The past is the past Risk....unless it's the present:
Lexington
On May 26, 2006, the Company’s wholly-owned subsidiary, Centerline Communications, LLC entered into an agreement to acquire specified assets and contracts of Lexington Global Net, LLC (“Lexington”), a telecommunications systems operator located in Atlanta, Georgia, with operations in the United States and Latin America, primarily in the country of Colombia. The acquisition transaction, which closed during the three months ended June 30, 2006, was paid with $25,000 cash and $100,000 of the Company's common stock to be paid based on an agreed upon value of $1.85 per share for a total of approximately 54,054 shares, to be issued in increments during a period from 60 to 180 days after the execution of the agreement. However, should the market price of the shares delivered decrease to less than $1.85 per share, one year from the date of execution of the agreement, the Company shall make up the difference between the market price and $1.85 by the issuance of additional shares or by payment of said difference in cash or a combination of cash and stock at the purchaser’s discretion.
The assets acquired under the Lexington agreement consist of property, rights, interests and other tangible and intangible assets, including rights to relationships (contractual and non-contractual) with Lexington’s customers and vendors, and certain government authorizations. The tangible assets acquired are considered of negligible value, and, accordingly, the Company allocated the entire purchase price of $125,000 to the intangible assets acquired.
Management anticipates that the associations and opportunities related to the Lexington assets will enable the generation of significant, on-going, profitable sales of telecommunications traffic through numerous customers and vendors.
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