Thursday, July 29, 2004

The Lead Life Preserver

Thinking back on the financing trail, it’s hard to believe now that we missed all the danger signs that the life preserver thrown at us was made out of lead. Maybe depleted uranium for that matter.

But when you are desperate, you WANT to believe the best despite the queasy gut feelings and the unmistakable signs along the way. After all, the DotCom meltdown had burned all the way to China and we really didn’t have any decent cards to play.

So we went ahead despite the fact that no one on the board really liked the idea of a reverse merger. We thought that by hiring the squeakiest of the cleanest auditors and attorneys, we could protect ourselves. So we plunged ahead with the reverse merger with Secure Sign and got about $412,000 out of the $450,000 promised to us by Transfund: Len Hartkemeier, Harvey Bornstein and Transfund’s main investor Bob Gold. The other $38,000 went to various finder’s fees to Len, Harvey and (I believe but will check my notes for a future post) others.

The terms of the bridge loan were that it should last for 120 days. As we would later find there would be some icky stuff to clean up (like an SEC enforcement action for some less-than-honest news releases). And I would have to make the “120-day” bridge loan stretch over nine months instead.

And despite all out efforts to convince Len, Harvey and Transfund to find another shell, they did not do so despite the fact that there were plenty of squeaky clean ones available for a song.

I keep asking myself: Why Secure Sign? Why was this the only shell Transfund would go for?

More details and some thoughts on that next post.

And take a look at the tribute site for Pocketpass.


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