"The remaining 4,100,000 shares were sold to offshore
investors pursuant to Regulation S under the Securities Act. The shares were
issued at the effective price of $0.5183 per share, or $3,213,415 in the
aggregate."
On February 23, 1998, Loraca acquired all of the issued and outstanding shares
of common stock of NMMC (formerly New Mexico Mortgage Company, Inc.) pursuant to
an Agreement and Plan of Reorganization. Loraca was organized on March 11,
1996, and had no revenues or operations prior to the merger with NMMC. The
acquisition was a transaction by an issuer not involving any public offering.
The investment decision by Loraca was made by investors who were provided with
access to information regarding Loraca and NMMC necessary to make an informed
investment decision. In connection with its acquisition of NMMC, Loraca issued
an additional 6,200,000 shares of Common Stock. Of such shares, 2,100,000 were
issued pursuant to Section 4(2) of the Securities Act to Mr. Baca, an accredited
investor, in exchange for all of the outstanding shares of NMMC held by Mr. Baca
and his wife, Susan Baca. The remaining 4,100,000 shares were sold to offshore
investors pursuant to Regulation S under the Securities Act. The shares were
issued at the effective price of $0.5183 per share, or $3,213,415 in the
aggregate.
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