PART II — OTHER INFORMATION
| Item 1. |
Legal Proceedings. |
None.
| Item 2. |
Changes in Securities and Use of Proceeds. |
Recent Sales of Unregistered Securities
During the quarterly period ended March 31, 2002, the Company issued securities, for certain private transactions, in reliance on Section 4(2) of the Act, as described below:
Common Stock
(1) On February 1, 2002, we issued 100,000 shares of restricted common stock for consulting services, valued and recorded at $36,300.
(2) On February 21, 2002, we issued 75,000 shares of restricted common stock to a director for board of director services, valued and recorded at $23,625.
(3) On March 31, 2002, we issued an aggregate of 500,312 shares of restricted common stock to officers, as other compensation pursuant to employment agreements, valued and recorded in the aggregate at $181,577. See Item 5 - Other Information, Long Term Executive Employment Agreements, for more information.
Preferred Stock
(4) During January 2002, we sold an aggregate of 59,750 shares of our Series C Convertible Preferred Stock (“Series C Preferred Shares”) for an aggregate amount of $1,195,000 pursuant to a private placement offering. We received $1,020,000 in cash and the sum of $175,000 in subscriptions receivable was outstanding at the end of the first quarter. The Series C Preferred Shares are convertible into common stock at an average conversion price of $.24 upon conversion of each Series C Preferred Share, subject to a 180 day waiting period from the date of each subscription and/or payment thereunder and availability of common stock upon conversion. A corporation in which a nominee for election as a director, owns a material interest, purchased 25,000 shares of the foregoing Series C Preferred Shares for $500,000 in cash, which Series C Preferred Shares are convertible into common stock at a price of $.22 per share.
(5) During February 2002, we sold an aggregate of 214,150 shares of our Series C Preferred Shares for an aggregate amount of $4,283,000 pursuant to a private placement offering. We received $933,000 in cash and the sum of $3,350,000 in subscriptions receivable was outstanding at the end of the first quarter. The Series C Preferred Shares are convertible into common stock at an average conversion price of $.30 upon conversion of each Series C Preferred Share, subject to a 180 day waiting period from the date of each subscription and/or payment thereunder and availability of common stock upon conversion. A corporation in which a nominee for election as a director, owns a material interest, purchased 150,000 shares of the foregoing Series C Preferred Shares for $3,000,000 pursuant to a subscription agreement, which Series C Preferred Shares are convertible into common stock at a price of $.24 per share (See Item 5. Other Information for more details on this transaction).
(6) During March 2002, we sold an aggregate of 6,250 shares of our Series C Preferred Shares for an aggregate amount of $125,000 pursuant to a private placement offering. We received $125,000 in cash. The Series C Preferred Shares are convertible into common stock at an average conversion price of $.32 upon conversion of each Series C Preferred Share, subject to a 180 day waiting period from the date of each subscription and/or payment thereunder and availability of common stock upon conversion.
| Item 3. |
Defaults Upon Senior Securities. |
None.
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