The patent transfer license fee to David Howard seems to be where most of the post-split dilution has occurred. It accounts for 57,340,000 shares. It's a somewhat bizarre story reading the last three filings. Apparently, Howard transferred the debt to a third-party (without consulting ACII). ACII paid the $550k principal owed from the agreement date ($10K per month from Jan. 2003) using 20M shares according to the 3Q07 10Q. According to the 10K, an additional 9.6M shares were issued on October 17, 2007, immediately after the 3Q07 10Q was filed, to cover three more months of principal ($30k) and PRE-PAY $162k more (possibly principal and interest for one year?). As of 11/30/07, $228k of interest was still owed for the debt. Looking at today's 10Q, 27,740,000 shares were issued in Q108 to pay the $228k interest, and to pay off a $258k loan from the entity that obtained the debt from Howard. Why are they pre-paying $162K and then borrowing $258K from this entity?
Here are the excerpts from the last three filings:
From 3Q07 10Q: As of August 31, 2007, the Company was obligated to a former shareholder for accrued interest in the amount of $211,247, related to a cancelable licensing agreement that the Company entered into in January, 2003 with this shareholder. This licensing agreement was for the patented laser assisted chip technology, which required aggregate payments to this shareholder in the amount of $1,000,000, payable in monthly installments of $10,000. Interest on the unpaid principal is accrued at prime plus 1% or 5%, whichever is greater. During the nine months ended August 31, 2007, the Corporation issued 20,000,000 shares to an unrelated entity in exchange for the unpaid principal amount due on the obligation in the amount of $550,000. The former shareholder to whom this obligation was due assigned his rights to the principal amount due on this obligation to an unrelated third party, who was issued the 20,000,000 shares of common stock in full payment of the unpaid principal amount.
From FY07 10K: During the year ended November 30, 2006, the remaining shareholder assigned his interest in the obligation owed to him by the Company to an outside entity. AmeriChip was not a party in this assignment agreement. On August 21, 2007, the Company issued 20,000,000 shares of its common stock to the assignee of this obligation, in exchange for the accrued license fee balance owed to the assignee in the amount of $550,000 (see note 5). In addition, on October 17, 2007, the Company issued an additional 9,600,000 shares of common stock to this same assignee in the amount of $192,000, in exchange for the amount due for an additional three months of licensing fees due to the assignee in the amount of $30,000 and for a prepayment of future license fees obligations in the amount of $162,000 (See note 6).
As of November 30, 2007, the principal amount due to the shareholders under the licensing agreement was $0. The accrued interest on the principal is $228,573 and is included in accrued interest. As a result of the prepayment of license fees paid to the assignee of the remaining license fee obligation, the assignee is obligated to the Company in the amount of $162,000 as of November 30, 2007, and is included in the related party receivable.
From 1Q08 10Q: As of November 30, 2007, the Corporation was obligated to an unrelated entity for accrued interest in the amount of $228,673, related to a licensing agreement with a former shareholder. The former shareholder assigned his rights to the principal and interest amounts due under this licensing agreement to an unrelated entity during the year ended November 30, 2007. During the three months ended February 29, 2008, the Corporation issued 27,740,000 shares to various unrelated entities in exchange for the unpaid interest on this licensing agreement in the amount of $228,573, as well as a loan from the unrelated entity which was assigned the licensing agreement in the amount of $258,000. |
