UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 26, 2001
MONOGRAM PICTURES, INC.
(Exact name of registrant as specified in its charter)
Nevada 000-20598 75-2293489
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
120 St. Croix Avenue, Cocoa Beach, Florida 32931
(Address of principal executive offices Zip Code)
Registrant's telephone number, including area code: 321-799-3842
NOT APPLICABLE
(Former name or former address, if changed since last report)
Item 1. Changes in Control of Registrant.
On November 28, 2001, the Board of Directors of the Registrant approved
the issuance of an aggregate 8,000,000 shares of its common stock, $.001
par value, to two persons who, on such date, have been appointed members of
the Board of Directors of the Registrant. Such persons are Thomas W.
Kearney and Lee Mullineaux. The 8,000,000 shares will be issued in the
amount of 4,000,000 shares each to Thomas W. Kearney and Lee Mullineaux and
constitute compensation for past, present and future services of such
persons to the Registrant and, in part, arising out of a certain Letter of
Intent which has been entered into between the Registrant and A.S.K.
Consulting, Inc. under dated of November 19, 2001 (the "Letter of Intent").
Immediately preceding the issuance of the 8,000,000 shares of the
Registrant's common stock to Messrs. Kearney and Mullineaux as described in
the immediately preceding paragraph, there were outstanding 7,150,286
shares of the Registrant's common stock. As a result of the foregoing-
described issuance, there are now outstanding 15,150,286 shares of the
Registrant's common stock, 4,000,000 shares of which are each held of
record and beneficially by Mr. Kearney and Mr. Mullineaux. The percentage
of ownership vested in Mr. Kearney is 26.4%, with the same percentage of
ownership (26.4%) being vested in Mr. Mullineaux. With respect to matter
submitted by the Registrant to its voting security holders for vote,
Messrs. Kearney and Mullineaux may be reasonably expected to vote in
concert.
The Letter of Intent between the Registrant and A.S.K. Consulting, Inc.
("ASK") relates to an anticipated business combination between the
Registrant and a target entity to be identified by ASK during the near
future time. The business combination transaction anticipated to be
entered into between the Registrant and such target entity ("Target") is
anticipated to result in the Registrant having outstanding 9,900,000 shares
of its common stock, 9,500,000 of which are anticipated to be held of
record and beneficially by the then present shareholders of Target and
possibly other persons designated by ASK which shall constitute 95% of the
shares of common stock of the Registrant then outstanding. The balance of
400,000 shares of the Registrant's common stock is anticipated to be held
by the record and beneficial holders of the Registrant as of a time
contemporaneous to the consummation of the business combination. The
9,500,000 shares are expected to constitute Restricted Securities as that
term is utilized under the Securities Act of 1933, as amended.
Additionally, such issuance transaction is expected to constitute an exempt
transaction from the registration requirements of the Act.
The Letter of Intent contains certain anti-dilutive provisions
indicating, in summary, that the then present holders of the outstanding
common stock of the Registrant at the conclusion of the anticipated
business combination transaction will own of record and beneficially not
less than four percent (4%) of the shares of the Registrant's common stock
outstanding immediately subsequent to the consummation of the business
combination transaction. Such anti-dilutive provisions shall be effective
for a period of twelve months from the date of any definitive agreement
which governs the business combination transaction between the Registrant
and Target.
The Registrant presently has a wholly owned subsidiary known as Medical
Discounts, Ltd. ("Medical"). Medical is a Florida corporation which
engages in the providing of medical and related services on a membership
basis. In accordance with the Letter of Intent, the Registrant and Medical
are required to take all appropriate and necessary steps to permit the
distribution of substantially all of the common stock of Medical owned by
the Registrant to the present holders of the outstanding common stock of
the Registrant. Such distribution is required to be accomplished in
accordance with a Registration Statement to be filed under the Securities
Act of 1933, as amended, which Registration Statement will contain a form
of prospectus. Prior and subsequent to such anticipated distribution,
Medical will continue to conduct its present business under its present
management. In connection with the intended distribution of the Medical
common stock,. ASK is required under the Letter of Intent to facilitate the
purchase by the Registrant of that number of shares of Medical common stock
which will equal five percent (5%) of the number of shares of common stock
to be outstanding at the conclusion of the distribution. The number of
shares of Medical's common stock anticipated to be involved in such
acquisition is 50,000 shares for an aggregate purchase price to be paid by
the Registrant to Medical of $135,000. Such proceeds, upon receipt by
Medical, are anticipated to be used to defray the costs of the distribution
described in the immediately preceding paragraph and in connection with the
business of Medical.
With respect to such $135,000 amount, ASK was required to remit, on or
before November 30, 2001, the amount of $10,000 to Medical. On or before
December 22, 2001, ASK shall remit the amount of $10,000 to Medical.
During January 2002, ASK shall remit to legal counsel engaged by ASK the
amount of $20,000 which is intended to provide for and defray the legal
fees to be incurred by Medical in connection with the preparation, filing
and processing to effectiveness of the Registration Statement relating to
the distribution of Medical's common stock described above. On or before
February 15, 2002, ASK shall provide to Medical the balance of such
$135,000 which is $95,000. With respect to the final remittance of $95,000
to be made by ASK to Medical, a 15-day payment grace period is allowed.
The $135,000 obligation of ASK to the Registrant and Medical is evidenced
by a promissory note given by ASK.
The Letter of Intent further provides that the presently outstanding
47,500 shares of preferred stock of the Registrant will be redeemed or
canceled prior to the time that a definitive agreement is entered into
between the Registrant and Target.
The Letter of Intent also provides that ASK will develop a capital
formation plan which will involve proceeds in the minimum amount of
$135,000 and in maximum amount of $1,000,000. Such proceeds will be
utilized to facilitate the transactions provided for and contemplated by
the Letter of Intent. Such capital formation activity is primarily
described in Section 5 of the Letter of Intent which is included with this
Form 8-K Report as an Exhibit. The capital formation plan may utilize
common stock of the Registrant which is presently outstanding or authorized
but unissued shares of the Registrant's common stock. The capital
formation plan and activity must result in proceeds of $135,000 as of the
close of business on March 2, 2002 in order for the other contemplated
transactions described in the Letter of Intent to go forward.
As reported in Item 6. Resignation of Registrant's Directors. set forth
below, the composition of the Board of Directors of the Registrant shall be
changed so that the members thereof will be Steven Swank (presently a
member of the Board of Directors), Thomas W. Kearney and Lee Mullineaux.
Messrs. Kearney and Mullineaux are shareholders and directors of ASK. In
the event that ASK does not remit the final $95,000 installment as earlier
described herein, Messrs. Kearney and Mullineaux shall resign from the
Board of Directors of the Registrant.
Item 2. Acquisition or Disposition of Assets.
Pursuant to a Stock Exchange Agreement dated June 1, 2000, the Registrant
acquired all of the outstanding common stock of General Personnel
Management, Inc. ("GPM"). GPM is a California corporation and is a
Professional Employment Organization (PEO). The offices of GPM are located
in San Diego, California. The Registrant has experienced revenues as a
result of its ownership of GPM as a wholly-owned subsidiary. Pursuant to a
Stock Purchase Agreement dated October 1, 2001, the Registrant agreed to
sell all of the outstanding shares of common stock of GPM owned by the
Registrant to Oliver H. Martin. The consideration in such sale is $25,000
and the transaction, as governed by the Stock Purchase Agreement, is
subject to certain conditions. The purchaser in such transaction, Oliver
H. Martin, presently serves as President and Chief Executive Officer of
GPM.
Item 3. Bankruptcy or Receivership.
NOT APPLICABLE
Item 4. Changes in Registrant's Certifying Accountants.
NOT APPLICABLE
Item 5. Other Events and Regulation FD Disclosure.
NOT APPLICABLE
Item 6. Resignation of Registrant's Directors.
At a special meeting of the Board of Directors of the Registrant held on
November 26, 2001, Directors Charles Kiefner, David Hastings CPA and John
Bortoli submitted their resignations as members of the Board of Directors.
Such resignations were contemplated by the Letter of Intent described in
Item 1. Changes in Control of Registrant. above and did not involve any
disagreement between the Registrant and any of such resigning directors.
Such resignations were made orally. The resignations were accepted by the
remaining members of the Board of Directors of the Registrant and upon the
completion of appropriate corporate action, Thomas W. Kearney and Lee
Mullineaux were appointed to file the vacancies of two of the three
positions vacated by such resignations.
Since the resignations, acceptance thereof and the appointment of two
successor directors did not involve any disagreement between the resigning
directors and the Registrant with respect to any matter relating to the
Registrant's operations, policies or practices, and since such resigning
directors did not furnish any letters or other writings reflecting their
resignations, no Exhibit is included with this Form 8-K.
Item 7. Financial Statements and Exhibits.
(1) Letter of Intent dated November 19, 2001 between Registrant and A.S.K.
Consulting, Inc.
(2) Stock Purchase Agreement dated October 1, 2001 relating to the sale of
all of the outstanding common stock of General Personnel Management, Inc.
8. Change in Fiscal Year.
NOT APPLICABLE
9. Item FD Disclosure.
At the special meeting of the Board of Directors of the Registrant held
November 28, 2001 the Board of Directors took appropriate action to
relocate the administrative offices of the Registrant from their present
address which is 120 St. Croix Avenue, Cocoa Beach, Florida 32931 to a
Florida west coast location which shall be 1375 S. Ft. Harrison Avenue,
Clearwater, Florida 33756.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MONOGRAM PICTURES, INC.
By /s/ Thomas W. Kearney, CFO
Thomas W. Kearney, CFO
December 11, 2001
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