CarePay Inc. (SOFE)

[bliz82]

Share structure info:

NOTE 11 – STOCK PAYABLE

As of December 31, 2007, the Company had 50,000,000 shares of common stock authorized and 49,544,226 shares issued. The Company entered into several stock option / warrant agreements with the Chairman and Executive Officer, but was unable to issue those shares. The officers agreed to not force issuance until the Company’s shareholders authorized additional capital. At the Company’s annual meeting in January, 2008, the shareholders increased the authorized capital to 500,000,000 shares of common stock. At December 31, 2007 and December 31, 2006, the following common stock shares were payable to the following parties:

Common December 31, December 31,
Shares 2007 2006

Bill Gaines 1,000,000 $120,000 $ 0
David LeClere 507,000 60,840 17,238
Timothy G. Byrd, Sr 5,000,000 300,000 170,000
Sonny Wooley 7,000,000 540,000 238,000
Peggy Behrens 750,000 90,000 25,500

Total 14,257,000 $1,290,840 $450,738

Plus I believe there are 3,000,000 warrants that Mr Byrd and Mr Wooley could still exercise.

NOTE 14 - STOCK OPTIONS / STOCK WARRANTS

The Company’s employment agreement with Mr. Byrd and Mr. Wooley provide that they will be paid a salary of $156,000 per year. However, during 2003 - 2006, Mr. Byrd’s and Wooley’s salaries accrued but were not paid due to the Company’s severe cash flow problems. Mr. Byrd and Wooley may require the Company to pay the accrued amounts at any time.

In 2006, Mr. Byrd and Wooley each elected to convert a portion of their accrued salaries into Adino stock. As a result, the Company agreed to issue Mr. Byrd and Mr. Wooley 5,000,000 shares each of common stock. On April 13, 2007, they each exercised and were issued 2,500,000 shares of common stock. The remaining shares of common stock to be issued are reflected in our stock payable liability at December 31, 2007.

On April 3, 2007, Mr. Byrd and Mr. Wooley again elected to and the board approved conversion of part of their accrued salaries into Adino stock options. To that end, the Company issued 12,000,000 stock options to each officer to purchase 12,000,000 shares of Adino stock for an exercise price of $0.03 cents per share. Each officer relinquished $100,000 of accrued compensation for the options. Using the Black-Scholes valuation model, and an expected life of two years, volatility of 262%, and a discount rate of 4.57% the Company has determined the aggregate value of the 24,000,000 five year warrants to be $717,412. As the warrants are fully purchased and vested, this resulted in a net expense to the Company of $517,412 (after considering the $200,000 already accrued). Subsequently, on November 10, 2007, both Mr. Byrd and Mr. Wooley relinquished and returned to Adino 9,000,000 warrants, each. The total reduction in authorized but outstanding shares of 18,000,000, resulted in reinstatement of $75,000 of accrued compensation to each officer and reduction of consulting expense of $538,059, or 75% of the original expense to the Company.

The Company awarded Ms. Behrens 750,000 shares of restricted stock for her service as a director in 2004, 2005 and 2006. None of these shares have actually been issued to her, however. This resulted in an accrued expense of $90,000 at December 31,2007 and $25,500 at December 31,2006 for these shares based upon the fair market value of the shares the balance sheet date and is reflected in our stock payable liability at December 31, 2007.

I was happy to see only 17M shares due our mgmt, etc as last year it was listed at 33.6M. We'll see when and if they issue these shares to our management or how they go about compensating everyone now that we approved an A/S of 500M.

As of December 31, 2007, Adino has 49,544,226 shares outstanding. There are 17,257,000 potential common shares or equivalents authorized for issuance to officers, directors and others. All parties have signed an agreement not to force Adino to issue more shares than those that are authorized. Adino only has 50,000,000 shares authorized in its Articles of Incorporation, as of December 31, 2007. It cannot legally issue more shares than the total number authorized by the Articles of Incorporation. Therefore, for purposes of the above calculation, it is assumed that all of Adino’s authorized shares (50,000,000) are outstanding, rather than the full 66,801,226 that are committed. If the full committed amount were used, the Diluted EPS would be (0.02).

http://www.sec.gov/Archives/edgar/data/700815/000113717108000407/adino10ksba042208.htm