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<Edwin> Good Afternoon Ladies and Gentlemen. Thank you
for your interest in Monogram Pictures, Inc. and Med Tech Labs,
Inc. d/b/a/ Med Services of America. I am proud to introduce my
staff and myself to you at this time.
The words you read today are my own. I am Edwin
B. Salmon, Jr. Chief Executive Officer and Chairman of the Board
of Monogram Pictures, Inc. and Med Tech Labs, Inc.
Here with me today are Patrick Barmore, President
and Chief Operating Officer of Monogram and Med Tech Labs, Inc.
Robert Parker, President of Medical Discounts, Limited, Inc. and
David E. Salmon, Investor Identification and Communications for
Monogram Pictures, Inc.
First a little housekeeping for the SEC:
Special Note: Management believes certain statements in this internet
chat may constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform act of 1995.
These statements are made on the basis of management's views and
assumptions regarding future events and business performance as
of the time the statements are made. Actual results may differ from
those expressed or implied. Such differences may result from actions
taken by the company prior to its current fiscal year end, as well
as from developments beyond the company's control, including changes
in global economic conditions that may, among other things, affect
the performance of the company's anticipated acquisitions or future
business. In addition, changes in domestic competitive and economic
conditions may also affect performance of all significant company
businesses.
And please, refer to our SEC filings for full disclosure.
<TJ^> Mr Salmon - Cinswen will start with
the questions if you are ready.
<Edwin> Ok, take your time.
<Cinswen> Regarding the upcoming stock
exchage, Question # 1: is this a share for share exchange?
<Edwin> Not as your question implies where a $20 dollar
stock acquires a company with a valuation (stock price, market cap,
book value etc.) similar to each other.
In this case Med Tech Labs, Inc. with $12 Million
in Revenue, a history of profitability and an acquisition contract
in hand itself to nearly double the revenue is being acquired by
Monogram Pictures, Inc. which retains one operating division
(MDL) that last year grossed Approx. $100,000 and lost money.
Monogram will issue new shares from treasury
such that the current individuals that comprise 100% ownership of
the capital stock of the private company Med Tech Labs, Inc. will
own 95% of Monogram Pictures, Inc.
The Capital Stock of Med Tech Labs, Inc. is
then actually signed over to Monogram Pictures, Inc. So, shares
do change hands, but not at a 1:1 ratio that your question implies.
<Cinswen> Ok, thank you. Moving on,
Question #2 Can you Please Explain paragraph 3 of your Janurary
30th news release?
Monogram recently issued 10 million shares to Thomas. Kearney, Lee
Mullineaux of A.S.K. Consulting, Inc. and David Salmon for the purpose
of identifying a ``Target'' acquisition and other obligations. Those
shares were subsequently registered with the Securities and Exchange
Commission on form S-8. Mssrs. Kearney and Mullineaux are also shareholders
of Med Tech Labs, Inc....
<Edwin> You might think of the time period
between the letter of intent and the signing of the Agreement Providing
for the Exchange of Capital Stock as the engagement before the wedding.
Med Tech Labs, Inc. had many suitors to help
it "Go Public" given the experience in the public market
of myself and Tom Kearney, Lee Mullineaux and David Salmon.
In analyzing the dozen or more shell companies,
Monogram emerged as the one of choice. The introduction came through
a medical collections specialist acquaintance here in Clearwater
Florida.
Med Tech Labs, Inc. would not allow any company
to acquire it without extensive due diligence performed on that
company. A.S.K., Inc. is a Florida Corporation formed in 2001 as
a consulting business.
Its shareholders (myself, Lee Mullineaux, Tom
Kearney and Veronica Tully) together have been involved in many
business transactions for ourselves as well as consulting for others
long before I bought the assets of what is now Med Tech Labs, Inc.
A.S.K. Consulting, Inc. entered into a letter
of intent to find a target company for Monogram to buy. That's one
of the things A.S.K. does. It truly had an obligation to perform
under that binding letter of intent.
The fact is that Med Tech was a candidate but
not necessarily the definitive target. The issuance of Monogram
stock to Mullineaux and Kearney was primarily for finding a target
for Monogram.
It also gave voting control of Monogram to those
gentleman which among other things allowed access to information
for performing thorough due diligence.
Upon Closing of the Agreement Providing for
the Exchange of Capital Stock, the Mullineaux and Kearney shares
will be absorbed by the 95% side of the transaction maintaining
the integrity of the 5% side.
Kearney has contingent ownership of Med Tech
Labs, Inc. through a convertible debt instrument which will be forced
to conversion and constitute a portion of the 95%.
Mullineaux has outright beneficial ownership
to a portion of Med Tech Labs, Inc., David Salmon has none.
The issuance of stock to David Salmon, past
member of the National Investor Relations Institute and former COO
of Stampede Worldwide, Inc. (a public company unrelated to any of
the above companies) was/is for services provide to Monogram.
<Cinswen> Thank you, next....
Question #2A Does this mean that the persons will give the
10 million back to the company Monogram Pictures, Inc.
<Edwin> The shareholders can assume
that David Salmon will either 1. re-negotiate to keep what he
has pre closin.
2. Get new shares as compensation post closing
or 3. Get a salary plus new shares post closing. The Kearney and
Mullineaux shares (8 Million) will be absorbed by the 95% side
of the transaction so they have a non-dilutive effect to the 5%
side.
So, technically they may not be sent to the
transfer agent and canceled, but will be mathematically computed
to represent there portion of the current beneficial ownership
of Med Tech Labs, Inc.
<Cinswen> Question #2B Does this
mean that Kearney and Mullineaux's Monogram 8 Million shares will
be exchanged for 8 Million shares of Med Tech Labs, Inc. and 8
Million shares of Medical Discounts Limited, Inc. (MDL)...
and If so will they have to file a 144 form with the SEC to sell
any of the Newly issued Med Tech Labs, Inc. shares?
<Edwin> It's not useful to equate number
of shares between companies. Quite frankly, we won't do the exact
math until right before closing. Percentages are how we think
of the deal right now. Med Tech Labs, Inc. has only 5 shareholders
that will own 95% of Monogram post closing. All of which will
be "Restricted Securities" as defined by the SEC. Restricted
for 2 years and then assuming each are still affiliates after
2 years, form 144 would be required as well as form 3's and 4
for 10% owner or more.
There is no direct relationship between the
Kearney and Mullineaux shares and MDL. Again we think in percentages
at this point. That group of shareholders that will represent
the 5% of Monogram post closing (all shareholders except the current
holders of Med Tech Stock) will own 95% of MDL.
Kearney and Mullineaux will have NO additional
interest in MDL beyond that which all shareholders of Monogram
have post closing. Monogram (The company) will retain 5% ownership
in MDL. That will show up as an asset on Monogram's books.
<Cinswen> Question #2C What does
it mean "current shareholders"? (also included in the
January
30th press release:)
The current shareholders of Med Tech Labs, Inc., adjusted
for the return of the Kearney, Mullineaux and Salmon shares, will
own 95% of the issued and outstanding stock of Monogram Pictures,
Inc. at closing. The transaction includes the distribution through
a stock dividend of Medical Discounts Limited, Inc. to the same
Monogram Pictures, Inc. shareholders adjusted for the Kearney,
Mullineaux and Salmon tender. Each shareholder will own shares
of two companies subsequent to closing subject to an effective
Registrations Statement with the Securities and Exchange Commission.
<Edwin> This may be answered above,
but to put it another way. The intent is to separate the private
owners of Med Tech Labs, Inc. from the shareholders of Monogram
and re-distribute Monogram at the ratio of 95:5.
Kearney and Mullineaux are Med Tech Labs,
Inc. security holders now and will be treated as such. Since the
shareholders of Monogram brought to the negotiation table a wholly
owned subsidiary called MDL, we, speaking as the holders
of Med Tech Labs, Inc. and future majority holders of Monogram
wanted to give back MDL to the original shareholders but retain
a 5% interest.
We, speaking as Monogram intend on funding
MDL as investors for several reasons. MDL is complimentary to
our (Lab) business and we have the funds to do so. MDL will file
a registration statement so its shares may be traded on an exchange.
We can then leverage our investment banking
contacts to further assist its growth.
<Cinswen> Question #3 has this
been approved by the SEC and if so what filings would it be under?
<Edwin> The SEC does not "approve"
acquisition transactions. They do require certain disclosure with
timeline requirements. Such as Annual (10K) , quarterly (10Q)
and current reports (8K).
<Cinswen> Question #4 Was A.S.K.
Consulting, Inc. formed for the sole purpose of merging with Med-Tech
Labs, Inc. d/b/a Med Services of America's ?
<Edwin> No, see above.
<Cinswen> Question #5 What will
be the amount of Authorized shares ?
<Edwin> 100,000,000
<Cinswen> Question #6 What will
be the amount of outstanding shares ?
<Edwin> It is anticipated that after
the closing there will be approximately 10 million issued and
outstanding. That will be accomplished by a reverse split first,
then issuance to the holders of Med Tech Labs, Inc. an amount
equal to 95%.
Resulting in a total of 10 million issued
and outstanding. This number is subject to change based on our
investment banking relationships input that may deem it necessary
to have more or less out.
In any case the percentages will remain the
same between the current Monogram holders and Med Tech Labs, Inc.
Holders.
<Cinswen> Question #7 What %
of shares will the insiders hold after the merger?
<Edwin> 95%
<Cinswen> Question #8 Will the
shareholder of MOPP receive shares of Medical Discounts Limited?
<Edwin> Yes, however, the shares of
MDL will likely be forward split to accommodate a public market.
I believe the current issued and outstanding is 500,000 to Monogram.
<Cinswen> Question #9 Does the
Company plan on taking Medical Discounts Limited, Inc. (MDL) public?
If so what time frame?
<Edwin> I believe what you are asking is "will our
MDL shares be registered with the SEC so they may be traded on
an exchange?" The answer is yes. However, once a registration
statement is filed, most likely on Form SB-2, the SEC will usually
ask for clarification on certain points.
This process can go through several rounds
of comments each taking 15-45 days each. We have seen them pass
with no comment on the first submittal and we have seen them go
through 5 and 6 rounds. We plan on submitting a registration statement
during the second quarter of 2002.
<Cinswen> Question #10 What is
the anti-dilutive provision which will be effective for a period
of twelve months from the date of any definitive agreement, which
governs the business combination transaction between Monogram
and Med-Tech Labs, Inc. d/b/a Med Services of America's ?
<Edwin> This provision protects the
current Monogram holders (non Med Tech Labs, Inc.) from being
reduced below 5% for issuance other than acquisitions etc. For
instance, we will acquire several labs this year with stock or
cash raised from stock.
The acquisition may or may not be dilutive
to book value. The anti-dilutive provision would not apply in
that case. On the other hand, if Monogram issues a bunch of stock
for services for which it does not acquire an asset, the anti-dilutive
provision would apply.
<Cinswen> Question #11 Ed Salmon
mentioned as COO of stampede Worldwide.Inc for the past 5 years.
In recent filings, why no mention of HITT? Was that not within
the 5 yr period?
<Edwin> David Salmon (my 38 yr. old
son) was COO of Stampede and served as a director for a period
of time. David Salmon never had any involvement in HITT. David's
disclosure was required on Form S-8.
I (Edwin B. Salmon, Jr.) am the Chairman and
CEO of Med Tech Labs, Inc. and its largest shareholder. I am now
the Chairman and CEO of Monogram Pictures, Inc. In an effort to
bring the maximum value to shareholders of a company named Systems
Communications, Inc., I completed a transaction with a California
Corporation called Hitsgalore.com, Inc.
I never had any executive (or otherwise) positions
with Hitsgalore. I was on the other side of the transaction.
The shareholders that benefited from the transaction
remain my close supporters and most are now shareholders in Monogram
through open market purchases.
My personal disclosure will be forthcoming
in required SEC filings. But some highlights are. In 1993 I was
Chairman of Contour Medical, Inc. The stock was listed on the
OTC Bulletin Board and rose to $6.75 from $.15 over the ensuing
year and a half.
We sold the company to a larger medical company
at that time. Some of those shareholders are still we me today.
What was once Contour Medical is now part of a Larger National
Company.
I've been so busy preparing Med Tech for the
public market I haven't even check their price in two years. It
was around $30 then. Maybe one of you research pros could track
that down for us. I don't even remember their symbol to tell you
the truth.
In case you were wondering, Systems/Hitsgalore
was in between Contour and Med Tech Labs, Inc. I should mention
that our CFO, Thomas Kearney has a quite the experience too.
For 22 years Tom was an independent investment
banker, Tom provided private companies expertise introducing them
to the public equity arena.
Tom was involved with Kinder-Care, Inc., Brookwood
Heath Services, HealthCare Corporation, Hospital Corporation of
America (HCA), Laservision Inc. and Laser Sight, Inc. to name
a few.
<Cinswen> Question #12 You sold
the film library which you bought from Media Concepts. Is it true
that MDCE, Mediaconcepts, Inc. has a preferred certificate for
175K shares? And that there is a lawsuit pending with a gentleman
named Steve Swank, and until this is settled the merger will not
go through?
<Edwin> We have been aware of that suit
since the first talks with Steve Swank. Steve filed the suit as
Monogram's CEO and has been very forthcoming in assisting the
due diligence. We deem the suit in which we are the plaintiffs
to be non material under Item 103 of Regulation SB.
No issues remain regarding the preferred stock
mentioned in the Agreement Providing for the Exchange of Capital
Stock that would prevent the closing of the transaction.
<Cinswen> Thank you! This is the end
of all the questions members submitted before hand.
<TJ^> Thank you Mr. Salmon
<Edwin> Thank you Cindy
<TJ^> A question from Carlos - You mentioned a forward
split - what ratio and what timeframe....thanks.
<Edwin> That has not been fully determinded
as yet. However, with only 500,000 shares issued. It would seem
that at least a 4:1 would be reasonable. Upon registration statement
submittal for MDL refer to #8 above.
<Cinswen>Question from dooley - how
are they going to handle the payment of the preferred stock and
what are the terms on the preferred stock? Thank you.
<Edwin> Although we deemed it non-material,
see #12 above. It is however, ongoing and we can't comment on
the further.
We are aware that this topic is of interest to the shareholders
at large. We will provide a public statement as soon as possible.
<Cinswen> What's the time line? Can
you say?
<Edwin> We are still confirming our
guidance for a March 30th closing.
<Cinswen> Thank you.
<TJ^> Thank you Mr Salmon -That concludes
all questions we have received.
<Cinswen> Mr. Salmon, you have been
very helpful.
<Edwin> Thank you Cindy, I would like
to add that Robert Parker has obtained a verbal agreement on a
National Distribution contract for MDL's subscription card. We
will file this statement on Form 8K in the morning, hopefully
it will include confirmation and the signed deal with fuller disclosure
on the terms.
<Cinswen> Thank you all for joining
us. And thank you once again Mr. Salmon.
<Edwin> Thank you all for attending,
please feel free to contact our Investor Realtions Department
- Edwin.
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