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Convertible Debenture Example

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An Example Convertible  Debt Deal

         Market share price on date of close $2.10

         $2 million in the form of a two-year fixed price Convertible Secured Note, which is convertible into common shares at $2.33 a share

         Represents a premium to market of approximately 10%

         The note carries interest of 1.75 percent above prime with a floor of six percent per annum

         The Company can elect to pre-pay the note in cash

         The investor was granted a warrant to purchase 125,000 shares common stock for a period of five years from the date of the transaction.

         The per share exercise price of the warrant is $2.68 for 75,000 shares subject to the warrant, $2.91 for 35,000 shares, and $3.38 for 15,000 shares.

         Market share Price 60 days post closing $2.30


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