AOXY-FROM RB
Regarding forgiveness of debt?the debt came from the March 9, 1998 acquisition of
some or all of IMA Telemarketing. This is covered on page 4 in the March 9th entry of
the Annual Report. AOXY paid the purchase price of $2,000,000: a $10,000 down
payment, a Promissory Note in the amount of $550,000 payable to IMA periodically, with
final payment due on April 10, 2000 and accruing compounded interest at a rate of nine
percent (9%) per annum, and 1,670,000 shares of convertible, preferred stock, par value
$.01 per share, of the Company (the "Preferred Stock"). This preferred stock was
targeted to be worth $1,102,200 ($0.66 per share) by March 1, 2000 (see Note on page
17?just before item 12?of the Annual Report).
Apparently AOXY discovered significant problems with the value of the IMA purchase.
AOXY stopped paying the promissory note by September 4, 1998 due to IMA's breach of
numerous representations, warranties and covenants (see page 5, September 4th entry of
the Annual Report). AOXY then appeared to sue IMA for $2,251,266 (see page 5,
December 9th entry of the Annual Report). By January 29, 1999, the two parties settled
(see page 5, January 29th entry of the Annual Report). AOXY purchased the Promissory
Note for $15,000 (remainder shows up as forgiveness of debt $521,894), and the
1,670,000 shares convertible stock. The stock is now AOXY?s treasury stock (see Note
on page 17 of the Annual Report). AOXY also took on obligation for an equipment lease for
$44,811.26 and a one year note of $5,000.
JJ |
