ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
Private Placements
On March 31, 1999, the Company entered into a cancellable special services
agreement with The Baldridge Company, an unrelated active participation
investor. Pursuant to this agreement, Baldridge was to provide various public
relations and marketing services to the Company in exchange for the right to
purchase 87,500,000 shares of the Company's stock for $1,000,000. The purchase
of these shares was structured in stages, at varying per share prices ranging
from $.0025 to $.20 per share. At March 31, 1999, the shares associated with
this agreement were recorded as subscribed common shares.
In accordance with the above agreement, upon collection of the initial
installment subscription price for the first stage, 25,000,000 shares of common
stock were issued. For these shares, the $812,500 difference between the fair
value of the stock at March 31, 1999, and its selling price has been recorded as
stock promotion expense. This was the only stage exercised by Baldridge.
On or about September 1, 1999, the Company was delisted from the OTCBB.
Baldridge decided at that time not to continue purchasing the stock as agreed
and defaulted on the contract. The Company notified Baldridge of the default
and gave the required ten-day notice as specified in the contract.
Subsequently, the Company reduced the subscription price on the remaining
62,500,000 shares to $0.005 per share. In the accompanying financial statements
the stock subscription receivable was adjusted to reflect the revised
subscription price.
On March 4, 2000, the Company entered into an agreement with Harding Asset
Funds, Inc. to purchase the remaining 62,500,000 shares for $0.005 or a total of
$312,500. Harding was one of the original partners with Baldridge.
secinfo.com |
