ITEM 5.02. CHANGES IN CONTROL OF REGISTRANT.
As used in this Current Report, the term the "Company" refers to
purchase agreement (the "Loan Conversion and Stock Purchase Agreement") with
Charles T. Maxwell("Maxwell"), its chairman of the board, to convert shareholder loans aggregating $447,000into common stock through an unregistered issuance of common stock. On May 24, 2014the board of directors unanimously approved the Loan Conversion and Stock Purchase Agreement and adopted a resolution to convert the aggregate $447,000of loans from the Chairman of the Board into common stock on May 28, 2014.
(b) The simultaneous extinguishment of debt and exchange for common stock will
take place on
May 28, 2014. Because there was no public offering, the issuance of common stock pursuant to the Loan Conversion and Stock Purchase Agreement was undertaken by the Company in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933.
(c) Pursuant to the Loan Conversion and Stock Purchase Agreement, the Company
will issue a number of shares of common stock to the majority shareholder and Chairman of the Board equal to the aggregate loan balance of
$447,000divided by high market price of the Company's common stock for the 15 trading days preceding the closing, or $0.03per share.
Upon conversion of debt to common stock, Maxwell will receive 14,900,000 shares of common stock in exchange for forgiveness of an aggregate of
The following sets forth the information required by Item 701 of Regulation S-K with respect to the unregistered sale of equity securities the Company completed on
Purchase Agreement with Maxwell pursuant to which Maxwell agreed to accept, and the Company agreed to issue, 14,900,000 shares of common stock,
$.001par value in satisfaction of an aggregate balance of $447,000in unpaid shareholder loans.
(b) The shares issued upon conversion of the debt were issued exclusively to one
person who qualified as an "accredited investor" within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933 as amended (the "Securities Act"). The shares issued upon conversion of the debt were "restricted securities" under the Securities Act.
(c) The Company paid no fees or commissions in connection with the issuance of
(d) The sale of the Securities was undertaken without registration under the
Securities Act in reliance upon an exemption from the registration requirements of the Securities Act set forth in Sections 4(2) there under. The investor qualified as an "accredited investor" within the meaning of Rule 501(a) of Regulation
D. The Companydid not engage in any public advertising or general solicitation in connection with this transaction, and the investor was provided with disclosure of all aspects of the Company's business, including reports filed with the Securities and Exchange Commissionand other financial, business and corporate information. (e) Not applicable.
(f) There were no proceeds as a result of the conversion of debt.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
The exhibits listed in the following Exhibit Index are filed as part of this current report. Exhibit No. Description 10.1 Loan Conversion and Stock Purchase Agreement.