ALL - I am sending a sample S-8 to Wasef to be included on the Unofficial SEXI Home Page as soon as the my hard copies arrive (I am working from FAXed copies which are not as easy to read or duplicate). I am also building an EXCEL spreadsheet with a summary of the most pertinent S-8 info that I will also send to Wasef for downloading by anyone who wants to see the overall picture and do their own analysis. Until those items get there, here is a quick summary of what an S-8 is and what these show.
Let's start with what a S-8 is supposed to be. It is a securities Registration Statement to be filed with the SEC, and is intended to be used for registering shares that are to be used in an "employee benefit plan" and that will actually be issued from time to time as part of such a plan. However it is often used for other "miscellaneous" registrations of shares to be issued, such as for services rendered (seems like a huge loophole to me!).
What each of these 16 separate S-8's purport to be is a monthly (sometimes 2 or 3 in a month) distribution plan for services rendered (or to be rendered), such as S-8 file #333-5644 that is titled "DECEMBER 1995 DISTRIBUTION AGREEMENT". They cover the months from Dec 95 through Aug 96. (All of the names and numbers of shares that I have posted previously, are a accumulation from all 16 of the S-8's filed on Sept 24th (one day after the filing of the 10KSB and 1st Qtr 10Q).
Each of the S-8's show:
1. the Class of Securities being registered as "Common Stock",
2. the total number of shares being registered (from 772,414 for early April to 7,667,243 for late Feb) (sometimes they didn't even get the math right!)
3. the Offering Price (based on the Closing Price the day before the "issuance date" (from $.25 in Jan to $3.43 in June)
4. the "Aggregate Offering Price" (total shares times Offering Price) (from $375,000 in Jan to $20,064,207 in June)
5. the Registration Fee - I presume actually paid to the SEC. (I didn't get all of these, but what I have goes from $146 to $6919 - did they actually spend money to tell the SEC all of this???)
On the second page of each, titled "PROSPECTUS" (all the same) there is a statement referring to the shares being registered that reads: "...which will be issued, as set forth herein, to individuals for services rendered. These individuals have rendered services vital to the Company. All of the stock was granted to such individuals pursuant to individual written agreements for such services. The Company has been advised by the Selling Securities Holders that they may sell all or a portion of their shares or Common Stock from time to time in the over-the-counter market in negotiated transactions, directly or through brokers or otherwise, and that such shares will be sold at market prices prevailing at the time of such sales or negotiated prices."
(This language is in spite of other language in some of the "individual written agreements" which APPEARS to limit some sales - referred to later.)
Each S-8 has several pages of gobbledy-gook on the Company and then, under the title "GRANT OF COMMON STOCK", a list of the individuals and companies (with address - not always complete!), the number of shares they are "to receive", and a percentage that appears to be the percentage of their shares issued of the total shares outstanding (there is no statement of confirmation of that, or of how the percentage was calculated, to be found).
At the end of each list, the following 2 paragraphs appear:
"These individual professionals have provided services necessary to promote the Company and its technology."
"The services rendered by the above named individuals were not in connection with the offer or sale of securities in a capital raising transaction. All of the stock is issued pursuant to individual agreements and is not issued pursuant to any program or plan and is not being administered by the Board of Directors, the Company or any committee. There are no restrictions placed on any of the shares of the above mentioned individuals."
ISN'T THAT PRECIOUS! THE REAL QUESTION HERE, AS I SEE IT, IS THIS: DID THE COMPANY RECEIVE FAIR VALUE FOR THE SHARES DISTRIBUTED? If so, and in a few cases that may well be (and thank you! - let's not Damn everyone on this list until we have an idea what the company got for the shares issued!), but for those who got more shares at a lower price than the value received, here is just the information that the SEC and Justice Department should need to investigate and prosecute the #%*&@ out of them!!!
Then there are more pages of gobbledy-gook, a signature page (more on this separately!), and then an "Exhibit" of the "agreement" for each named stock recipient. (I'll go into those separately, as well.)
What I don't understand, is, why, with a huge scam like this going on, *apparently* (for the sake of not trying to pass final judgment with only limited facts - so I'm being more than generous!), why, were these S-8's filed at all???? Surely, NO ONE could have been thinking that somehow the SEC was NOT going to look into all these shares going out on such flimsy info????
So that is WHAT they are with just a few general comments. Now, I intend to break down my comments/analysis of the S-8's into bite size pieces - and make separate postings for each issue. Let me know if anyone gets bored seeing all the posts from me and I'll try another way. I will presume that most of you are VERY interested unless I hear from you to the contrary!
Of course, all of my comments are just my opinion, and subject to human error - for what they are worth, I gladly offer them.
SEDONA John (after 2 half days off, back in the SEXI traces, but also back in Paradise again!) |
