MXON>>Insiders & shares owned + options(12,317,348 Shares)
Percent of
Relationship Common Shares Outstanding
Name and Address to Company Owned Shares
---------------- ------------ ------------- -----------
Gifford M. Mabie Sole Officer 368,750 (1) 2.92%
8908 S. Yale Ave. and Director
Tulsa, OK 74137
Rhonda R. Vincent Beneficial Owner 1,142,750 (2) 9.01%
8908 S. Yale Ave.
Tulsa, OK 74137
Sole Officer and
Director and
Beneficial Owner
as a group
(2 persons) 1,511,500 11.70%
(1) Includes 26,000 shares owned directly, 55,000 shares owned indirectly
through Investor Relations Corporation, a company owned 50% by Mr. Mabie, and
300,000 options exercisable at $0.50 per share.
(2) Includes 878,800 shares owned directly, 50,000 shares owned indirectly
through Investor Relations Corporation, a company owned 50% by Ms. Vincent, and
300,000 options exercisable at $0.50 per share.
Common Stock Options
At December 15, 1999, Maxxon had outstanding a total of 2,800,000 options
to purchase shares of its common stock at $0.50 per share, 1,520,000 of which
were exercisable. Of the 2,800,000 options outstanding, 1,200,000 are employee
stock options granted by the Board in January, 1998 and 1,600,000 are consultant
options granted by the Board in November, 1999. The exercise price was equal to
the market price of the Company's common stock as quoted on the OTC Bulletin
Board on the date of grant. The options expire ten years from the date of the
grant if not sooner exercised:
14
Options
Exercisable
Relationship Options at
Name and Address to Company Outstanding 12/15/99
---------------- ------------ ----------- -----------
Gifford M. Mabie........... Sole Officer 300,000 300,000
Rhonda R. Vincent.......... Key Employee 300,000 300,000
Dr. Thomas Coughlin........ Key Employee 200,000 200,000
Frederick Slicker.......... Key Employee 200,000 200,000
Vicki Pippin............... Key Employee 200,000 200,000
----------- -----------
Total Employee Options 1,200,000 1,200,000
Wayland Rippstein
and Associates
(3 persons)................ Consultant 1,600,000 320,000
----------- -----------
Total Options Outstanding and Exercisable...... 2,800,000 1,520,000
=========== ===========
The options to Wayland Rippstein and associates were granted to Wayland
Rippstein (800,000 options), Ken Keltner (400,000 options) and Lynn Carter
(400,000 options)in connection with the execution of the Rippstein License . The
options expire October 31, 2009 and are subject to certain vesting conditions as
follows: (1) 20% of the options shall become vested and exercisable immediately
upon execution of the Rippstein License, (2) 20% of the options shall become
vested and exercisable when a fully working safety syringe has been produced and
demonstrated to be safe and reliable and meeting the specifications, (3) 20% of
the options shall become vested and exercisable upon issuance of a U.S. Patent
covering the Ripp Syringe, (4) 20% of the options shall become vested and
exercisable upon the production of (5) 20% of the options shall become vested
and exercisable upon FDA approval of the Ripp Syringe. As of December 15, 1999,
20% of the options granted were exercisable.
(c) Family Relationships
None.
(d) Involvement in Legal Proceedings of Officers, Directors, and Control Persons
None.
Item 7. Certain Relationships and Related Transactions
(a) Describe Related Party Transactions
During 1997 and 1998, the Company loaned Mr. Mabie $33,500 and $17,500,
respectively, at an interest rate of 8% per year. The loans and accrued interest
were canceled during 1998 and accounted for as G&A expense.
During 1997 and 1998, the Company loaned Ms. Vincent $29,000 and $7,500,
respectively, at an interest rate of 8% per year. The loans and accrued interest
were canceled during 1998 and accounted for as G&A expense.
During 1997, the Company issued 108,000 shares of stock through conversion
of common stock warrants by Bryant Investments, a founder of Cerro Mining. Of
the 108,000 shares issued, 43,500 shares were issued in exchange for $87,000 in
cash and 64,500 were issued in exchange for a $129,000 promissory note. During
1998, the Company canceled the promissory note and accrued interest of $4,677
pursuant to a settlement agreement with Bryant Investments. The settlement was
accounted for as G&A expense.
In January 1998, the Board granted 1,750,000 options to purchase common
stock at exercise prices ranging from $0.50 to $.2.00 per share to StockbrokerRelations, Inc. ("SRI"). During 1998, SRI exercised 500,000 options at prices
ranging from $0.50 and $0.75 per share which resulted in the Company receiving
$307,400 in cash and $18,100 in services. In September 1998, the Board granted
70,000 options to purchase common stock at $0.75 per share to Morgan-Phillips,
Inc., a third-party investor relations firm. Morgan-Phillips exercised all
70,000 options during 1998, which resulted in the Company receiving $52,500 in
cash.
In June 1998, the Company issued 350,000 shares to Sean Stanton, a founder
of Cerro Mining, as a result of a settlement agreement.
During 1999, the Company sold 390,693 shares of its common stock to
third-party investors for $342,425 in cash, issued 14,069 shares of its common
stock to a non-affiliate as a consulting fee in connection with the sale of
common stock, issued 300,000 shares of its common stock to employees in
connection with the exercise of stock options which resulted in the Company
receiving $150,000 in cash, and issued 150,000 shares of its common stock to
Morgan-Phillips, Inc. in exchange for services valued at $150,000.
In addition, Maxxon has entered into indemnification agreements with
Messers. Mabie, Slicker, and Coughlin and Ms. Vincent and Ms. Pippin, a form of
which is attached hereto as Exhibit 6.3. These agreements provide that Maxxon
will indemnify each person for acts committed in his or her official capacities
and for virtually all other claims for which a contractual indemnity might be
enforceable.
Foreign Patent Protection
The U.S. patent covering the Maxxon safety syringe
does not extend to foreign countries and the Company does not
presently have any foreign patent protection for its product.
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