Whoisyourpapa, as I understand it, the 26 February 2012 loan of $5M from IMC to Woulfe was at 5% interest, with the term ending on the earlier of the closing of the IMC $35M transaction or the one year anniversary of the loan (February 25, 2013). We don't know if the loan had a renewal clause. We do know that the agreement was for the principal amount with interest to be rolled into equity (as part of the $35M). We know that as of September 30, 2012, the total interest accrued was $148,719.00.
1. Any renewal clause in the loan agreement would first govern. None of us have seen that agreement.
2. If there was no renewal clause, the parties would likely agree to it becoming a demand loan with the same interest rate. If they were still negotiating the closing of the deal, the demand on the loan would never be made. If the deal closed, the loan with interest would then be rolled into the $35M equity. If the deal did not close, then IMC would exercise the demand on the loan.
In short, I see nothing too critical about the February 25th date. I wouldn't read too much into it. The bigger issue remains whether the bank financing deal can be completed before Woulfe becomes so cash strapped that they need to do another pp. Your guess is as good as mine in that regard. We would all be rich if we had a definitive answer to that question. All we can say with certainty is that the longer it takes to get that answer, the higher the risk for shareholders. We can also say that the longer it takes to get that answer, the higher the level of wild and unfounded speculation. Unfortunately, risk is much higher now than it was 2 months ago--this is the simple explanation for the significant drop in shareprice over the past two months. The s/p is simply building in that increased risk.