The company claims in the below link to their 10K that the tape business revenue financed Javaco, Pakit, and P2O. Can someone please show me any evidence that this actually occured? The tape business was a huge money loser. How could it have financed these multi-million dollar purchases?
I think you are taking that quote a little out of context. In that same filing, the company identified what was used for the Javaco and Pak-It acquisitions. On pages 19-20:
Javaco Acquisition
On August 24, 2009, the Company and Domark International, Inc. (“Domark”) closed a Securities Purchase Agreement whereby the Company purchased 100% of the issued and outstanding common shares of Javaco, Inc. (“Javaco”), a wholly owned subsidiary of Domark, in exchange for $150,000 and the issuance of 2,500,000 shares of the Company’s common stock to Domark.
In connection with the Agreement, Domark has also assigned $9,997,134 of media credits in print and radio to the Company in exchange for the issuance of 1,000,000 shares of the Company’s common stock.
. . . .
Pak-It Acquisition
On September 30, 2009, 310 Holdings, Inc. (the “Company”) entered into a Unit Purchase and Exchange Agreement (the “Agreement”) with Pak-It, LLC, a Florida limited liability company (“Pak-It”) and the Pak-It, LLC unitholders (the “Pak-It Unitholders”).
Pursuant to the Agreement, the Company acquired 100% of the issued and outstanding membership units and all of the assets of Pak-It including Pak-It’s wholly owned subsidiary Dickler Chemical Laboratories, Inc., in exchange for the issuance of 625,000 shares of the Company’s common stock and the issuance of two secured promissory notes. Pursuant to a loan agreement (the “Loan Agreement”), the Company issued a secured promissory note to a trustee in the amount of One Million Two Hundred
Thousand Dollars ($1,200,000) which is due on December 29, 2009 with a 10% interest rate (the “Note”). In addition, the Company has assumed and will satisfy certain liabilities of Pak-It by issuing a note in the amount of Two Million Six Hundred Sixty Five Thousand Dollars ($2,665,000) due on December 29, 2009 with a 10% interest rate (the “Liability Note”) collectively the Note and Liability Note are referred to as the “Notes”.
The Company’s Chief Executive Officer, John Bordynuik and the Company have entered into a Pledge Escrow Agreement (the “Pledge”), whereby Mr. Bordynuik has pledged 10,000,000 shares of his holdings in the Company’s common stock and the Company has pledged 100% of the issued and outstanding membership units of Pak-It, LLC as collateral for the Notes. In addition, the Notes are secured by security agreements (the “Security Agreements”) against (i) the accounts, general intangibles and contract rights; (ii) the inventory; and (iii) the equipment of Pak-It.
I do think the language you quoted could have been phrased better though (perhaps stating that the revenue was used toward the purchases at issue, rather than "to finance").
