NOTE C - PROFESSIONAL FEES (continued)
In July 2000, the Company retained a business advisor to provide various
business consulting and planning services. Terms of the agreement provided for
the following:
- five year term through December 31, 2004;
- stock option at $.001 per share on 3,000,000 shares of restricted
stock upon signing of the agreement;
- stock option at $.001 per share on an additional 1,000,000 shares of
restricted stock effective January 1, 2001;
- stock option at $.001 per share on an additional 1,000,000 shares of
restricted stock effective January 1, 2002.
During the nine months ended September 30, 2000, the business advisor exercised
the option to acquire 3,000,000 shares of restricted common stock. The stock
issued under this option was recorded at the stock's average simple traded value
over a defined period less a 15% discount because of its restricted nature. The
exercise of this option has been recorded as prepaid professional services and
will be amortized over the life of the consulting agreement. For the nine months
ended September 30, 2000, amortization of prepaid professional fees amounted to
$79,050.
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