ITEM 5. OTHER INFORMATION.
Completion of Purchase of Certain property and equipment From MTel.
The Company closed on its acquisition of telephone switches equipment and
related rights from MTel Communications, Inc. ("MTel"). A copy of the Asset
Purchase Agreement with MTel and a Consulting Agreement with Mike Vazquez are
attached as Exhibit 8.2. and 8.3. to the Company's Form 8-K filed on May 20,
Establishment of MBI Services Group, LLC
The Company established MBI Services Group, LLC (the "Services Group"), a wholly
owned limited liability company registered with the state of Florida, and named
Erik Jensen, the Company's President, as the Managing Member. The assets
purchased from MTel were transferred to the Services Group with $50,000 being
designated as contributed capital and the remaining $898,200 payable to the
Extension of eChex Note
The Company entered into an Accord, Mutual Release and Non-Disparagement
Agreement with eChex. Under this agreement, the Company assumed all rights and
obligations of eChex under their Broker-Client Agreement with Acosta, Inc.
("Acosta") in return for an extension of its note receivable due from eChex.
Both companies mutually released each other and Acosta from litigation
concerning the past relationships between the parties and the Company also
extended the term of the Note an additional six (6) months. In exchange for
releasing the personal guarantees of the three principal officers and
shareholders of eChex, eChex assigned all revenue under the Broker-Client
Agreement to the Company. A copy of this agreement is attached as Exhibit 8.1.1.
to the Company's Form 8-K filed on May 3, 2005.
2005 Options Issued to Employees
The Company granted 10,175,000 options to purchase the Company's stock to
various employees at exercise prices equal to the trading value of its stock on
the date the options were granted (subsequently and before June 30, 2005,
733,333 of these options were canceled when employees left the employ of the
Company). A copy of this stock option plan is attached hereto as Exhibit 5.1.
The Company hired Scott Matthews as its Vice President of Business Development.
Prior to his joining the Company Mr. Matthews was the founder and Chief
Executive Officer of Platinum Financial Group, a marketing company that managed
six stored value MasterCard programs.
On April 26, 2005 Michael Rejbeni tendered a 30 day notice of resignation under
his contract as Vice President of Sales. During the 30 day period the Company
renegotiated the services of Mr. Rejbeni as Vice President of Operations and a
new employment contract was agreed upon.
Roderick Braido, the Company's Vice President of Western Operations, resigned
effective June 30, 2005. The Company does not plan on replacing the position at
Agreement with Virtual Card Services
The Company entered into that certain, exclusive Stored Value Card Distribution
Agreement with Virtual Card Services, LLC ("VCS") dated May 19, 2005 pursuant to
which VCS will market the Company's debit cards to automotive dealers nationwide
who are focused on serving the sub-prime market, as well as to its own customer
of sub prime consumers. VCS acts as the intermediary between a vendor and
financial institutions via its 'Virtual Vendor' system. A copy of this agreement
is attached as Exhibit 8.1.1. to the Company's Form 8-K filed on June 3, 2005.
Agreement with Network Management Inc.
The Company entered into that certain distribution agreement with Network
Management Inc. ("NMI") pursuant to which NMI will supply Morgan Beaumont's
Stored Value and Debit card products as well as deploy the SIRE Network
technology to NMI's sales channel of 6000 retail locations. A copy of this
agreement is attached as Exhibit 8.1.1. to the Company's Form 8-K filed on June
Agreement with Western Union
The Company entered into that certain Swift Pay Service Agreement with Western
Union to allow the Company's cardholders to load funds on to their Morgan
Beaumont cards at all of Western Unions' approximately 45,000 locations within
the United States. The Company believes the integration of its programs with
Western Union infrastructure will take between 30 to 60 days and will be
complete late in the fourth fiscal quarter 2005 or early in the first fiscal
quarter of 2006. The Company expects the integration and technical costs to be
nominal and does not consider the integration with Western Union to adversely
impact the Company's technical or operational capacity. Western Union will
charge the Company's customers a fee for loading their cards and will pay a
commission on those fees to the Company. The Company has guaranteed to Western
Union a minimum monthly volume of 500 transactions in the first year and 1500
transactions per month thereafter. The Company will pay to Western Union $4.95
for each transaction less than the monthly minimum. A copy of this agreement is
attached as Exhibit 8.1.1. to the Company's Form 8-k filed on June 24, 2005.
Distribution Agreement with CGS Financial Technologies
The Company entered into that certain Strategic Partnership with CGS Financial
Technologies ("CGS") in which CGS will distribute the Company's card products
through its retail channels. A copy of this agreement is attached as Exhibit
8.1.1. to the Company's Form 8-K filed on July 7, 2005.
Distribution Agreement with Symmetrex Inc.
The Company entered into that certain Distribution Agreement with Symmetrex Inc.
("Symmetrex") in which Symmetrex will distribute the Company's card products
through its retail channels. A copy of this agreement is attached hereto as
Bin Sponsor Agreement with First Gulf Bank
The Company entered an agreement with First Gulf Bank ("First Gulf") in which
First Gulf agreed to become a Bin sponsor for some of the Company's branded
Visa cards for prepaid programs approved by Visa in return for fees based on
transactions on the cards. The Company has been approved as an Independent Sales
Organization ("ISO") for First Gulf Bank. A copy of this agreement is attached
as Exhibit 5.4. to the Company's 10-KSB filed on May 10, 2005.
Sublease Agreement with GEBO Corporation USA
The Company entered a certain Sublease Agreement with GEBO Corporation USA
("GEBO") in which GEBO will sublease to the Company certain premises consisting
of 20,000 square feet in the same building as 6015, LLC located at 6015 31st
Street East, Bradenton, Florida 34203, for the purpose of office space and
related uses of the business to be operated by the Company. During the term of
the sublease, the Company shall pay base rent in the sum of $8,333.33 per month.
A copy of this agreement is attached hereto as Exhibit 5.4.
On August 10, 2005, the Company issued a press release announcing the new
agreement with Meta Payment Systems to develop stored value ATM/Debit card
On August 12, 2005, the Company issued a press release the fiscal third quarter
results for the period ended June 30, 2005.