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expected to be repaid either in cash or with an equity
interest in CPI. Mr. Flaherty's letter states as follows:
Dear Mr. Whelpley:
This letter is to confirm our conversation
as you requested regarding the accounting
treatment of the investment made by Weeden in
Whelpley related projects in 1987. According
to our records, Weeden funded the development
of the business plan and prototype device with
approximately $103,000.00 as confirmed by my
1987 letter.
Whelpley Associates, Inc. and Communications
Processors, Inc. are thought to be essentially
the same by Weeden Capital Management, Inc.
They were considered to be a joint vehicle for
developing the ideas that surrounded a certain
business concept which you and we originated.
Communications Processors, Inc. was intended to
be separated from Whelpley Associates, Inc. when
other outside funding was secured.
Weeden was interested in accelerating the
availability of a particular product design to
accommodate an initial customer. To that end and
pursuant to an agreement, Weeden advanced funds
in the amount indicated above to cover operating
expenses associated with that development. The
Amounts that were advanced, as loans, to Whelpley
Associates, Inc. and yourself were to be
recovered either; (1) in the form of loan repay-
ments, or (2) convertible into equity in the
projects that CPI and WAI were pursuing. Weeden
considers amounts advanced to be returnable as
equity in any business entity that results from
the activity funded in 1987.
Sincerely,
Thomas L. Flaherty
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