The sand just ran out of Ed's clock.
biz.yahoo.com
13-Apr-2005
Other Events, Results of Operations, Financial Statements and Exhibits
ITEM 8.01 OTHER EVENTS
Subsequent to the filing of our Current Report on Form 8-K, filed with the Securities and Exchange Commission (the "Commission") on March 23, 2005 and the amended Current Report on Form 8-K/A, filed with the Commission on April 1, 2005 (the "Form 8-Ks"), we have continued to review the facts and circumstances regarding our previous filings with the Nevada Secretary of State and research the impact our previous disclosures have on our current shareholders. It is our determination, after such review and research, that our current articles of incorporation, as amended, allow for the issuance of 50 million shares of common stock. As of the date of this filing, we have issued 128,824,698 shares of our common stock. Therefore, all shares of common stock issued in excess of 50 million are void pursuant to Nevada corporate law. The Company issued all of its authorized shares of common stock on or before November 26, 2001. As a result of this determination, the Company believes that many of the shares of common stock that are publicly traded are not valid, as many of the shares that are trading were issued after the Company had issued 50 million shares of common stock.
The Company has determined that only the current holders of the original 50 million shares of common stock that were issued (the "Original 50 Million") have rights as shareholders, including the right to vote on any matters submitted to the shareholders of the Company. The Company is currently working with its transfer agent to determine the identity of the current holders of the Original 50 Million. However, since a portion of those shares have been transferred into street name, the Company is unlikely to be able to determine the current holders of all of the Original 50 Million. The Company is potentially liable to any person who holds shares of the Company's common stock that is not part of the Original 50 Million.
Since November 2001, the Company has entered into various financing arrangements, including subscription agreements entered into with four accredited investors on January 18, 2005, as amended, for the sale of secured convertible notes. In connection therewith, the Company made various representations and warranties to the investors, including representations and warranties concerning the number of shares of common stock the Company is authorized to issue. As a result of these recent discoveries, the Company is in default, although none of the investors have declared a default by the Company, provided written notice of such defaults, or have sought to enforce their rights pursuant to the agreements.
In the Form 8-Ks, the Company indicated that it intends to file a proxy statement with the Commission asking our shareholders to ratify all our previous actions. Upon further research, the Company has determined that Nevada law prohibits a subsequent ratification by shareholders of shares issued in excess of the number of authorized shares of common stock. Therefore, the Company does not intend to seek ratification of the prior issuances.
The Company has completed, or is currently in the process of taking, the following actions regarding the above:
......OUR COMPANY AND/OR OUR CEO MAY BE SUBJECT TO FINES, SANCTIONS AND/OR PENALTIES OF AN INDETERMINABLE NATURE AS A RESULT OF POTENTIAL VIOLATIONS OF FEDERAL SECURITIES AND STATE SECURITIES AND CORPORATE LAWS IN CONNECTION WITH ACTIONS TAKEN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED UNDER NEVADA LAW.
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