ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 25, 2002, information regarding the
beneficial ownership of shares of Common Stock by each person known by the
Company to own five percent or more of the outstanding shares of Common Stock,
by each of the Officers, by each of the Directors, and by the Officers and
Directors as a group. At the close of business on March 25, 2002, there were
174,179,487 shares issued and outstanding of record, as well as 40,875,507
shares issuable in the event of the conversion of the $2,261,715 of Convertible
Debentures outstanding and the $486,962 of interest thereon as of December 31,
2001.
Shares of Percentage
Common as of
Name and Address of Beneficial Owners Stock 03/25/2002(1)
------------------------------------- ---------------- --------------
Sheldon C. Fenton 30,116,281(2) 17.29%
160 Eglinton Avenue East, Suite 500
Toronto, Ontario M4P 3B5
Rene A. Gareau 125,000 0.07%
4273 Boca Point Drive
Sarasota, Florida 34238
Dunvegan Mortgage Corporation 29,529,281(3) 16.95%
222 Delaware Ave., PO Box 2306
Wilmington, Delaware 19899
Paul L. Simmons 4,427,600(4) 2.54%
8825 Laurel Drive
Pinellas Park, Florida 33782
Russell D. Van Zandt 741,560 0.43%
17543 Bearpath Trail
Eden Prairie, Minnesota 55347
Alfred A. Ritter 0 --
Rua Baronesa DeBeck
Malveira Da Serra
2750 Cascais Portugal
H. Quotient Inc. 10,900,000(5) 6.26%
(& subsidiary Quotient Capital Corp.)
8150 Leesburg Pike, Suite 503
Vienna, VA 22182
All Directors and Officers 35,410,441 20.33%
as a Group (5 persons)
----------
(1)Based on 174,179,487 shares issued and outstanding as of March 25,
2002.
(2)Includes Mr. Fenton's direct ownership of 383,000 shares, indirect ownership of 22,333,014 shares owned by Dunvegan Mortgage Corporation, of which Mr. Fenton is an officer and director, as well as 7,196,267 shares issuable in the event of conversion of the $471,215 of Convertible Debentures [principal] owned by Dunvegan Mortgage Corporation and the $248,411 of interest thereon as of December 31, 2001. Also includes 204,000 Shares held in the name of Mr. Fenton's wife for the benefit of Mr. Fenton's adult daughter and in which he disclaims any beneficial interest.
Does not include 1,324,075 Convertible Debenture Warrants owned by Dunvegan Mortgage Corporation.
For informational purposes, also does not include 19,630,128 Series I ($.499) and Series II ($.001) Warrants previously owned by Dunvegan Mortgage Corporation but assigned to 1192615 Ontario Limited et al and in which he disclaims any beneficial interest.
For informational purposes does not include 585,500 Shares owned by his daughter in which he disclaims any beneficial interest.
(3)Includes 7,196,267 shares issuable in the event of conversion of the $471,215 of Convertible Debentures [principal] owned by Dunvegan Mortgage Corporation and the $248,411 of interest thereon as of December 31, 2001. Does not include 1,324,075 Convertible Debenture Warrants or 154,163 shares of Series B Preferred Stock.
(4)Includes Mr. Simmons' direct ownership of 2,753,000 shares and indirect ownership of 674,600 shares owned by International Center for Technology Transfer, Inc., of which Mr. Simmons is an Officer and Director and 1,000,000 shares owned jointly by Simmons and ICTT.
(5) Does not include 500,000 shares common shares held personally by D.Cohn, President & CEO of H. Quotient Inc.</b.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Dunvegan Mortgage Corporation, a corporation of which Sheldon C. Fenton, the Company's President/CEO and a director, is an officer and a director, entered into various financing transactions with the Company prior to January 1, 1999.
As a result of those transactions, as of December 31, 2001, Dunvegan Mortgage Corporation continued to hold 154,163 shares of Series B Preferred Stock (88.5%), 22,333,014 shares of our Common Stock (12.8%), Convertible Debentures
(1996-1998) in the principal amount of $471,215 (100%), 1,324,075 Convertible Debenture Warrants (33%) and 890 Series D Dunvegan Warrants exercisable to purchase 890 shares of an as-yet-undesignated series of Preferred Stock having
25,000 votes per share, at a price of $1.00 per share.
During fiscal year 2001, Milfen Limited purchased a $50,000 debenture, made 22 short-term advances totaling $640,500 which were converted to debentures, and purchased five additional debentures for principal sums totaling $145,000.
Milfen Limited is a Canadian corporation controlled by the mother of Mr. Shelley Fenton, our President and CEO (see Item 5, "Sales of Unregistered Securities
During Fiscal Year 2001").
On June 20, 2001, we sold $150,000 of SGD International, Inc. trade credits to H. Quotient, Inc. for 430,000 shares of the Common Stock of H. Quotient, Inc., which shares were unregistered (restricted as to further transfer). The shares
were valued at $.30 each, or a total of $129,000 but were recorded at cost less a 50% estimated marketability discount due to sale restrictions.
In 1995 the Company entered into a Loan and Security Agreement with Dunvegan Mortgage Corporation, a company of which Sheldon Fenton is an officer and director. On October 5, 1998 Dunvegan Mortgage Corporation assigned their
interest in the balance of the Loan and Security Agreement (and conversion entitlements thereunder) to a group of companies, some of which have as their officers or directors siblings of Mr. Fenton. Neither Mr. Fenton nor Dunvegan
Mortgage Corporation have any further interest in the Loan and Security Agreement and disclaim any beneficial interest therein.
NORPAK MANUFACTURING, INC.
During 1999 we entered into a strategic alliance agreement with a Canadian medical products manufacturer/distribution company in which a family members of Sheldon C. Fenton, the Company's President/CEO and a director, then owned
directly or indirectly approximately 48% of the corporation. During January 2000, members of Sheldon C. Fenton's family and/or entities of which they are officers or directors increased their ownership to a majority of the corporation. Under the strategic alliance agreement we have agreed to market, sell and distribute the Canadian company's products to customers in the U.S.
Norpak Manufacturing is also one of two manufacturers contracted to produce the SunSwipe(TM) product line for the Company.
TANLON MANAGEMENT SERVICES, INC.
During fiscal years 1999, 2000 and 2001 we utilized the services of Tanlon Management Services, Inc., a management company which Sheldon C. Fenton, [the Company's President/CEO] is an officer and a director. We owe $120,000 for these professional services for each of 1999 and 2000, and $90,000 for 2001, for which the $30,000 due for the 4th quarter was waived. These fees are intended to cover
the salaries of relevant Tanlon employees who provide various support services; none of the fees are intended to compensate Mr. Fenton. At December 31, 2001 these fees remain unpaid in the amount of $303,195 and are included in accounts
payable.
In addition to the accrued indebtedness for services, the Company owes Tanlon an additional $79,564.88 for advanced expenses for related travel, courier/express deliveries, and telephone costs.
Veridien Corp · 10KSB · For 12/31/1
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