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CHANGE OF CONTROL TRANSACTION
9 Months Ended
Sep. 30, 2011
CHANGE OF CONTROL TRANSACTION 
CHANGE OF CONTROL TRANSACTION

NOTE 4 CHANGE OF CONTROL TRANSACTION


Effective May 31, 2011, the Company and certain of its shareholders (Thomas Howells, Travis Jenson, Jenson Services, Inc. and Kelly Trimble, collectively, the "Principal Shareholders") entered into a Stock Purchase Agreement dated as of May 27, 2011 ("SPA") with Safe Communications, Inc., a Texas corporation ("Buyer") under which the Buyer purchased for a $250,000 cash payment 10,000,000 shares of the Company's common stock, representing 80% of the issued and outstanding common stock after giving effect to the purchase transaction.  In addition, under the SPA, if the Buyer does not complete certain transactions within the time period prescribed by the SPA, the Buyer is obligated to pay the Company an additional $50,000 in cash.


 Effective May 31, 2011, the Company also entered into a Principal Shareholders Agreement with each of the Principal Shareholders dated as of May 27, 2011 ("PSA"), under which the Company agreed make payments to the Principal shareholders in the aggregate amount of $250,000, in consideration of the Principal Shareholders' undertakings in the SPA, including but not limited to their agreement to indemnify the Buyer in connection with the stock purchase contemplated in the SPA.  If the Buyer is required to make the additional $50,000 payment referenced above, then the Company is required to pay such additional $50,000 to the Principal Shareholders in accordance with the PSA.  Each of the Principal Shareholders is a significant shareholder of the Company, and, in addition, at the time of execution of the PSA, Messrs. Howells, Bassham and Jenson were directors of the Company, Mr. Howells was President and Mr. Bassham was Treasurer and Secretary.


In connection with the closing of the transactions contemplated by the SPA, effective May 31, 2011, Travis Jenson resigned as President and Director of the Company,  Thomas Howells resigned as a director of the Company and Wayne Bassham resigned as Treasurer and secretary of the Company. Mr. Bassham also tendered his resignation as a director of the Company, effective ten days after the Company's mailing to its shareholders of an Information Statement on Schedule 14F-1.  John P. Venners, President of the Buyer, was appointed interim President and a director of the Company, effective May 31, 2010.  Mr. Venners was appointed an officer and director of the Company by Wayne Bassham, following the resignations of Messrs. Howells and Jenson, all as required by the SPA.  

 

In connection with the closing of the stock purchase under the SPA, the Buyer obtained control of the Company by acquiring 80% of the Company's issued and outstanding common stock and by having its designee, John P. Venners, President of the Buyer, appointed interim President and a director of the Company.