Agoracom: Small Cap Investment - Mosaic ImmunoEngineering Inc. - Re: LL - Re: Why the 5% additional dilution since the 10K filing?!

Mosaic ImmunoEngineering is a nanotechnology-based immunotherapy company developing therapeutics and vaccines to positively impact the lives of patients and their families.

Reply New Message

Prev Message Back To Forum Threaded View Next Message

forestgump

Rank: Treasurer [?]

Points: 1004 [?]

Votes: 39 Score: 2.7 [?]

Your Vote:

Please Log In to Vote

Did you know? You can earn activity points by filling your profile with information about yourself (what city you live in, your favorite team, blogs etc.)

Re: LL - Re: Why the 5% additional dilution since the 10K filing?!

in response to

Re: LL - Re: Why the 5% additional dilution since the 10K filing?!

optymystic

posted on Sep 15, 2008 11:10AM

4. Notes Receivable

During fiscal year 2008, SSDI sold a membership interest in its subsidiary DataSecurus, LLC (now known as Talis) to an unrelated third party for $100,000 in cash and a $50,000 non-interest bearing note receivable due in June 2008. On June 1, 2008, SSDI assigned the $50,000 note receivable to us and we agreed to reduce the amount of our line of credit with SSDI by the amount of the note receivable. On June 26, 2008, we were paid in full by the third party debtor.

On May 30, 2008, we purchased a secured convertible promissory note from Crossflo Systems, Inc., a California corporation (“Crossflo”) with a face amount of $400,000. Interest accrues on the note at a rate of 5.25% per annum and will be due with principal at the earlier of (i) September 30, 2008, (ii) consummation of a equity financing by Crossflo which closes on or before September 30, 2008, in which Crossflo sells and issues shares of its convertible preferred stock resulting in aggregate gross proceeds to Crossflo of at least $2.5 million (a “Qualified Financing”), or (iii) upon or after the occurrence of an event of default, as defined. The note is secured by substantially all assets of Crossflo.

The Crossflo note receivable is convertible at our option, at any time prior to September 30, 2008, into shares of Crossflo’s Series F convertible preferred stock equal to 4% of Crossflo’s then issued and outstanding equity securities. In addition, the entire principal is automatically convertible into shares of Crossflo’s Series F convertible preferred stock at the closing of a Qualified Financing. The number of shares of Series F convertible preferred stock to be issued upon automatic conversion of the principal amount is the greater of (i) 4% of Crossflo’s then issued and outstanding equity securities, and (ii) the principal amount divided by the per share purchase price paid by the investors participating in the Qualified Financing. Upon an event of default, as defined, the principal amount of the note may be converted into shares of Crossflo’s Series F convertible preferred stock equal to 4% of Crossflo’s then issued and outstanding equity securities. Upon maturity on September 30, 2008, the principal amount of the note will automatically be converted into shares of Crossflo’s Series F convertible preferred stock equal to 4% of Crossflo’s then issued and outstanding equity securities.

Upon conversion of the principal amount of the note pursuant to the above, we are entitled to receive shares of Crossflo’s common stock equal to all accrued and unpaid interest divided by $0.20.