On July 17, 1998, prior to its acquisition by the Company, NBMDE entered into an Exclusive Distribution Agreement with both BMC-US and BMC-CAN. In exchange for the exclusive rights to sell Bontempi Snc. instruments in the U.S., Mexico and though the World Wide Web. As part of this Agreement, NBMDE was to pay $307,999 which was convertible to shares of NBMDE's restricted common stock and to issue 2,374,999 shares of its restricted common stock to Bontempi and its shareholders, including 658,333 shares to Victor Bianchi, currently serving as a Director of the Company. Bontempi and its shareholders converted the remaining $258,000 of the amount due pursuant to a notice of conversion dated October 10, 1998 to 3,225,000 shares of the Company's restricted common stock. The Company relied upon Section 4(2) of the Act and Rule 506 and Section 402(b)(9) of the Massachusetts Code. No Form D was filed with the SEC.
In June 1998, prior to its acquisition with the Company, NBMDE entered into a stock exchange agreement with DermaGuard whereby NBMDE acquired ten percent (10%) or 700 shares of the issued and outstanding shares of DermaGuard's Common Stock in exchange for three percent (3%) or 150,000 shares of NBMDE's issued and outstanding Common Stock. NBMDE relied upon Section 4(2) of the Act, Rule 506, Section 402(b)(9) of the Massachusetts Code and Section 51:705 of the Louisiana Code. No Form D was filed with the SEC.
In July 1998, prior to its acquisition by the Company, NBMDE entered into an agreement with each of its 12% bondholders and the holder of the 12% Preferred Series A shares by which all of such holders, except one, agreed to convert their bonds, exercise their warrants and permit the NBMDE to entered into a share exchange agreement and merger with a public company with distributions to be made at the time that NBMDE executed a share exchange agreement. The one objecting bondholder, First Pacific Master Superannuation Fund filed suit in Massachusetts against the Company in March 1999. No Form D was filed with the SEC.
On October 1, 1998, the Company sold 9,640,724 shares of its common stock to NBMDE for $120,509. These shares represent 2,410,181 post split shares. NBMDE promptly distributed these shares to its shareholders pro-rata at a price of $0.05 per share for a property distribution valued at $120,509. This represented approximately 18.22 percent of each person's share holdings of NBMDE as of August 19, 1998. In each instance, the issuance of securities was to its own security holders and either pursuant to a merger, share exchange or reorganization or pursuant to a dividend or a property distribution which was duly voted upon and approved by the shareholders of both corporations. The Company claimed the exemption from registration in connection with each of the following issuances under Section 3(b) of the Act and Rule 504. In addition, the Company relied upon the following statutes in the states in which the shareholders were resident: Alabama Code Section 8-6-11(12); Arizona Code Sections 44-1844(5) and/or 44- 1844(7); California Code Section 25103(c) and Rule 260.103; Florida Code Section 517.061(4) or (6); Georgia Code Sections 10-5-9(6) and (8); Illinois Code Section 4 [5/4](I); Indiana Code Sections 23-2-1-2(11) and (15); Louisiana Code Sections 51:709(6), (8) and (12); Massachusetts Code Section 402(11); Minnesota Code Section 80A.15(n); Missouri Code Section 409.402(11);New Hampshire Code Section 421-B:17(l) and (n); New Jersey Code Section 49:3- 50(11); New York Code Section 80.5; North Carolina Code Section 78A-17(11); Ohio Code Section 1707.03(K)(1) and (2); Pennsylvania Code Section 203 [70 P.S. 1-203](q); Rhode Island Code Section 7-11-402(13) and (16); South Carolina, Section 35-1-310(11); Texas Code Section 5 [581-5](E) and (G); Vermont Code Section 4204a(4) and (5); Virginia Code Section 13.1- 514(B)(8) and (14); and Washington Code Section 21.20.320(11); Wisconsin Code Section 551.2(13) and (14). No Form D was filed with the SEC.
The state exemptions in the transaction listed above contained one or more of the following terms: a) the Company was issuing a stock dividend or other distribution out of its retained earnings or surplus; b) nothing of value was given by the stockholders for the distribution, including no commission or other remuneration and no surrender of the right to a distribution in cash or property other than the securities; c) the transaction was pursuant to an exchange of securities with its existing security holders; d) the transaction was authorized by a majority of the shareholders; or e) the transaction was pursuant to a merger. In each instance, the Company complied with all state requirements, except that the Company failed to file an M-11 in the state of New York.
On October 8, 1998, the Company entered into a share exchange agreement with NBMDE, which wholly-owned two dormant subsidiaries, MMG, Inc., a Massachusetts corporation formed in March 1997 and Virushield Inc., a Massachusetts corporation formed in December, 1997. Prior to the closing of the share exchange, the Company conducted a pre-share exchange 4 to 1 reverse split of its common stock and a 20 to 1 reverse split of its preferred stock. The Company then issued 14,988,614 shares of its restricted common stock to NBMDE's shareholders in a 1 for 1 exchange for all of the issued and outstanding shares of NBMDE. The predecessor of NBMDE was MMG. At the time of the share exchange, NBMDE became a wholly-owned subsidiary of the Company. As a result of this acquisition, warrants to purchase 1,922,800 shares of NBMDE's restricted Common Stock exercisable at $1.25 and warrants to purchase 402,000 shares of NBMDE's restricted Common Stock exercisable at $2.50, were converted to an equal number of warrants to purchase restricted Common Stock of the Company, which Company warrants are exercisable for three (3) years from the date of their issuance. The Company relied upon Section 4(2) of the Act and Rule 506 and Section 7309A of the Delaware Code and the Nevada Exemption. On October 15, 1998, the Company amended its Articles of Incorporation changing its name to National Boston Medical, Inc. No Form D was filed with the SEC.
On October 9, 1998, prior to changing its name, the Company entered into a Consulting Agreement with Good Works, Inc. to provide corporate growth development consulting services to the Company in exchange for issuance of 500,000 shares of the Company's Common Stock. The Company relied upon Section 3(b) of the Act and Rule 504 and the Florida Exemption. No Form D was filed with the SEC.
On October 9, 1998, prior to changing its name, the Company entered into a Consulting Agreement with Rothschild whereby Rothschild agreed to provide corporate growth development consulting services as a media consultant to the Company in exchange for issuance of 250,000 shares of the Company's Common Stock. The Company relied upon Section 3(b) of the Act and Rule 504 and the Florida Exemption. No Form D was filed with the SEC.
In October and November 1998, the Company issued 1,702,488 shares of its unrestricted Common Stock to eleven (11) individuals and companies in exchange for services rendered which were valued at $68,100. The Company relied upon Section 3(b) of the Act and Rule 504, the Florida Exemptions, and Massachusetts Codes Section 402(b)(9); Nevada Code Section 90.530(11); South Carolina Code Section 35-1-320(9) and no state exemption for the one investor which was a Bahamian corporation. The Company relied upon a South Carolina exemption from registration, although the Company failed to file with the state securities bureau as mandated by the state statute. Sec. 35-1-320(9) states: any transaction pursuant to an offer directed by the offeror to not more than twenty-five persons, other than those designated in item (8) of this section, in this State during any period of twelve consecutive months, whether or not the offeror or any of the offerees is then present in this State, if (a) the seller reasonably believes that all the buyers in this State, other than those designated in item (8) of this section, are purchasing for investment and (b) no commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer in this State, other than those designated in item (8) of this section; but the Securities Commissioner may by rule or order, as to any security or transaction or any type of security or transaction, withdraw or further condition this exemption, increase or decrease the number of offerees permitted or waive the conditions in clauses (a) and (b) with or without the substitution of a limitation on remuneration and the Securities Commissioner, further, may require persons claiming this exemption to notify him in writing of the claim of exemption, the number of offers extended and to whom made at any point during the offering process. No Form D was filed with the SEC.
In November 1998, the Company issued 185,055 shares of its unrestricted Common Stock to six (6) individuals and companies who should have received the property distribution made in October, 1998, but did not receive their shares at that time. These shares were valued at $9,253. The Company relied upon Section 3(b) of the Act and Rule 504, the Florida Exemption, and New York Code Section 80.9 and no state exemption for the three (3) parties which were Bahamian corporations. No Form D was filed with the SEC.
|
