JMIH, Upon further review, it looks like shares were issued to the CEO for his services. This transaction is confusing. Does this mean his bonuses were paid in stock rather than cash?
"On January 13, 2005 the Company agreed to issue its chief executive officer an aggregate of 454,773 shares of its common stock in consideration of its chief executive officer providing personal guarantees for the Company. Such guarantees were required to secure lines of credit up to $700,000.
In addition, on January 13, 2005 the Company issued an aggregate of 209,351 shares of its common stock to its chief executive officer and chief financial officer as payment of bonuses earned pursuant to their respective employment agreements during the fiscal year ended July 31, 2004. Such bonuses had been accrued since the end of the fiscal year ended July 31, 2004. The executive officers agreed to receive the shares of stock in lieu of cash. The bonus payable to the Company's chief executive officer was $27,927.45 and the bonus payable to the Company's chief financial officer was $13,963.73.
The shares were issued under the exemption from registration provided by Section 4(2) of the Securities Act. The shares contain the appropriate legends restricting their transferability absent registration or applicable exemption."
