FNDS 3000 Corp (FDTC)

[timhyma]

FDTC 10-Q is out:

As of January 14, 2011, the Company had outstanding 75,387,591 shares of its common stock. Looks like they issues about 6.5mil shares since August.

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7658603-1038-174014&type=sect&dcn=0001193125-11-008398

Tangable book is around .02

Looks like they lost a penny on the quarter. Most that loss is due to three things:
Processing, technical and financial expense
Salaries and benefits expense
Professional and consultant expense

82% of the operating expenses right there- they need to get that under control asap, imo.

I sure hope they are done with Dodak and Fann for good- they sucked the blood out of this compeny, imo:

Note 10 – Related Party Transactions
Consulting Fees

As a condition of the October 2008 Sherington Agreement closing, Michael Dodak and David Fann, former executive officers and directors, agreed that their employment agreements would be converted to Consulting Agreements.

On November 2, 2010, the Company entered into an Agreement and Release with Michael Dodak (the “Dodak Release”), a former director and executive officer of the Company and an existing shareholder of the Company, relating to Mr. Dodak’s contractual relationship with the Company. In accordance with the terms and conditions set forth in the Dodak Release, Mr. Dodak, in consideration for providing the Company with a full release, has agreed to accept:
• $30,000 in cash;
• 142,857 shares of the Company’s common stock, valued at $25,000 to be issued on January 4, 2011;
• shares of common stock of the Company valued at $25,000 to be issued between January 14, 2011 and February 28, 2011 with the number of shares to be calculated based on the lesser of $0.175 or the average trading price of the Company’s shares of common stock for the ten trading days prior to the date of the issuance;
• shares of common stock of the Company valued at $25,000 to be issued between April 1, 2011 and May 16, 2011 with the number of shares to be calculated based on the lesser of $0.175 or the average trading price of the Company’s shares of common stock for the ten trading days prior to the date of the issuance; and
• shares of common stock of the Company valued at $25,000 to be issued between July 1, 2011 and August 15, 2011 with the number of shares to be calculated based on the lesser of $0.175 or the average trading price of the Company’s shares of common stock for the ten trading days prior to the date of the issuance.

The Company is required to register the shares of common stock issued to Mr. Dodak on a Form S-8 Registration Statement within 45 days of the effective date of the Dodak Release, which is seven days after the execution of the Dodak Release. The Company filed a Form S-8 registration in December. Refer to Note 14 – Subsequent Events.

On November 2, 2010, the Company also entered into an Agreement and Release with David Fann (the “Fann Release”), a former officer and director of the Company and an existing shareholder of the Company relating to Mr. Fann’s contractual relationship with the Company. In accordance with the terms and conditions set forth in the Fann Release, Mr. Fann, in consideration of a full release, has agreed to accept:
• $30,000 in cash; and
• 571,429 shares of the Company’s common stock, valued at $100,000, to be issued within five business days of a Form S-8 Registration Statement being declared effective but in no event later than December 20, 2010.

The Company is required to register the shares of common stock issued to Mr. Fann on a Form S-8 Registration Statement within 45 days of the effective date of the Fann Release, which is seven days after the execution of the Fann Release.

As a result of the Settlement Agreements with Messrs. Dodak and Fann, and having paid the $60,000 cash payments as per the Agreements, the Company has recognized $200,000 of equity-based consulting expense and reduced the related combined liability reflected on its balance sheet of $301,000 to $200,000. Additionally, a non-cash discount expense of $6,400 was recognized due to the average closing price of our common stock for the ten days prior to and including November 30, 2010 of $0.19 as compared to a maximum value of $0.175 be utilized when calculating the remaining shares to be issued to Mr. Dodak. The Company will utilize the cash savings of $241,000 in connection with other working capital purposes.

Sales of Unregistered Common Stock

On October 19, 2010, the Company entered into a private placement subscription agreement (the “Sherington October 2010 Subscription Agreement”) with Sherington Holdings, LLC pursuant to which Sherington purchased 5,638,890 shares of Common Stock (the “Sherington October 2010 Shares”) at a purchase price of $0.175 per share and a warrant to purchase 5,638,890 shares of Common Stock (the “Sherington October 2010 Warrant”) for gross proceeds of $986,806.

Additionally, on October 19, 2010, the Company entered into a private placement subscription agreement (the “October 2010 Subscription Agreement”) with accredited investors (the “October 2010 Investors”) pursuant to which the October 2010 Investors purchased, in the aggregate, 75,396 shares (the “Purchased Shares”) of the Company’s Common Stock at a purchase price of $0.175 per share and a warrant, to purchase, in the aggregate, 75,396 shares of Common Stock (the “October 2010 Warrant”) for aggregate gross proceeds of $13,194. The October 2010 Investors included Raymond Goldsmith, our Chairman and Chief Executive Officer.

Details of the sale are more fully described in Note 13 – Equity Transactions.

Other Agreements

In conjunction with the October 2010 sale of stock to Sherington, the Company issued to Sherington a Fifth Amended and Restated Warrant (the “Fifth Warrant”); amending the number of shares that Sherington is entitled to from 12,412,427 shares to 9,254,360 shares and recognizing an increased fully-diluted interest in the Company from 49.98% to 55.21%. The Fifth Warrant provides that Sherington is entitled to purchase from the Company an aggregate of 9,254,360 shares of Common Stock of the Company at a price equal to $0.175 per share through December 31, 2013. Notwithstanding the foregoing, the Fifth Warrant shall only be exercisable so that Sherington may maintain its fully-diluted percentage interest in the Company of 55.21% and is only exercisable by Sherington if and when there has occurred a full or partial exercise of any derivative securities of the Company outstanding as of July 1, 2009 (but excluding the securities held by Sherington), the 4,000,000 warrants issued to Bank Julius Baer & Co. Ltd. and the 1,000,000 warrants issued to Mr. Besuchet. The exercise price of the Fifth Warrant is subject to full ratchet and anti-dilution adjustment for subsequent lower price issuances by the Company, as well as customary adjustments, provisions for stock splits, stock dividends, recapitalizations and the like.

Contemporaneously with the execution and delivery of the Sherington October 2010 Subscription Agreement, the Company and Sherington entered into Amendment No. 6 to the Registration Rights Agreement dated January 6, 2009 (the “Sixth Amendment”) whereby the Company expanded the definition of Shares (as defined in the Sixth Amendment) to include, among other things, the Sherington October 2010 Shares and the shares issuable upon the exercise of the Sherington October 2010 Warrant.

Furthermore, with the execution and delivery of the Sherington October 2010 Subscription Agreement, the Company and Sherington entered into a Commitment Agreement (the “Commitment Agreement”) dated October 19, 2010. Pursuant to the Commitment Agreement, the Company agreed to sell and Sherington agreed to commit to purchase a prescribed pro rata portion of Common Stock of the Company in a private placement. The Company plans to offer shares of the Company’s Common Stock in four tranches, the first tranche (“Tranche 1”) closed on October 19, 2010 and three additional tranches to generate proceeds of $500,000 each are to close in January 2011, April 2011 and July 2011. In addition, in the event that the aggregate funds received from accepted subscriptions of any tranche is less than the applicable tranche cap, Sherington agreed to purchase shares in an aggregate principal amount equal to, and for an aggregate purchase price of, Sherington’s call amount, as defined in the Commitment Agreement.


When you figure in all the other warrants and such- potenially o/s count could be 122mil. The authorized is 150mil, so they better be profitable this year, or sell the company, imo.