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Non-Tech : CYPT It's Real -- Ignore unavailable to you. Want to Upgrade?

To: scion who wrote (352)	1/30/2004 12:00:13 AM
From: scion	Read Replies (1) \| Respond to of 365

The term of the agreement is from April 23, 2003 through April 22, 2006. The agreement obligates the Company to pay the consultant an aggregate of $3,000,000 in cash as follows: $750,000 in 2003, $1,000,000 in both 2004 and 2005, and $250,000 in 2006.

To: scion who wrote (352)	1/30/2004 7:08:35 AM
From: tonto	Read Replies (1) \| Respond to of 365

It certainly is a pricey one considering the nominal sales...I wonder how arms length this agreement truly is?

To: scion who wrote (352)	1/30/2004 11:39:47 AM
From: Jeffrey S. Mitchell	Read Replies (2) \| Respond to of 365

As I recall, all consulting agreements require issuance of a related Form S-8 filing. But, according to recent changes made to Form S-8s, the following consulting arrangement is not legal: The services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the registrant's securities. sec.gov The purpose for this rule change/clarification is explained in an SEC publication on Microcap Fraud: ...In 1990,the Commission expanded the employee concept to permit Form S-8 to be used for offers and sales to consultants or advisors who provide legitimate services to the issuer that do not involve the offer or sale of securities in a capital-raising transaction. Since adoption of the 1990 revisions, some companies have used Form S-8 improperly to compensate consultants whose service to the company is promotion of the company's securities. This practice has been used in fraudulent promotions of microcap securities. In other cases, Form S-8 has been used to distribute securities to public investors through so-called "consultants" whose service to the issuer is selling the securities. This practice, which deprives public investors of the benefits of Securities Act registration, has been the subject of several Commission enforcement actions. The Commission will consider adopting amendments to Form S-8 and related rules designed to deter these abuses. These amendments would: * amend Form S-8 and related rules to make the form unavailable for sales to consultants and advisors who directly or indirectly promote or maintain a market for the company's securities; and... sec.gov Entire document available at: sec.gov So, pray tell, what explanation does CYPT have for this consulting agreement? - Jeff