Mr. Sanders has recently been appointed to the Issuer's Board of
Directors and elected chief executive officer of the Issuer and Mr. Bossung has
recently been appointed to the Issuer's Board of Directors and elected chief
operating officer of the Issuer. Although Mr. Sanders, Mr. Bossung and the
Augustine Entities have no formal arrangements with respect to control of the
Issuer, at the present time Mr. Sanders and Mr. Bossung, as well as the
Augustine Entities in their capacity as stockholder, contemplate working
together to implement policies that they believe are in the best interests of
the Issuer and its stockholders. Mr. Sanders, Mr. Bossung and the Augustine
Entities intend to work together to formulate an ongoing business model with
respect to the Issuer. Such policies may include sale of all or substantially
all of the Issuer's assets, merger with another entity, or similar transactions.
As a result, Mr. Sanders, Mr. Bossung and the Augustine Entities are currently
contemplating various material changes in the business of the Issuer; however,
no specific plans have been finalized for any specific such change.
Delano Group Securities LLC, a Delaware limited liability company which
is owned by certain of the Augustine Entities, has entered into an agreement
with the Issuer to provide placement and investment banking services to the
Issuer, pursuant to which it received warrants to purchase 1.5 million shares of
Common Stock at $1.75 per share. A copy of that warrant agreement is attached as
Exhibit 2. Certain principals of Augustine Entities may be deemed to
beneficially own Common Stock issuable upon exercise of such warrant and such
shares are included in the amounts of Common Stock beneficially owned by the
Augustine Entities set forth on the cover pages to this Schedule 13D |
