Buyer Beware!! PRFX CEO has a history.
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Form 10-QSB -- Quarterly or Transitional Report
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Legal Matters
As of March 31, 1998, the Company was involved in various litigation matters
many of which are as a result of it's inability to meet its financial
obligations to various vendors who have supplied materials and or services to
the Company. The total amount of these claims is potentially in excess of
$2,000,000.
The Company, together with Integrated, Jerry Swon and Bruce Deichl, was named as
a defendant in a lawsuit commenced by three investors in two oil and gas
partnerships sponsored by Integrated. Management has determined that the costs
of defending this suit combined with the potential cost if the plaintiff's were
successful, dictated that a settlement be negotiated. A verbal agreement has
been reached to settle this cause of action for 350,000 shares of the Company's
common stock and a warrant to purchase an additional 350,000 shares of the
Company's common stock at $1.00 per share. At March 31, 1998 the Company has a
reserve recorded in the amount of $175,000 for the cost of this settlement,
however the settlement has not been completed.
On August 8, 1997, the Company filed suit against Mark T. Shipley, Richard D.
Barden, June Barden, Jerry Swon and Fallon and Fallon. The litigation relates to
the Company's acquisition of IPS. The petition alleges that members of the
Company's former management, former IPS management and other interested persons
committed fraudulent acts and/or omissions in connection with the acquisition.
The specific damages sought are monetary damages in an unspecified amount, as
well as relief from certain related debt, wages and agreements. Some of the
defendants have filed suit against the Company seeking payment of debts related
to IPS.</HTML>
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