Florida companies face SEC probe

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THE CROSS ATLANTIC WRAP-AROUND AGREEMENTS

27. Cross Atlantic entered into wrap-around agreements with K&L in April May and July 2008, and with Signature Worldwide in April 2008.

28. Under the agreements, certain officers of Cross Atlantic assigned to K&L and Signature Worldwide alleged debts they were owed by Cross Atlantic for past services rendered. As consideration for the purported debt assignments, K&L and Signature Worldwide agreed to pay those officers and employees an amount equal to the alleged debts. Thereafter, pursuant to the terms of those notes, K&L and Signature Worldwide paid Cross Atlantic, respectively, about $226,704 and $31,210.

29. The agreements contained convertibility provisions under which K&L and Signature Worldwide could convert the debts that Cross Atlantic allegedly owed them into shares of stock. Shortly after the agreements were signed, K&L and Signature sent Cross Atlantic a series of conversion requests; Cross Atlantic issued more than 1.4 billion shares to K&L and more than 74 million shares to Signature Worldwide.

30. Within about six weeks of receiving Cross Atlantic stock, K&L and Signature Worldwide each resold the stock into the public market. All told, the sales comprised about 37% of the outstanding, publicly available shares of Cross Atlantic.
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09/24/2009 1 COMPLAINT against all defendants filed by United States Securities and Exchange Commission. (Attachments: # 1 Civil Cover Sheet)(LAK) (Entered: 09/24/2009)
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