SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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):
September 13, 2004
PHASE III MEDICAL, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-10909 22-2343568
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Commission File Number IRS Employer
Identification No.
330 SOUTH SERVICE ROAD, SUITE 120, MELVILLE, NEW YORK 11747
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(Address of principal executive offices) (Zip Code)
631-574-4955
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Registrant's Telephone Number
___________________________________________
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2 below): N/A
Item 3.02. Unregistered Sales of Equity Securities.
On September 13, 2004, Phase III Medical, Inc., a Delaware corporation (the
"Company"), and Aholt, Jr. Family Trust dated 2/17/97 (the "Trust"), the trustee
of which is Robert Aholt, Jr., the Company's recently appointed Chief Operating
Officer (see below), entered into a subscription agreement (the "Subscription
Agreement"), pursuant to which the Company sold to the Trust 7,282,913 shares of
common stock, par value $0.001 per share, of the Company ("Common Stock") in
exchange for $650,000. Pursuant to the Subscription Agreement, the Company and
Mr. Aholt agreed that upon maturity of a promissory note made by the Company in
favor of Mr. Aholt on or about August 30, 2004 (the "Note"), the Company will
repay the Note in shares of Common Stock, at a per share conversion price equal
to 85% of the average of the closing price of one share of Common Stock on the
National Association of Securities Dealers, Inc. Over-the-Counter Bulletin Board
(the "Bulletin Board") for the five (5) days immediately preceding the maturity
date of the Note, or, if the Common Stock is not then traded on the Bulletin
Board, at 85% of fair market value as determined by the Board of Directors of
the Company. The Note, which was made in the principal amount of $100,000, bears
interest at a rate of 20% per annum and matures on February 28, 2005.
The offer and sale by the Company of the securities described above were
made in reliance upon the exemption from registration provided by Section 4(2)
of the Securities Act of 1933, as amended (the "Securities Act"), for
transactions by an issuer not involving a public offering. The offer and sale of
such securities were made without general solicitation or advertising and with
representations by the investors that they were "accredited investors," as such
term is defined in Rule 501(a) of Regulation D promulgated under the Securities
Act.
The description of the sale of the securities set forth in this Item 3.02
does not purport to be complete and is qualified in its entirety by reference to
the full text of the Subscription Agreement and the Note, attached hereto as
Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated by this reference.
Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
On September 15, 2004, the Company issued a press release pursuant to which
it announced the appointment of Robert Aholt, Jr. as its Chief Operating
Officer, effective as of September 13, 2004 (the "Commencement Date").
Prior to joining the Company, Mr. Aholt, 43, was Principal and Chief
Financial Officer of Systems Development, Inc., a private consulting firm
focusing on strategic and technology consulting for Fortune 500 companies. As a
co-founder of Systems Development in 1993, Mr. Aholt helped build the company
into a multi-million dollar consulting practice with clients such as Universal
Studios, Toyota, Sony and Fox Pictures. His client work included strategic and
program management on projects as large as $85 million with three-year durations
and scope covering company strategies and competitive advantages. As CFO of
Systems Development, he oversaw all financial and operational aspects of the
firm. Prior to Systems Development, Mr. Aholt was CFO of IW Communications
Group, a public relations firm that helps companies target Asian communities for
public relations outreach. Mr. Aholt has also worked as a controller of First
Affiliated Securities, a regional brokerage firm in Southern California.
On the Commencement Date, the Company entered into a letter agreement (the
"Letter Agreement") with Mr. Aholt, pursuant to which the Company appointed Mr.
Aholt as its Chief Operating Officer. Subject to the terms and conditions of the
Letter Agreement, the term of Mr. Aholt's employment in such capacity will be
for a period of three (3) years from the Commencement Date (the "Term").
In consideration for Mr. Aholt's services under the Letter Agreement, Mr.
Aholt will be entitled to receive a monthly salary of $4,000 during the first
year of the Term, $5,000 during the second year of the Term, and $6,000 during
the third year of the Term. In further consideration for Mr. Aholt's services
under the Letter Agreement, on January 1, 2005 and on the first day of each
calendar quarter thereafter during the Term, Mr. Aholt will be entitled to
receive shares of Common Stock with a "Dollar Value" of $26,750.00, $27,625.00
and $28,887.50, respectively, during the first, second and third years of the
Term. The per share price (the "Price") of each share granted to determine the
Dollar Value will be the average closing price of one share of Common Stock on
the Bulletin Board (or other similar exchange or association on which the Common
Stock is then listed or quoted) for the five (5) consecutive trading days
immediately preceding the date of grant of such shares; provided, however, that
if the Common Stock is not then listed or quoted on an exchange or association,
the Price will be the fair market value of one share of Common Stock as of the
date of grant as determined in good faith by the Board of Directors of the
Company. The number of shares of Common Stock for each quarterly grant will be
equal to the quotient of the Dollar Value divided by the Price. The shares
granted will be subject to a one year lockup as of the date of each grant.
In the event Mr. Aholt's employment is terminated prior to the end of the
Term for any reason, earned but unpaid cash compensation and unreimbursed
expenses due as of the date of such termination will be payable in full. In
addition, in the event Mr. Aholt's employment is terminated prior to the end of
the Term for any reason other than by the Company with cause, Mr. Aholt or his
executor of his last will or the duly authorized administrator of his estate, as
applicable, will be entitled (i) to receive severance payments equal to one
year's salary, paid at the same level and timing of salary as Mr. Aholt is then
receiving and (ii) to receive, during the one (1) year period following the date
of such termination, the stock grants that Mr. Aholt would have been entitled to
receive had his employment not been terminated prior to the end of the Term;
provided, however, that in the event such termination is by the Company without
cause or is upon Mr. Aholt's resignation for good reason, such severance payment
and grant shall be subject to Mr. Aholt's execution and delivery to the Company
of a release of all claims against the Company.
The description of the terms and conditions of Mr. Aholt's employment with
the Company set forth herein does not purport to be complete and is qualified in
its entirety by reference to the full text of the Letter Agreement attached
hereto as Exhibit 10.3 and incorporated by this reference. Reference is also
made to the press release issued by the Company on September 15, 2004, the text
of which is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
Exhibit 10.1. Subscription Agreement, dated September 13, 2004, between
Phase III Medical, Inc. and Aholt, Jr. Family Trust dated
2/17/97.
Exhibit 10.2. Promissory Note made by the Company in favor of Robert Aholt,
Jr.
Exhibit 10.3. Letter Agreement, dated September 13, 2004, between Phase III
Medical, Inc. and Robert Aholt, Jr.
Exhibit 99.1. Press Release dated September 15, 2004.
SIGNATURE
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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.
PHASE III MEDICAL, INC.
By: /s/ Mark Weinreb
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Mark Weinreb
President
Dated: September 16, 2004
EXHIBIT INDEX
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Exhibit Number Description
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10.1. Subscription Agreement, dated September 13, 2004, between
Phase III Medical, Inc. and Aholt, Jr. Family Trust dated
2/17/97.
10.2. Promissory Note made by the Company in favor of Robert Aholt,
Jr.
10.3. Letter Agreement, dated September 13, 2004, between Phase III
Medical, Inc. and Robert Aholt, Jr.
99.1. Press Release dated September 15, 2004.
Exhibit 10.1
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Phase III Medical, Inc.
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SUBSCRIPTION AGREEMENT
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This SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of September 13,
2004, is by and between Phase III Medical, Inc., a Delaware corporation (the
"Company"), and Aholt Jr. Family Trust dated 2/17/97 (the "Investor").
WHEREAS, the Company desires to issue and sell to the Investor, and the
Investor desires to purchase from the Company, shares of common stock, $0.001
par value per share, of the Company (the "Common Stock"), upon and subject to
the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and agreements of the parties set forth in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1. Purchase and Sale of the Shares.
1.1. Agreement to Sell and Purchase Shares. Subject to the terms and
conditions hereof, the Company agrees to issue and sell to the Investor and the
Investor agrees to purchase from the Company, at the Closing (as defined below),
an aggregate of 7,282,9131 shares of Common Stock (the "Shares"), for an
aggregate purchase price of $650,000 (the "Purchase Price"), payable in
immediately available funds at the Closing.
1.2. Delivery of Shares; Legend.
(a) As soon as reasonably practicable after the Closing, the Company shall
deliver to the Investor one or more certificates, registered in the name of the
Investor, representing the Shares. Delivery of certificates representing the
Shares shall be made against receipt by the Company of a check payable to the
order of the Company or a wire transfer of U.S. funds to an account designated
by the Company in the full amount of the Purchase Price.
(b) The certificates representing the Shares delivered pursuant to Section
1.2(a), and any securities issued in exchange for or in respect thereof, shall
bear a legend to the following effect.
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1 The aggregate number of shares shall be equal to the quotient of $650,000
divided by the Per Share Purchase Price. The Per Share Purchase Price shall be
equal to 85% of the average of the closing price of one share of Common Stock on
the NASD Over-The-Counter Bulletin Board for the five (5) days immediately
preceding the date of this Agreement. Notwithstanding the foregoing, the Per
Share Purchase Price shall not be more than $0.10 per share nor less than $0.085
per share.
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND SUCH STATE SECURITIES LAWS."
1.3. Closing. The closing (the "Closing") of the transactions contemplated
by this Agreement shall take place on the date hereof at the offices of the
Company.
1.4 Additional Purchase/Conversion of Note. The Investor has also loaned to
the Company on or about August 30, 2004 the sum of $100,000 pursuant to a six
month promissory note bearing interest at 20% per annum (the "Note"). The
Investor and the Company hereby irrevocably agree that upon the Maturity of that
Note, the Company shall repay the Note in shares of its Common Stock, at a
conversion price equal to a per share purchase price equal to 85% of the average
of the closing price of one share of Common Stock on the NASD Over-the-Counter
Bulletin Board for the five (5) days immediately preceding the Maturity Date of
the Note, or, if the Company's Common Stock is not then traded on the OTC
Bulletin Board, at 85% of fair market value as determined by the Board of
Directors of the Company.
2. Representations, Warranties and Covenants of the Investor.
2.1. Authorization; Enforceability. The Investor is (i) a bona fide
resident of the state contained in the address set forth on the signature page
as the Investor's home address, (ii) at least 21 years of age and (iii) legally
competent to execute this Agreement. This Agreement has been duly executed and
delivered by the Investor and, assuming the due authorization, execution and
delivery of this Agreement by the other party hereto, constitutes the legal,
valid and binding obligation of the Investor, enforceable against the Investor
in accordance with its terms, subject to the effects of any applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
general laws of applicability affecting creditors' rights generally and to
general equitable principles.
2.2. No Conflict. The execution, delivery and performance by the Investor
of this Agreement will not result in the violation by the Investor of any law,
statute, rule, regulation, order, writ, injunction, judgment or decree of any
court or governmental authority to or by which the Investor is bound, and will
not conflict with, or result in a breach or violation of, any of the terms or
provisions of, or constitute (with due notice or lapse of time or both) a
default under, any lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which the Investor is a party or
by which he is bound or to which any of his properties or assets is subject.
2.3. Governmental Consents. No consent, approval, authorization or other
order of any governmental authority or other third party is required to be
obtained by the Investor in connection with the authorization, execution,
delivery and performance by the Investor of this Agreement.
2.4. Investment Representations.
(a) The Investor hereby represents and warrants to the Company that the
Investor is an "accredited investor" as that term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). Specifically, the Investor certifies that (initial all
appropriate spaces on the following pages):
/s/ RA (1) The Investor is an accredited investor because he has an individual
------------- net worth, or with his spouse has a joint net worth, in excess of
(Initial) $1,000,000. For purposes of this Agreement, "net worth" means the
excess of total assets at fair market value, including home, home
furnishings and automobiles, over total liabilities.
/s/ RA (2) The Investor is an accredited investor because he has individual
-------------- income (exclusive of any income attributable to his spouse) of more
(Initial) than $200,000 in each of the past two years, or joint income with
his spouse in excess of $300,000 in each of those years, and such
investor reasonably expects to reach the same income level in the
current year.
/s/ RA (3) The Investor is an accredited investor because he is a director,
------------- executive officer or managing member of the Company.
(Initial)
(b) The Investor hereby certifies that he is not a non-resident alien for
purposes of income taxation (as such term is defined in the Internal Revenue
Code of 1986, as amended, and Income Tax Regulations). The Investor hereby
agrees that if any of the information in this Section 2.4(b) changes, the
Investor will notify the Company within 60 days thereof. The Investor
understands that the information contained in this Section 2.4(b) may be
disclosed to the Internal Revenue Service by the Company and that any false
statement contained in this Section 2.4(b) could be punished by fine,
imprisonment or both.
(c) The Investor will not sell or otherwise transfer the Shares without
registration under the Securities Act or an exemption therefrom, and fully
understands and agrees that he must bear the economic risk of his investment for
an indefinite period of time because, among other reasons, the Shares have not
been registered under the Securities Act or under the securities laws of certain
states and, therefore, cannot be resold, pledged, assigned or otherwise disposed
of unless they are subsequently registered under the Securities Act and under
applicable securities laws of such states or an exemption from such registration
is available. The Investor understands that the Company is under no obligation
to register the Shares on his behalf or to assist him in complying with any
exemption from such registration under the Securities Act, except that if any
sale proposed by the Investor is exempt from registration, the Company will
cause its counsel, at the Company's expense, to provide an appropriate opinion
to that effect to the Company's transfer agent. It also understands that sales
or transfers of the Shares are further restricted by state securities laws. The
Investor further understands that the Company is not registered as an investment
company under the Investment Company Act of 1940, as amended.
(d) The Investor acknowledges that in making a decision to subscribe for
the Shares, the Investor has relied solely upon independent investigations made
by the Investor. The Investor understands the business objectives and policies
of, and the strategies which may be pursued by, the Company. The Investor's
investment in the Shares is consistent with the investment purposes and
objectives and cash flow requirements of the Investor and will not adversely
affect the Investor's overall need for diversification and liquidity. The
Investor acknowledges that he is not subscribing pursuant hereto for any Shares
as a result of or subsequent to (a) any advertisement, article, notice or other
communications published on-line, in any newspaper, magazine or similar media or
broadcast over television or radio, or (b) any seminar or meeting whose
attendees, including the Investor, had been invited as a result of, subsequent
to or pursuant to any of the foregoing.
(e) The Investor has not reproduced, duplicated or delivered this Agreement
to any other person, except professional advisors to the Investor or as
instructed by the Company.
(f) The Investor has such knowledge and experience in financial and
business matters that the Investor is capable of evaluating the merits and risks
of the Investor's investment in the Shares and is able to bear such risks, and
has obtained, in the Investor's judgment, sufficient information from the
Company or its authorized representatives to evaluate the merits and risks of
such investment. The Investor has evaluated the risks of investing in the Shares
and has determined that the Shares is a suitable investment for the Investor.
(g) The Investor can afford a complete loss of the investment in the
Shares, can afford to hold the investment in the Shares for an indefinite period
of time, and acknowledges that distributions may be paid in cash or in kind.
(h) The Investor's overall commitment to investments that are not readily
marketable is not disproportionate to his net worth, and his investment in the
Shares will not cause such overall commitment to become excessive.
(i) The Investor has adequate means of providing for his current needs and
contingencies and has no need for liquidity in its investment in the Shares.
(j) The Investor is acquiring the Shares subscribed for herein for his own
account, for investment purposes only and not with a view to distribute or
resell such Shares in whole or in part.
(k) The Investor agrees and is aware that:
(1) the Company has a limited operating history under its
current business plan;
(2) no federal or state agency has passed upon the Shares
or made any findings or determination as to the
fairness of this investment;
(3) there are substantial risks of loss of investment
incidental to the purchase of the Shares; and
(4) the Shares cannot be resold readily because the Shares
have not been registered by the Securities and Exchange
Commission and the Shares cannot be resold without (A)
the Company's consent, which may require an effective
registration statement, or (B) an opinion of counsel
that an exemption of registration is available, and the
Investor may have to bear the risk of this investment
for an indefinite period of time.
(l) The Investor and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Shares, which have been
requested by the Investor. The Investor and his advisors, if any, have been
afforded the opportunity to ask questions of the Company and have received
complete and satisfactory answers to any such inquiries. The Investor has had
access to all additional information necessary to verify the accuracy of the
information set forth in this Agreement and any other materials furnished
herewith, and has taken all the steps necessary to evaluate the merits and risks
of an investment as proposed hereunder. Except as set forth in this Agreement,
the Company has made no representation or warranty on which the Investor has
relied to enter into this Agreement and acquire the Shares.
(m) The Investor does not have a present intention to sell the Shares nor a
present arrangement or intention to effect any distribution of any of the Shares
to or through any person or entity for purposes of selling, offering,
distributing or otherwise disposing of any of the Shares.
(n) The Investor understands that the legend set forth in Section 1.2(b),
to the effect that the Shares have not been registered under the Securities Act
or applicable state securities laws, shall be placed on the certificate
evidencing the Shares and appropriate notations to such effect will be made in
the Company's stock books.
(o) The Investor understands that the net proceeds to the Company from this
subscription will be used by the Company for general operating expenses.
2.5. Brokers. There is no broker, investment banker, financial advisor,
finder or other person which has been retained by or is authorized to act on
behalf of the Investor who is entitled to any fee or commission in connection
with the execution of this Agreement.
3. Indemnification. The Investor agrees to indemnify and hold harmless the
Company, and its managers, officers, directors, employees, agents and
shareholders, and each other person, if any, who controls or is controlled by,
within the meaning of Section 15 of the Securities Act, any thereof, against any
and all loss, liability, claim, damage, cost and expense whatsoever (including,
but not limited to, legal fees and disbursements and any and all other expenses
whatsoever incurred in investigating, preparing for or defending against any
litigation, arbitration proceeding, or other action or proceeding, commenced or
threatened, or any claim whatsoever) arising out of or in connection with, or
based upon or resulting from, (a) any false representation or warranty or breach
or failure by the Investor to comply with any covenant or agreement made by the
Investor in this Agreement or in any other document furnished by the Investor to
any of the foregoing in connection with this transaction or (b) any action for
securities law violations instituted by the Investor which is finally resolved
by judgment against the Investor.
4. Power of Attorney. The Investor, as a shareholder of the Company, hereby
appoints the Company as its true and lawful representative and attorney-in-fact,
in its name, place and stead to make, execute, sign, acknowledge, swear to and
file:
(a) any Company certificate, business certificate,
fictitious name certificate, amendment thereto, or
other instrument or document of any kind necessary or
desirable to accomplish the business, purpose and
objectives of the Company, or required by any
applicable federal, state, or local or foreign law; and
(b) any and all instruments, certificates and other
documents which may be deemed necessary or desirable to
effect the winding-up and termination of the Company
(including, but not limited to, a notice of dissolution
of the Shareholder).
This power of attorney is coupled with an interest, is irrevocable, and
shall survive and shall not be affected by the subsequent death, disability,
incompetency, termination, bankruptcy, insolvency or dissolution of the
Investor; provided, however, that this power of attorney will terminate upon the
substitution of another shareholder of the Company for the Investor, upon the
withdrawal of the Investor from the Company or upon the redemption of all of the
Shares owned by the Investor.
5. Miscellaneous.
5.1. Notices. All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or when
mailed by certified or registered mail, return receipt requested and postage
prepaid, and addressed to the address of such party set forth below or to such
changed address as such party may have fixed by written notice to the other
given in accordance with this Section 5.1; provided, however, that any notice of
change of address shall be effective only upon receipt:
If to the Company:
Phase III Medical, Inc.
330 South Service Road, Suite 120
Melville, NY 11747
Attn: Mark Weinreb, President and CEO
If to the Investor:
the same address as indicated on the signature page
hereto.
5.2. Entire Agreement; Amendment. This Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them. This Agreement may be amended only by mutual
written agreement of the Company and the Investor. No course of dealing between
or among any persons having any interest in this Agreement will be deemed
effective to modify, amend or discharge any part of this Agreement or any rights
or obligations of any person under or by reason of this Agreement.
5.3. Successors and Assigns. This Agreement shall be binding upon the
Investor and his heirs, legal representatives, successors, and permitted assigns
and shall inure to the benefit of the Company and its successors and assigns.
The Investor shall not assign any of its obligations hereunder without the prior
written consent of the Company.
5.4. Governing Law. This Agreement shall be governed by and construed under
the laws of the State of New York without regard to its choice of law
provisions.
5.5. Jurisdiction. The Investor hereby irrevocably agrees that any suit,
action or proceeding with respect to this Agreement and any or all transactions
relating hereto and thereto may be brought in U.S. federal and state courts in
the State of New York. The Investor hereby irrevocably submits to the
jurisdiction of such courts with respect to any such suit, action or proceeding
and agrees and consents that service of process as provided by U.S. federal and
New York law may be made upon the Investor in any such suit, action or
proceeding brought in any of said courts, and may not claim that any such suit,
action or proceeding has been brought in an inconvenient forum. The Investor
hereby further irrevocably consents to the service of process out of any of the
aforesaid courts, in any such suit, action or proceeding, by the mailing of
copies thereof, by certified or registered mail, return receipt requested,
addressed to the Investor at the address of the Investor then appearing on the
records of the Company. Nothing contained herein shall affect the right of the
Company to commence any action, suit or proceeding or otherwise to proceed
against the Investor in any other jurisdiction or to serve process upon the
Investor in any manner permitted by any applicable law in any relevant
jurisdiction.
5.6. Additional Information and Subsequent Changes to Representations.
(a) The Company may request from time to time such information as it may
deem necessary to determine the eligibility of the Investor to hold Stock or to
enable the Company's compliance with applicable regulatory requirements or tax
status, and the Investor shall provide such information as may reasonably be
requested.
(b) The Investor agrees to notify the Company promptly if there is any
change with respect to any of the information or representations given or made
by the Company pursuant to this Agreement and to provide the Company with such
further information as the Company may reasonably require. In addition, the
Investor agrees that at any time in the future at which the Investor may acquire
additional shares of Common Stock, the Investor shall be deemed to have
reaffirmed, as of the date of such acquisition of additional shares of Common
Stock, each and every representation made by the Investor in this Agreement,
except to the extent modified in writing by the Investor and consented to by the
Company.
5.7. Severability. In the event that any provision of this Agreement or the
application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless the provision held
invalid shall substantially impair the benefit of the remaining portion of this
Agreement.
5.8. Headings. The headings of the sections hereof are inserted as a matter
of convenience and for reference only and in no way define, limit or describe
the scope of this Agreement or the meaning of any provision hereof.
5.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement. A facsimile transmission of this signed Agreement shall be legal and
binding on all parties hereto to the same extent as if delivered personally.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above under penalties of perjury.
COMPANY:
PHASE III MEDICAL, INC.
By: /s/ Mark Weinreb
--------------------
Name: Mark Weinreb
Title: President
INVESTOR:
/s/ Rober Aholt, Jr.
--------------------
Robert Aholt, Jr. Trustee
Aholt Jr. Family Trust dated 2/17/97
Address: 20128 Cavern Court
Saugus, California 91390
Tax I.D. Number:
Exhibit 10.2
THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THE NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MUST BE HELD
INDEFINITELY and MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT
IS SUBSEQUENTLY REGISTERED UNDER SAID ACT or, in the opinion of counsel to the
company, an exemption from registration under said act is available.
PROMISSORY NOTE
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$100,000 August 30, 2004
FOR VALUE RECEIVED, Phase III Medical, Inc., a Delaware corporation,
("Maker") promises to pay to Robert Aholt ("Payee"), in lawful money of the
United States of America, the principal sum of One Hundred Thousand Dollars
($100,000.00 ), together with interest thereon accruing at an annual rate equal
to 20%, in the manner provided below. Interest shall be calculated on the basis
of a year of 365 or 366 days, as applicable, and charged for the actual number
of days elapsed.
1. PAYMENTS
1.1 Principal and interest.
Interest on the unpaid principal amount shall be payable monthly in
arrears until the entire principal amount shall be paid in full.
All principal and accrued interest shall be paid in full on
February 28, 2005 (6 months after the date of issuance of this
Note).
1.2 Manner of Payment
All payments of principal and interest on this Note shall be
made by check at Robert Aholt, 20128 Cavern Court, Saugus,
CA, 91390, or at such other place in the United States of
America as Payee shall designate to Maker in writing. If any
payment of principal or interest on this Note is due on a
day which is not a Business Day, such payment shall be due
on the next succeeding Business Day. "Business Day" means
any day other than a Saturday, Sunday or legal holiday in
the State of New York.
1.3 Prepayment
Maker may, without premium or penalty, at any time and from time
to time, prepay all or any portion of the outstanding
principal balance due under this Note, provided that each
such prepayment is accompanied by accrued interest on the
amount of principal prepaid calculated to the date of such
prepayment.
Any partial prepayments shall be applied first to accrued interest
and then to principal.
2. DEFAULTS
2.1 Events of Default
The occurrence of any one or more of the following events with
respect to Maker shall constitute an event of default
hereunder ("Event of Default"):
(a) If Maker shall fail to pay when due any payment of principal
or interest on this Note.
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating
to insolvency or relief of debtors (a "Bankruptcy Law"),
Maker shall (i) commence a voluntary case or proceeding;
(ii) consent to the entry of an order for relief against it
in an involuntary case; (iii) consent to the appointment of
a trustee, receiver, assignee, liquidator or similar
official; (iv) make an assignment for the benefit of its
creditors; or (v) admit in writing its inability to pay its
debts as they become due.
(c) If a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that (i) is for relief
against Maker in an involuntary case; (ii) appoints of a
trustee, receiver, assignee, liquidator or similar official
for the Maker or substantially all of the Maker's
properties; or (iii) orders the liquidation of the Maker,
and in each case the order is not dismissed within 90 days.
2.2 Remedies
Upon the occurrence of an Event of Default hereunder (unless all
Events of Default have been cured or waived by Payee), Payee
may, at its option, (i) by written notice to Maker, declare
the entire unpaid principal balance of this Note, together
with all accrued interest thereon, immediately due and
payable, and (ii) exercise all and any rights and remedies
available to it under applicable law, including, without
limitation, the right to collect from maker all sums due
under this Note. Maker shall pay all reasonable costs and
expenses incurred by or on behalf of Payee in connection
with Payee's exercise of any or all of its rights and
remedies under this Note, including, without limitation,
reasonable attorneys' fees and expenses.
3. REPRESENTATIONS BY PAYEE
Payee represents and warrants to Maker as follows:
(a) Payee has received and examined all information, including
financial statements, of or concerning Maker which Payee
considers necessary to making an informed decision regarding this
Note. In addition, Payee has had the opportunity to ask questions
of, and receive answers from, the officers and agents of Maker
concerning Maker and to obtain such information, to the extent
such persons possessed the same or could acquire it without
unreasonable effort or expense, as Payee deemed necessary to
verify the accuracy of the information referred to herein.
(b) The Payee acknowledges and understands that (i) the Maker will
use the proceeds of this Note in its the establishment of new
business operations; (ii) the proceeds of this Note will not be
sufficient to provide Maker with the necessary funds to achieve
its current business plan; (iii) the Maker does not have
sufficient cash available to repay this Note; (iv) this Note will
not be guaranteed nor will it be secured by any assets of Maker
nor senior to any other indebtedness of Maker; and (v) Payee
bears the economic risk of never being repaid on this Promissory
Note.
(c) The Payee hereby certifies that Payee is an "Accredited Investor"
(as that term is defined by Regulation D under the Securities Act
of 1933, as amended) because at least one of the following
statements is applicable to Payee:
(i) Payee is an Accredited Investor because the Payee had
individual income of more than $200,000 in each of the two
prior calendar years and reasonably expects to have
individual income in excess of $200,000 during the current
calendar year.
(ii) The Payee is an Accredited Investor because the Payee and
his spouse together had income of more than $300,000 in each
of the two prior calendar years and reasonably expect to
have joint income in excess of $300,000 during the current
calendar year.
(iii) The Payee is an Accredited Investor because the Payee has
an individual net worth, or the Payee and his spouse have a
joint net worth of more than $1,000,000.
(d) Payee is acquiring this Note for his own account, for investment
purposes only, and not with a view to the resale or distribution
of all or any part thereof.
(e) Payee acknowledges that this Note (i) has not been registered
under applicable securities laws, (ii) will be a "restricted
security" as defined in applicable securities laws, (iii) has
been issued in reliance on the statutory exemptions from
registration contemplated by applicable securities laws based (in
part) on the accuracy of Payee's representations contained
herein, and (iv) will not be transferable without registration
under applicable securities laws, unless an exemption from such
registration requirements is available.
(f) Payee has reviewed and understands Maker's (i) Annual Report on
Form 10-K for the fiscal year ended December 31, 2003; (ii)
Quarterly Reports on Form10-Q for the quarters ended March 31,
June 30, September 30, 2003, and March 31, June 30, 2004; (iii)
proxy statement for its 2003 annual meeting of shareholders and
(iv) all Current Report on Form 8-K filed since the filing of its
last Form 10-K.
4. MISCELLANEOUS
4.1 Waiver
The rights and remedies of Payee under this Note shall be
cumulative and not alternative. No waiver by Payee of any
right or remedy under this Note shall be effective unless it
is in writing and signed by Payee. Neither the failure nor
any delay in exercising any right, power or privilege under
this Note will operate as a waiver of such right, power or
privilege and no single or partial exercise of any such
right, power or privilege by Payee will preclude any other
or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. To the
maximum amount permitted by applicable law, (i) no claim or
right of Payee arising out of this Note can be discharged by
Payee, in whole or in part, by a waiver or renunciation of
the claim or right unless in a writing, signed by Payee; (b)
no waiver that may be given by Payee will be applicable
except in the specific instance for which it is given; and
(c) no notice to or demand on Maker will be deemed to be a
waiver of any obligation of Maker or of the right of Payee
to take further action without notice or demand as provided
in this Note.
Maker acknowledges that this Note and Maker's obligations under
this Note are, and shall at all times continue to be,
absolute and unconditional in all respects, and shall at all
times be valid and enforceable. To the extent permitted by
applicable law, Maker hereby absolutely, unconditionally and
irrevocably forever waives any and all right to assert any
defense, set-off, off-set, counterclaim, cross-claim, or
claim of any nature whatsoever with respect to this Note or
Maker's obligations hereunder.
4.2 Notices
Any notice or communication to be given hereunder by any party,
to the other party shall be in writing and shall be deemed
to have been given when personally delivered, or one day
after the date sent by recognized overnight courier or
transmitted by facsimile, which transmission by facsimile
has been confirmed or 3 (three) days after the date sent by
registered or certified mail, postage prepaid, as follows:
If to Maker, addressed to it at:
Phase III Medical, Inc.
330 South Service Road
Suite 120
Melville, NY 11747
Attn: Mark Weinreb
Facsimile Number: (631) 574 4956
If to Payee, addressed to:
Name: Robert Aholt
Address: 20128 Cavern Court
Saugus, CA 91390
Or persons or addresses as may be designated in writing by the
party to receive such notice.
4.3 Severability
If any provision of this Note is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions
of this Note will remain in full force and effect. Any
provision of this Note held invalid or unenforceable only in
part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
4.4 Governing Law.
This Promissory Note will be governed by the laws of the State of
New York without regard to conflicts of laws principles.
4.5 Assignment; Parties in Interest
This Note shall bind Maker and its successors and assigns. This
Note shall not be assigned or transferred by Maker, without
the express prior written consent of Payee, and this Note
will inure to the benefit of Payee and his heirs, estates,
representatives, administrators, successors and assigns.
4.6 Section Headings, Construction
The headings of Sections in this Note are provided for
convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this Note
unless otherwise specified.
All words used in this Note will be construed to be of such
gender or number as the circumstances require. Unless
otherwise expressly provided, the words "hereof" and
"hereunder" and similar references refer to this Note in its
entirety and not to any specific section or subsection
hereof.
4.7 Savings Clause
If, at any time, the rate of interest under this Note shall be
deemed by any competent court of law, governmental agency or
tribunal to exceed the maximum rate of interest permitted by
the laws of any applicable jurisdiction or the rules or
regulations of any regulatory authority or agency, then
during such time as such rate of interest would be deemed
excessive, that portion of each interest payment
attributable to that portion of such interest rate that
exceeds the maximum rate of interest so permitted shall be
deemed a voluntary prepayment of principal or, if all
principal has been paid, that portion of each interest
payment attributable to that portion of such interest rate
that exceeds the maximum rate of interest so permitted shall
be promptly refunded to Maker.
4.8 Waiver of Jury Trial
MAKER AND PAYEE EACH HEREBY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRAIL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS NOTE, IT BEING AGREED THAT ALL SUCH TRAILS SHALL BE
CONDUCTED SOLELY BY A JUDGE. MAKER AND PAYEE EACH CERTIFY
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF EITHER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS. MAKER AND PAYEE EACH AGREE AND
ACKNOWLEDGE THAT IT HAS BEEN REPRESENTED BY INDEPENDENT
COUNSEL IN CONNECTION WITH THIS NOTE OR BEEN ADVISED THAT IT
SHOULD BE REPRESENTED BY INDEPENDENT COUNSEL IN CONNECTION
WITH THIS NOTE. IF MAKER OR PAYEE HAS DECIDED NOT TO BE
REPRESENTED BY INDEPENDENT COUNSEL IN CONNECTION WITH THIS
NOTE, IT IRREVOCABLY AND FOREVER WAIVES ANY AND ALL DEFENSES
OR RIGHTS ARISING OUT OF OR RELATED TO SAID DECISION.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the
date first stated above.
PHASE III MEDICAL, INC.
By: /s/ Mark Weinreb
----------------
Name: Mark Weinreb
Title: President and Chief Executive Officer
Accepted and agreed to:
/s/ Robert Aholt
- ----------------
Payee: Robert Aholt
Exhibit 10.3
------------
PHASE III MEDICAL, INC.
330 South Service Road
Suite 120
Melville, New York 11747
631 574.4955
September 13, 2004
Mr. Robert Aholt, Jr.
20128 Cavern Court
Saugus, California 91390
Dear Mr. Aholt:
We are pleased to extend to you an invitation to become the Chief Operating
Officer ("COO") of Phase III Medical, Inc. (the "Company").
As you know, the Company is a public company that, among other things,
provides capital and guidance to companies, within the medical sector, in
exchange for revenues, royalties and other contractual rights known as "royalty
interests," that entitle it to receive a portion of revenue from the sale of
pharmaceuticals, medical devices and biotechnology products. As COO, you will be
responsible for assisting the Company in reviewing and evaluating business,
scientific and medical opportunities, and for other discussions and meetings
that may arise during the normal course of the Company conducting its business.
This Letter Agreement shall be effective as of September 13, 2004 (the
"Commencement Date") and shall continue for a period of three (3) years from the
Commencement Date (the "Term"). For all services rendered by you in any capacity
required hereunder during the Term, you shall be entitled to a monthly salary of
$4,000 during the first year of the Term, $5,000 during the second year of the
Term, and $6,000 during the third year of the Term, payable within normal
payroll practices of the Company, provided that all conditions to payment
specified herein have been met.
In further consideration for your services hereunder, on January 1, 2005
and on the first day of each calendar quarter thereafter during the Term, the
Company shall grant you a number of shares of common stock, $0.001 par value per
share, of the Company ("Common Stock"), with a "Dollar Value" of $26,750.00,
$27,625.00 and $28,887.50, respectively, during the first, second and third
years of the Term. The per share price (the "Price") of each share granted to
determine the Dollar Value shall be the average closing price of one share of
Common Stock on the National Association of Securities Dealers, Inc.
Over-the-Counter Bulletin Board (the "Bulletin Board") (or other similar
exchange or association on which the Common Stock is then listed or quoted) for
the five (5) consecutive trading days immediately preceding the date of grant of
such shares; provided, however, that if the Common Stock is not then quoted on
the Bulletin Board or otherwise listed or quoted on an exchange or association,
the Price shall be the fair market value of one share of Common Stock as of the
date of grant as determined in good faith by the Board of Directors of the
Company. The number of shares of Common Stock for each quarterly grant shall be
equal to the quotient of the Dollar Value divided by the Price. The shares
granted will be subject to a one year lockup as of the date of each grant.
At the end of each year, the parties will discuss variations in the cash
and stock proportions of your compensation. In the absence of an alternative
mutual agreement, the foregoing shall apply.
Your employment with the Company shall automatically terminate upon your
death or Disability (as defined below). The Company may terminate your
employment prior to the end of the Term with or without Cause (as defined below)
immediately upon written notice to you. You may terminate your employment upon
thirty (30) days' prior written notice to the Company. For purposes of this
Letter Agreement, the terms set forth below shall have the meanings ascribed to
them below:
"Cause" shall mean (i) willful malfeasance or willful misconduct by you in
connection with your employment; (ii) your gross negligence in
performing any of your duties under this Letter Agreement; (iii) your
conviction of, or entry of a plea of guilty to, or entry of a plea of
nolo contendre with respect to, any crime other than a traffic
violation or infraction which is a misdemeanor; (iv) your material
breach of any written policy applicable to all employees adopted by
the Company that is not cured to the reasonable satisfaction of the
Company within fifteen (15) business days after notice thereof; or (v)
material breach by you of any of your agreements in this Letter
Agreement which is not cured to the reasonable satisfaction of the
Company within fifteen (15) business days after notice thereof.
"Disability" shall mean your inability to perform an essential function of
your duties and responsibilities to the Company by reason of a
physical or mental disability or infirmity, which inability has
continued for a period of more than six (6) consecutive months, or for
a period aggregating more than six (6) months, whether or not
continuous, during any nine (9) month period. The existence of a
Disability shall be determined by the Company in its absolute
discretion.
"Good Reason" shall mean (i) the Company's reassignment of your base of
operations outside of Los Angeles, California without your consent,
(ii) the material reduction by the Company of your duties during the
Term, (iii) the Company's material breach of the Company's obligations
under this Letter Agreement, or (iv) the Company not retaining you as
COO.
In the event your employment is terminated prior to the end of the Term due
to your death or Disability, by the Company with or without Cause or upon your
resignation from your position as COO for Good Reason, earned but unpaid cash
compensation and unreimbursed expenses due as of the date of such termination
(the "Employment Termination Date") shall be payable in full. In addition, in
the event your employment is terminated prior to the end of the Term for any of
the reasons identified in the preceding sentence other than by the Company with
Cause, you or your executor of your last will or the duly authorized
administrator of your estate, as applicable, will be entitled (i) to receive
severance payments equal to one year's salary, paid at the same level and timing
of salary as you are then currently receiving and (ii) to receive, during the
one (1) year period following the Employment Termination (the "Severance
Period"), the stock grants that you would have been entitled to receive had your
employment not been terminated prior to the end of the Term; provided, however,
that in the event such termination is by the Company without Cause or is upon
your resignation for Good Reason, such severance payment and grant shall be
subject to your execution and delivery to the Company of a release of all claims
against the Company. No other payments shall be made, nor benefits provided, by
the Company in connection with the termination of employment prior to the end of
the Term, except as otherwise required by law.
The Company shall pay or reimburse you for all reasonable travel or other
expenses (including, without limitation, digital subscriber line (DSL), car (at
$750 per month), cell phone and insurance expenses) incurred by you in
connection with the performance of your duties and obligations under this Letter
Agreement, subject to your presentation of appropriate vouchers in accordance
with such procedures as the Company may from time to time establish (including
any procedures established to preserve any deductions for Federal income
taxation purposes to which the Company may be entitled). I will also pay the
executive search firm that you engaged up to $5,000 of the amounts that you owe
to such firm.
All payments provided for under this Letter Agreement shall be paid in cash
from the general funds of the Company. The Company shall not be required to
establish a special or separate fund or other segregation of assets to assure
such payments, and, if the Company shall make any investments to aid it in
meeting its obligations hereunder, you shall have no right, title or interest
whatever in or to any such investments except as may otherwise be expressly
provided in a separate written instrument relating to such investments.
You acknowledge that, as COO, you will have access to the Company's
confidential information and that all confidential information shall be and
remain the sole property of the Company and that you will not at any time, now
or in the future, disclose, disseminate or otherwise make public any of the
confidential information without the express written permission of the Company.
You acknowledge and agree that your services pursuant to this Letter
Agreement are unique and extraordinary; that the Company will be dependent upon
you for development, financial, marketing and other expertise; and that you will
have access to and control of confidential information of the Company. You
further acknowledge that the business of the Company is international in scope
and cannot be confined to any particular geographic area. You further
acknowledge that the scope and duration of the restrictions set forth in this
paragraph are reasonable in light of the specific nature and duration of the
transactions contemplated by this Letter Agreement. For the foregoing reasons
and to induce the Company to enter this Letter Agreement, you covenant and agree
that during the Term and the period beginning at the end of the Term and ending
one (1) year after the end of the Term, you shall not unless with written
consent of the Company:
(i) engage in any business directly related to the business of
providing capital and guidance to companies, within the medical
pharmaceutical and biotechnology sector, or in any other business
conducted by the Company during the Term (collectively, the
"Prohibited Activity") in the world for your own account;
(ii) become interested in any individual, corporation, partnership or
other business entity (a "Person") engaged in any Prohibited
Activity in the world, directly or indirectly, as an individual,
partner, shareholder, officer, director, principal, agent,
employee, trustee, consultant or in any other relationship or
capacity; provided, however, that you may own directly or
indirectly, solely as an investment, securities of any Person
which are traded on any national securities exchange if you (x)
are not a controlling person of, or a member of a group which
controls, such person or (y) do not, directly or indirectly, own
5% or more of any class of securities of such person; or
(iii) directly or indirectly hire, employ or retain any person who at
any time during the last twelve (12) months of the Term was an
employee of the Company or directly or indirectly solicit,
entice, induce or encourage any such person to become employed by
any other person.
You hereby acknowledge that the covenants and agreements contained in the
immediately preceding paragraph are reasonable and valid in all respects and
that the Company is entering into this Letter Agreement on such acknowledgment.
If you breach, or threaten to commit a breach, of any of the restrictive
covenants set forth in this Letter Agreement (the "Restrictive Covenants"), the
Company shall have the following rights and remedies, each of which rights and
remedies shall be independent of the other and severally enforceable, and all of
which rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company under law or in equity: (i) the
right and remedy to have the Restrictive Covenants specifically enforced by any
court having equity jurisdiction, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company; and (ii)
the right and remedy to require you to account for and pay over to the Company
such damages as are recoverable at law as the result of any transactions
constituting a breach of any of the Restrictive Covenants.
You hereby represent and warrant that (i) you have the legal capacity to
execute and perform this Letter Agreement, (ii) this Letter Agreement is a valid
and binding agreement enforceable against you according to its terms, (iii) the
execution and performance of this Letter Agreement does not violate the terms of
any existing agreement or understanding to which you are a party or by which you
may be bound and (iv) you have, and will, maintain during the Term, all
requisite licenses, permits and approvals necessary to perform the duties of COO
set forth herein. You also hereby agree that you shall not participate in any
medical, health, and insurance plans which may from time to time be in effect
for employees of, or consultants to, or other agents of, the Company. You hereby
acknowledge to the Company that you desire to, and are capable of, securing such
benefits independent of your relationship with the Company.
This Letter Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without reference to the
choice of law principles thereof. Any claim, controversy or dispute between the
parties hereto, arising out of, relating to, or in connection with this Letter
Agreement or any aspect of your services to the Company hereunder, including but
not limited to the termination of this Letter Agreement and any and all claims
in tort or contract, shall be submitted to arbitration in Melville, New York,
pursuant to the American Arbitration Association ("AAA") National Arbitration
Rules for the Resolution of Employment Disputes. This provision shall apply to
claims against the Company and/or its affiliates and their respective current or
former employees, agents, managers, officers and/or directors. Any issue about
whether a claim is covered by this Letter Agreement shall be determined by the
arbitrator. There shall be one arbitrator, who (a) shall be chosen from a panel
provided by the AAA and who shall apply the substantive law of the State of New
York, (b) may award injunctive relief or any other remedy available from a
judge, including attorney fees and costs to the prevailing party, and (c) shall
not have the power to award punitive damages. Judicial review of the
arbitrator's award shall be strictly limited to the issue of whether said award
was obtained through fraud, corruption or misconduct.
This Letter Agreement shall be binding upon, and shall inure to the benefit
of, the Company and you and its and your respective permitted successors,
assigns, heirs, beneficiaries and representatives. This Letter Agreement is
personal to you and may not be assigned by you without the prior written consent
of the Company. Any attempted assignment in violation of this paragraph shall be
null and void. This Letter Agreement shall constitute the entire agreement among
the parties with respect to the matters covered hereby and shall supersede all
previous written, oral or implied understandings among them with respect to such
matters.
We are excited about your involvement with the Company and look forward to
a long and mutually rewarding scientific and business relationship.
For our records, I would appreciate your countersigning the attached copy
of this Letter Agreement and returning the same to me at your earliest
convenience.
Sincerely,
PHASE III MEDICAL, INC.
By: /s/ Mark Weinreb
----------------
Mark Weinreb, President & CEO
Accepted and agreed to:
/s/ Robert Aholt
- ----------------
Robert Aholt
Exhibit 99.1
------------
[PHASE III MEDICAL, INC. LOGO]
Phase III Medical Hires Seasoned Business Strategist as Chief Operating Officer
MELVILLE, N.Y.--(BUSINESS WIRE)--Sept. 15, 2004--
Robert J. Aholt, Jr. Brings Extensive Experience in Operational
Management, Financial Development and Business Analysis
Phase III Medical (OTCBB:PHSM), an innovative business that
provides capital and guidance to companies in multiple sectors of the
healthcare and life science industries, announced today that it has
hired Robert J. Aholt, Jr. to serve as Chief Operating Officer. He
will be responsible for all operational aspects of the Company and
will serve as an integral part of the management team. He is also
taking an equity position in the Company.
Prior to joining the Company, Mr. Aholt, 43, was Principal and
Chief Financial Officer of Systems Development, Inc., a private
consulting firm focusing on strategic and technology consulting for
Fortune 500 companies. As a co-founder of Systems Development in 1993,
Mr. Aholt helped build the company into a multi-million dollar
consulting practice with clients such as Universal Studios, Toyota,
Sony and Fox Pictures. His client work includes strategic and program
management on projects as large as $85 million with three-year
durations and scope covering company strategies and competitive
advantages. As CFO, he oversaw all financial and operational aspects
of the firm. Prior to Systems Development, Mr. Aholt was CFO of IW
Communications Group, a public relations firm that helps companies
target Asian communities for public relations outreach. Mr. Aholt has
also worked as a controller of First Affiliated Securities, a regional
brokerage firm in Southern California.
Mark Weinreb, President and CEO of Phase III Medical, said, "We're
delighted to have Bob join the Phase III Medical team. Following more
than a decade at Systems Development, he brings a broad range of
independent consulting experience with highly successful companies.
His knowledge of business development, strategic analysis, financial
management and deal negotiation will help accelerate the growth of
Phase III and provide our clients with the expertise they need for
rapid commercialization and revenue generation."
Said Bob Aholt, "I am extremely pleased to join Phase III
Medical's management team at this stage of the Company's development.
This is a very creative group of people with an exciting new approach
to the dynamic healthcare industry, and I look forward to working
closely with them to develop this innovative enterprise."
About Phase III Medical
Phase III Medical (OTCBB:PHSM), a Delaware corporation, is an
innovative, publicly traded company positioned to capitalize on growth
in multiple sectors of the healthcare and life sciences industry by
providing non-dilutive capital and guidance in return for a percentage
of revenues, royalty fees, licensing fees, and other product sales of
the target company. Phase III seeks to partner with and provide funds
to medical companies with substantial potential or existing revenues,
which are seeking $250,000 to $2 million to complete late-stage
product development, fund marketing efforts, fund geographic expansion
or pursue follow-on licensing arrangements with larger distributors.
Certain statements in this press release constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or
achievements of Phase III Medical, Inc. ("the Company"), or industry
results, to be materially different from any future results,
performance, or achievements expressed or implied by such
forward-looking statements. The Company's future operating results are
dependent upon many factors, including but not limited to the
Company's ability to: (i) obtain sufficient capital or a strategic
business arrangement to fund its expansion plans; (ii) build the
management and human resources and infrastructure necessary to support
the growth of its business; (iii) competitive factors and developments
beyond the Company's control; and (iv) other risk factors discussed in
the Company's periodic filings with the Securities and Exchange
Commission which are available for review at www.sec.gov under "Search
for Company Filings."
Consulting For Strategic Growth 1, Ltd. ("CFSG") provides Phase
III Medical, Inc. with consulting, business advisory, investor
relations, public relations and corporate development services.
Independent of CFSG's receipt of cash compensation from Phase III
Medical, CFSG may choose to purchase the company's common stock and
thereafter liquidate those securities at any time it deems appropriate
to do so.
CONTACT: Phase III Medical, Inc.
Mark Weinreb, 631-574-4955
Fax: 631-574-4956
mweinreb@phase3med.com
OR
Consulting For Strategic Growth 1
Gerald Franz, 800-625-2236 or 917-715-2171
Fax: 212-697-0910
CFSG1@aol.com