Subaye, Inc (SBAY)

[morokoy]

From the recent BONU 10K - seems like Crane could not even correctly complete an SEC form. "Mr. Crane has also indicated to us that the information he filed on his Form 3 may have been incorrect or incomplete."

ITEM 3. LEGAL PROCEEDINGS

On October 1, 2009, the SEC issued a formal order of investigation to us regarding possible securities laws violations by us and other persons. The investigation concerns the process by which we became a publicly traded entity, trading in our shares, and disclosure and promotion of developments in our business. The SEC has requested that we deliver certain documents to the SEC. We have, and will continue to, fully cooperate with the SEC with respect to its investigation.
.....
......
Our former chief financial officer, James Crane, has asserted that he is entitled to up to 147,210 shares of common stock pursuant to the terms of that certain Consulting Agreement, dated May 20, 2009, between the Company and James Crane (the “Crane Consultant Agreement”). We assert that Mr. Crane is not entitled to any additional shares of common stock pursuant to the Crane Consulting Agreement or any other arrangement.

Unregistered Sales of Equity Securities.

In January 2009, we issued 82,585 shares valued at $82,585 to James Crane, our former Chief Financial Officer in payment for services performed and for $10,000 in expenses incurred by the former Chief Financial Officer. In June 2009, we issued 450,000 shares valued at $295,200 for past services and future services to be performed.

James Crane Matter

The Company's former chief financial officer, James Crane, has asserted that he is entitled to up to 147,210 shares of common stock pursuant to the terms of that certain Consulting Agreement, dated May 20, 2009, between the Company and James Crane (the "Consulting Agreement"). The Company asserts that Mr. Crane is not entitled to any additional shares of common stock pursuant to the Consulting Agreement or any other arrangement.If the Company is not successful in its assertion, the Company may be required to issue the shares to Mr. Crane. The corresponding charge has not been accrued for in the financial statements.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers, directors and persons who own more than 10% of a registered class of our equity securities to file statements on Form 3, Form 4 and Form 5 of ownership and changes in ownership with the SEC. Officers, directors and greater than 10% shareholders are required by the regulation to furnish us with copies of all Section 16(a) reports that they file.

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us during the fiscal year ended October 31, 2009 and Forms 5 and amendments thereto furnished to us with respect to the fiscal year ended October 31, 2009, we have determined that none of the parties subject to the reporting requirements of Section 16(a) filed the required reports during and with respect to the fiscal year ended October 31, 2009, with the exception of a late filing by James Crane, our former Chief Financial Officer, who filed a Form 3 in connection with his appointment as an executive officer on January 29, 2009, approximately five months after the date such Form 3 was due. Mr. Crane has also indicated to us that the information he filed on his Form 3 may have been incorrect or incomplete.