The transaction with Mister Tube Steak Canada, Inc. ("MTS") is a related party transaction. James Oste, the President, CEO and Director of PFCS, is also the President and a Director of MTS. Robert Kinloch, the COO and a Director of PFCS, is head of investor relations of MTS.
From the Form 10SB12G/A:
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On January 10, 1999, the Company entered into an agreement with Mister Tube Steak Canada Inc. ("MTS") wherein the Company was appointed MTS's exclusive distributor in California and Washington. See "ITEM 1, BUSINESS." Mr. Oste is President and a Director of MTS and Mr. Kinloch is head of investor relations for MTS. As a result of Messrs. Oste and Kinloch's positions with the Company and MTS, a potential conflict ofinterest exists with respect to matters relating to the operation ofthe Company. Messrs. Oste and Kinloch have agreed, so long as they are officers and directors of the Company and affiliated with MTS, that all opportunities presented to them will be made available to MTS and the Company on an equal basis, but subject to the terms and conditions of the agreement between the Company and MTS. For example, orders for the purchase of the Mobile Vending Carts and Products emanating from California and Washington will belong to the Company. Orders for products emanating from outside California and Washington will belong to MTS since those jurisdictions are not covered by the Agreement. In the event that some business opportunity is presented to the Company which does not fall within the foregoing parameters, the business opportunity will be offered to the Company and MTS on an equal basis. At the present time the Company cannot comprehend an opportunity which would cause the Company to offer the same to MTS on an equal basis, however, in the event such opportunity does appear, the same will be so offered.
Further, Mr. Oste has agreed to abstain from voting, as an officer and director of the Company and MTS, on matters which result in a conflict of interest with respect to both corporations. Mr. Kinloch, on the other hand, is not an officer or director of MTS and accordingly will not be voting or involved with the policy decisions of MTS. Mr. Kinloch, however, has agreed not to vote, as an officer or director of the Company on matters which result in a conflict of interest between the Company and MTS. Accordingly, where a conflict of interest exists between the Company and MTS, the same will be decided by the Company's remaining officer and director, Mr. David Glass. |
