Professional Fees
In March 2000, the Company issued 2,000,000 shares of restricted stock for
professional legal services to be rendered during the year ended December 31,
2000. The cost of these services was recorded at the stock's average simple
traded value over a defined period less a 15% discount because of its restricted
nature. For the year ended December 31, 2000, professional fees amounting to
$130,000 were recorded under this arrangement.
In July 2000, the company has retained Dr. Campbell as a Senior Consultant with
specific assignments in the areas of new product development, public relations
and technology assessment. Dr. Campbell has extensive experience in public and
investor relations strategies, general business strategy formulation and other
forms of executive consulting including computing science and
telecommunications.
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Terms of the agreement provided for the following:
o Five year term through December 31, 2004;
o Stock option at $.001 per share on 3,000,000 shares of restricted stock
upon signing of the agreement;
o Stock option at $.001 per share on an additional 1,000,000 shares of
restricted stock effective January 1, 2001;
o Stock option at $.001 per share on an additional 1,000,000 shares of
restricted stock effective January 1, 2002.
During the year ended December 31, 2000, Dr. Campbell exercised the option to
acquire 3,000,000 shares of restricted common stock. The stock issued under this
option, which was valued at $316,200, 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 year ended December 31, 2000, amortization of prepaid professional fees
amounted to $105,400.
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