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advances only with CPI stock, and that Weeden would not
require repayment in cash.
Sometime between April 29 and September 10, 1987,
Avant-Garde withdrew its commitment to purchase a license
to use the CPI product. Facing a shortage of capital,
Mr. Whelpley sought an outside investor to fund the
project. WAI prepared a draft business plan for CPI, dated
September 10, 1987, to assist in this process. However,
Mr. Whelpley was unable to secure either a new source of
financing or any new customers for the product. In 1988,
Weeden lost interest and stopped investing in the project.
The project was then abandoned. Mr. Whelpley resigned from
CPI's board of directors in 1988.
Weeden neither collected nor attempted to collect the
funds it had advanced to WAI on behalf of CPI for the CPI
project. Weeden's general ledger trial balance for 1988,
dated February 3, 1989, shows that the account RECEIVABLE
FROM CPI had a debit balance of $103,092.89 at the
beginning of 1988, and that offsetting credits were made to
the account during the year. The trial balance also shows
the following entries in an account entitled "Loss from
CPI" which had a debit balance of $103,092.89 at the end
of 1988:
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