Estate of Ross H. Freeman, Deceased, Dennis Hersey, Executor - Page 5

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          Capital Structure                                                           
               At the time of decedent’s death, there were outstanding one            
          series of common stock of the corporation and eight series of               
          preferred stock.  With the exception of the Series F preferred              
          stock, all series of preferred stock were convertible to common             
          stock at the ratio of 1 to 1.  The Series F preferred stock was             
          convertible at the ratio of 1.05 shares of common stock to                  
          1 share of preferred.                                                       
          Financial Performance                                                       
               From 1986 through 1989, the corporation’s revenues and net             
          income were as follows:                                                     
                    FYE          Revenues           Net Income                        
                    1986      $435,000            ($4,928,000)                        
                    1987      4,375,000           (5,080,000)                         
                    1988      13,755,000          (1,689,000)                         
                    1989      30,445,000          4,382,000                           
                                                                                     
          Private Sales of Stock                                                      
               From its inception through June 1990, the corporation sold             
          13,331,060 shares of preferred stock at prices ranging from $1 to           
          $4.                                                                         
               On August 24, 1989, common stock of the corporation was                
          authorized to be sold to certain outside sales representatives of           
          the corporation for $1.25 a share.  On December 8, 1989, common             
          stock of the corporation was authorized to be sold to certain               
          outside sales representatives of the corporation for $2.25 a                
          share.  The purpose of those sales was to give those sales                  





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