Tiger Telematics combined 2 short-term loans made to its Gizmondo...
Tiger Telematics combined 2 short-term loans made to its Gizmondo Europe division by shareholders into one note of Pounds 12.68 million due June 30, after an extension agreement was reached, the company said in an SEC filing. One loan…
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had been due Oct. 31 and the other Nov. 30 last year. The company said it pledged as collateral the patents and intellectual property rights of its Smart Adds product and the stock of its Smart Adds subsidiary. Tiger hasn’t announced how many Gizmondos have been sold in the U.S. since they became available late last year after delays. The company also said in the SEC filing that it “has been in preliminary negotiations for a major equity refinancing” but warned “no assurances can be given that it will be able to complete” it. The refinancing would include $50 million from Geneva and London hedge fund groups and an additional vendor credit debt line of about $25 million, it said. Tiger also revealed that its Gizmondo Europe subsidiary “has experienced severe financial pressures from various vendors as its cash flow has been unable to service the requirements.” It said “this has in part been aggravated by a lack of investor funding.” Tiger said it had also “been actively negotiating for further funds from debt and equity sources to assist the cash flow needs of Gizmondo Europe but there can be no assurances that this will be achieved.” Therefore, Tiger said, it “may be required to seek other alternatives for the Gizmondo Europe operations.” Although Tiger negotiated a $5 million bridge loan from an investment firm, the company said it “has not been able to draw down under the facility as of yet nor can any assurances be given that it will be able to draw down on the facility although it is working to achieve this on a daily basis.” Tiger said it completed sales of about 750,000 shares of its common stock Q4 2005 for about $2.2 million total. Other recent setbacks for the company have included the resignation of Carl Freer as chmn., announced 2 days before Gizmondo launched in the U.S. (CED Oct 21 p11). A Tiger spokesman a week later said the company accepted the resignations of Stefan Eriksson and Peter Uf “when it came to light that these individuals had not disclosed to the company criminal convictions in Sweden in the mid 1990s” (CED Oct 28 p9).