Verges may not be the CEO anymore, but his hands are deeply entrenched in the company. So are James Tilton's.
Look, all I'm saying is that this is good play for a couple of ticks. Not something to hold onto. Additionally, look at what Tilton and Verges did with the big CCTR/NUBL acquisition that was going to happen and then never did.
In regards to James Tilton:
On April 1, 2010, June 30, 2010, September 30, 2010, December 31, 2010 and March 31, 2011, the Company converted a total of $105,000 in accrued salaries due to Jim Tilton, the Company’s Chief Operating Officer for convertible notes in the same principal amount, due on March 31, 2011, December 31, 2010, March 31, 2011, June 30, 2011 and December 31, 2011, respectively. The notes accrue interest at 8% per annum. Principal and accrued and unpaid interest on the notes are convertible into shares of common stock at a conversion price of 50% of the closing bid price of common stock on the date of the notice of conversion. Of these notes, $30,000 came due on March 31, 2011 and is currently past due.
In regards to Phillip Verges:
On December 10, 2010, the Company entered into a share exchange agreement with Savanna East Africa Limited (“SEA Kenya”) and Beachhead, LLC (the “Shareholder”). The managing director of the Shareholder is Philip Verges, who was at time the Company’s chief executive officer. Pursuant to the exchange agreement, the Company issued 100,000 shares of Series A Preferred Stock to the Shareholder in exchange for 70,000 ordinary shares of SEA Kenya held by the Shareholder, which 70,000 ordinary shares represents 70% of the outstanding capital stock of SEA Kenya. In connection with the exchange agreement, the Company filed a certificate of designation of Series A Preferred Stock. Pursuant to the certificate of designation:
100,000 shares were designated as Series A Preferred Stock.
Holders of the Series A Preferred Stock will be entitled to receive $1.00 per share of Series A Preferred Stock, prior to any distribution to holders of common stock, in the event of any liquidation, dissolution or winding up of the Company.
Holders of Series A Preferred Stock will be entitled to receive dividends in the amount of 51% of net operating income, payable quarterly.
Holders of Series A Preferred Stock will own 51% of the voting power of the shareholders of the Company.
The Company may not redeem shares of Series A Preferred Stock without the written consent of the holders thereof.
On April 26, 2010, the Company purchased certain oil drilling equipment for $397,500, financed by issuing a promissory note payable. Of this balance, $175,000 was assumed by Phillip Verges, the Company’s then Chief Executive Officer. The note bears interest at 5% per annum and mature on April 26, 2013. Any unpaid amounts after the maturity date will accrue interest at 21% per annum. A balance of $297,500 was outstanding at March 31, 2011.
On December 10, 2010, the Company entered into a share exchange agreement with Savanna East Africa Limited (“SEA Kenya”) and Beachhead, LLC (the “Shareholder”). The managing director of the Shareholder is Philip Verges, who was at time the Company’s chief executive officer. Pursuant to the exchange agreement, the Company issued 100,000 shares of Series A Preferred Stock to the Shareholder in exchange for 70,000 ordinary shares of SEA Kenya held by the Shareholder, which 70,000 ordinary shares represents 70% of the outstanding capital stock of SEA Kenya.
On June 3, 2010, the Company received $300,000 from companies majority-owned by Phillip Verges, the Company’s then CEO. The amount has been classified as an advance payable – related party in the accompanying balance sheets at March 31, 2011 and June 30, 2010, until such time that the advance is memorialized into a note. The Company received the advance to fund its working capital. The advance currently bears no interest, does not mature, and is unsecured.
The Company’s subsidiary incurred expenses paid for by NewMarket Technology, Inc., a company whose Founder and Chairman of the Board of Directors is Phillip Verges, the Company’s former Chief Executive Officer. As of March 31, 2011, the balance owed to NewMarket Technology, Inc. in the accompanying consolidated balance sheet is $495,849, and has been classified as amounts due to related parties.
AI
