Item 4. Recent Sales of Unregistered Securities.
During the past three years, the following transactions were effected
by the Company in reliance upon exemptions from registration under the
Securities Act of 1933 as amended (the "Act") as provided in Section 4(2)
thereof except as otherwise indicated below. Each certificate issued for
unregistered securities contained a legend stating that the securities have not
been registered under the Act and setting forth the restrictions on the
transferability and the sale of the securities. No underwriter participated in,
nor did the Company pay any commissions or fees to any underwriter in connection
with any of these transactions. None of the transactions involved a public
offering.
In November, 1998 the Board of Directors issued 120,000 shares of
common stock to Coventry Industries Corp. to complete the previous acquisition
of LPS from Coventry pursuant to an agreement dated May 28, 1999 between the
Company and Coventry. The Company believes that Coventry had knowledge and
experience in financial and business matters which allowed it to evaluate the
merits and risk of the receipt of these securities of the Company, and that it
was knowledgeable about the Company's operations and financial condition.
In November, 1998 the Company issued 7,500,000 shares of common stock
to Eric W. Deckinger in exchange for the assumption by Mr. Deckinger, a Director
and President of the Company of $750,000 of the Company's debt to third parties.
The Company believes that Mr. Deckinger had knowledge and experience in
financial and business matters which allowed him to evaluate the merits and risk
of the receipt of these securities of the Company, and that he was knowledgeable
about the Company's operations and financial condition. The terms and conditions
of this financing were determined by the parties through arms length
negotiations and the Company believes the terms are no less favorable to the
Company than terms attainable from unaffiliated third parties.
<PAGE>
In November, 1998 the Company issued 80,000 shares of common stock to
three persons who provided professional services to the Company. The Company
believes that each of these persons had knowledge and experience in financial
and business matters which allowed them to evaluate the merits and risk of the
receipt of these securities of the Company. All of these persons were providers
of professional services to the Company and in such capacity they were
knowledgeable about the Company's operations and financial condition.
In November, 1998, the Company issued 10,000,000 shares of common stock
to Atlas Marketing Association, Inc. for cash consideration of $950,000 pursuant
to an exemption under Rule 504 of Regulation D of the Act. Atlas was an
accredited investor. The Company believes that Atlas had knowledge and
experience in financial and business matters which allowed it to evaluate the
merits and risk of the purchase of these securities of the Company, and that it
was knowledgeable about the Company's operations and financial condition. The
terms and conditions of this financing were determined by the parties through
arms length negotiations and the Company believes the terms are no less
favorable to the Company than terms attainable from unaffiliated third parties.
In May, 1999, the Company issued 862,158 shares of nonvoting preferred
stock to MJ Shulman, Inc. in exchange for $862,158 of the Company's debt held by
and loaned by MJ Shulman, Inc.. The Company believes that MJ Shulman, Inc. had
knowledge and experience in financial and business matters which allowed it to
evaluate the merits and risk of the purchase of these securities of the Company.
The Company believes that MJ Shulman, Inc. was knowledgeable about the Company's
operations and financial condition. The terms and conditions of this financing
were determined by the parties through arms length negotiations and the Company
believes the terms are no less favorable to the Company than terms attainable
from unaffiliated third parties.
Item 5. Indemnification of Directors and Officers.
The following summary description of material provisions of the
Company's Articles of Incorporation and Bylaws is qualified in its entirety by
reference to the Articles of Incorporation ("Articles") and the Bylaws of the
Company, copies of which are included as exhibits to this Form 10-SB.
The Company's Articles of Incorporation, Article 10, provides that no
Director or Officer of the Company shall be personally liable to the corporation
of any of its stockholders for damages for breach of fiduciary duty as a
director or officer involving any act or omission of any such director or
officer provided, however, that the foregoing provision shall not eliminate or
limit the liability of a director of officer for acts or omission which involve
intentional misconduct, fraud or a knowing violation of law, or the payment of
dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any
repeal or modification of this Article of the Stockholders of the Company shall
be prospective only, and shall not adversely affect any limitation on the
personal liability of a director or officer of the Company for acts or omission
prior to such repeal or modification.
<PAGE>
The Company's Bylaws, Article IX, provides:
a.) Any person made a party to any action, suit or proceeding, by
reason of the fact that he, his testator or interstate
representative is or was a director, officer or employee of
the Company or any company in which he served as such at the
request of the Company shall be indemnified by the Company
against the reasonable expenses, including attorneys' fees,
actually and necessarily incurred by him in connection with
the defense of such action, suit or proceedings, or in
connection with any appeal therein, except in relation to
matters as to which it shall be adjudged in such action suit
or proceeding or in connection with any appeal therein that
such officer director or employee is liable for the gross
negligence of misconduct in the performance of his duties.
b.) The foregoing right of indemnification shall not be deemed
exclusive of any other rights to which any officer or director
or employee may be entitled apart from the provisions of the
section
c.) The amount of indemnity to which any officer or any director
may be entitled shall be fixed by the Board of Directors,
except that in any case in which there is no disinterested
majority of the Board available, the amount shall be fixed by
arbitration pursuant of the then existing rules of the
American Arbitration Association.
PART F/S
The financial information required by this item is included as set
forth on Page F-1.
PART III
Item 1. Index to Exhibits.
All exhibits set forth below are provided herewith.
3.1 Articles of Incorporation and Amendments thereto.
3.2 By-Laws and Amendments thereto.
4.1 Form of Common Stock Certificate.
4.2 Form of Certificate of the Designation, Preferences,
Rights and Limitations of Series A Preferred Stock
10.1 LPS Acquisition Agreement dated May 28, 1998
10.2 Torland Acquisition agreement dated May 1999
10.3 Torland loan document #1
10.4 Torland loan document #2
10.5 Torland loan document #3
10.6 Torland loan document #4
16.1 Letter on change of certifying accountant
21.1 Subsidiaries of the registrant
27.1 Financial Data Schedule for the period ended May 31, 1998
27.2 Financial Data Schedule for the year ended May 31, 1999.
27.3 Financial Data Schedule for the quarter ended August 31, 1999.
<PAGE>
Item 2. Description of Exhibits.
The Exhibits required by this item are included as set forth
in the Exhibit Index.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
American Group, Inc.
November 2, 1999 By /s/ Eric W. Deckinger
Director and President
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