additionally, Section 3 – Securities and Trading Markets...
Item 3.02 Unregistered Sales of Equity Securities
As of December 20, 2006, we sold a total of 1,000,000 shares of our restricted common stock to two accredited investors (500,000 shares, respectively) at a price of $2.00 per share for a total of $2,000,000. On December 18, 2006, we issued 500,000 shares to one of the investors and are in the process of issuing the remaining 500,000 shares. In connection with the sale, we agreed to pay Hudson Capital Corporation a cash fee of $150,000 and issue Hudson Capital Corporation 75,000 shares of our restricted common stock.
We believe that the sale of the shares was exempt from registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Sections 4(2), and/or Regulation D, Rule 506. The shares were sold directly by us to accredited investors and did not involve a public offering or general solicitation. The purchasers of the shares were afforded an opportunity for effective access to files and records of our company that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the purchasers, immediately prior to selling the shares, had such knowledge and experience in our financial and business matters that they were capable of evaluating the merits and risks of their investment. The purchasers had the opportunity to speak with our management on several occasions prior to their investment decision.
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