X0202 4 2006-05-12 0 0001069249 House of Taylor Jewelry, Inc. hotj 0001328692 Interplanet Productions, Ltd. 1990 SOUTH BUNDY DRIVE, SUITE 700 LOS ANGELES CA 90025 0 0 1 0 Common stock 14000000 D Senior Secured Convertible Notes 4 2006-05-12 4 P 0 125000 A 2006-05-12 2009-05-12 Common stock 31250 125000 D Series A Warrant - Right to Buy Common Stock 5 2006-05-12 4 P 0 23438 A 2006-11-12 2011-05-11 Common stock 23438 23438 D All of the shares are held directly by Interplanet Productions, Ltd., which is controlled by Elizabeth Taylor as the sole stockholder. Elizabeth Taylor is the indirect beneficial owner of the reported securities. The conversion price for the Senior Secured Convertible Note (the "Note") is subject to adjustment for certain dilutive issuances of common stock or securities exercisable or convertible into common stock. The Note is generally convertible into shares of common stock at any time at the option of the Reporting Person, provided, however, the Reporting Person has agreed not to convert the Note at a price which is lower than the closing price of the Issuer's common stock on May 12, 2006 until after the Issuer has obtained stockholder approval of the Transaction (as defined in Note 6 below). The Issuer may require the Reporting Person to convert the Note after the SEC has declared effective a registration statement with respect to the shares of common stock issuable upon conversion of the Note if certain conditions specified in the Note are satisfied (a "Mandatory Conversion") Represents the number of shares issuable upon conversion of the principal amount of the Note ($125,000) based on the initial conversion price of $4 per share. Interest on the Note is payable quarterly commencing July 2006 and may, at the option of the Issuer if certain conditions specified in the Note are satisfied, be paid by the Issuer in shares of its common stock. The Note and Warrant were issued as part of the Issuer's sale of senior, secured convertible notes and warrants to institutional and other accredited investors (the "Transaction"), including the Reporting Person, with each investor paying $1.00 for each $1.00 of principal amount of notes and related warrants. Pursuant to the Transaction, the Reporting Person also received a Series B Warrant and a Series C Warrant (collectively, the "Additional Warrants") to purchase up to 10,156 and 20,313 shares of common stock, respectively. The Additional Warrants are not initially exercisable and only become exercisable upon the occurrence of one or more Mandatory Conversions exercised by the Issuer. The exercise price of the Additional Warrants will not be fixed until the Issuer's discretionary exercise of a Mandatory Conversion based on a formula set forth in the Additional Warrants. Pursuant to Rule 16a-1(c)(6) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the SEC's interpretations thereof, the Additional Warrants are not deemed to be a "derivative security" for purposes of Section 16 of the Exchange Act until the exercise price becomes fixed and the material conditions creating the right of the Reporting Person to exercise the Additional Warrants are satisfied. The exercise price of the Warrant is subject to adjustment for certain dilutive issuances of common stock or securities exercisable or convertible into common stock. Jason Winters, President 2006-05-16 Thomas Hoberman, Attorney-in-Fac 2006-05-16