This is the kind of thing that really is bothering many I have spoken to.
"During October, 2009, Mr. Wittenburg, a former officer and director acquired 5,000,000 shares of our restricted common stock in consideration of $50,000.
During October, 2009, Mr. Dillon, a former officer and director acquired 3,500,000 shares of our restricted common stock in consideration of $35,000."
Definition:
Consideration is the legal concept of value in connection with contracts. It is anything of value in the common sense, promised to another when making a contract. It can take the form of money, physical objects, services, promised actions, or even abstinence from a future action. If either promisee already had a legal obligation to render such payment, it cannot be seen as consideration in the legal sense.
In common law consideration it is a prerequisite that both parties offer some consideration before a contract can be thought of as binding.
However, even if a court decides there is no contract, there might be a possible recovery under Quantum meruit (sometimes referred to as a Quasi-contract) or promissory estoppel.
So basically they may not have done anything but made a future promise to possibly due something and got shares anyway for nothing.
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