agreement.

 

 

The line carries a floating interest rate which is defined as the prime rate as announced by Bank of America. At March 31, 2007, the interest rate on the note was 8.25%. The borrower is required to make minimum monthly payments on the line consisting of unpaid and accrued interest on the first day of the month following the initial advance.