Opinion
No. CV 06 4005175
April 6, 2010
MEMORANDUM OF DECISION
In this appraisal action, the court is asked to determine the "fair value" of certain shares of common stock pursuant General Statutes §§ 33-855(4) and 33-871.
PROCEDURAL HISTORY
On October 4, 2006, the plaintiff, Torrington Research Company (hereinafter the company), a closely held corporation, commenced this appraisal action against the defendants, Michael D. Marvin, Lee Newberg, Heidi Newberg and Nancy Lawson, by filing a petition with this court. In its petition, the company alleges the following. On April 8, 2006, and at all pertinent times, Heidi Newberg, Lee Newberg, Michael Marvin and Nancy Lawson owned 51,200, 51,200, 204,167 and 5000 shares of the company's common stock, respectively. The company notified its shareholders on April 8, 2006, of a meeting that was to be held on April 19, 2006, "for the purpose of considering and authorizing the company to sell substantially all" of its assets pursuant to a written asset purchase agreement with the Bergquist Torrington Company (hereinafter Bergquist), a wholly owned subsidiary of the Bergquist Company. In that notice, the company provided its opinion that the proposed action would give rise to appraisal rights. As a result, the defendants and at least two other parties gave notice of their intention to seek appraisal rights. At the special meeting, the shareholders approved the sale of "substantially all" of the company's assets to Bergquist, and on April 21, 2006, the sale occurred. On approximately May 1, 2006, the company served each defendant with an appraisal notice, and on July 12, 2006, it paid the defendants a sum equal to its estimate of the fair value of each share of the common stock. The company estimated the fair value at one cent, and thus, Heidi Newberg, Lee Newberg, Michael Marvin and Nancy Lawson were paid $524.80, $524.80, $2092.72 and $51.25, respectively. The company also provided the defendants with financial information when it paid out its estimation of the fair value of the common stock.
The other parties were: 1) John Haller; and 2) the estate of Stephen Marks and Abbie Marks. The estate of Stephen Marks and Abbie Marks filed a timely withdrawal of its intention to exercise its appraisal rights. The company paid John Haller $358.60 for the fair value of his stock. Haller is not named as a defendant because he "has given no notice of dissatisfaction with the amount of payment received, not rejected the offer of July 12, 2006, nor demanded payment of any sum other than that tendered."
On July 24, 2006, the defendants gave notice of their "dissatisfaction with the amount of the payment, rejected the offer and demanded payment of their stated estimate of the fair value of the shares," which they allege is $1.75 per share. As of the date of the filing of this petition, the parties were unable to agree upon the fair value of the company's common stock. Thus, pursuant to General Statutes § 33-871, the company instituted this action and petitioned the court to determine the fair value of the shares pursuant to General Statutes §§ 33-855 through 33-872 and to enter a judgment for the "amount, if any by which the court finds the fair value of the defendant shareholders' shares, plus interest, exceed[s] the amount" already paid to the defendants.
Specifically, the company alleges, the parties were unable to agree on the fair value of the stock immediately before "and independently of the sale of substantially all of its assets to [Bergquist]," thereby suggesting that the court should not take the Bergquist sale into account, in any way, in determining fair value.
Pursuant to § 33-871(d), this case was tried to the court without a jury on September 16, September 17, September 18 and October 29, 2009. At trial, the parties submitted numerous exhibits, and the court heard testimony from Peter Turner, James Plewacki, Roger Dickinson and Heidi Newberg. Neither the company nor the defendants called expert witnesses to testify as to appropriate valuation methods. On November 20, 2009, and November 23, 2009, respectively, the company and the defendants filed proposed findings of fact and post-trial memoranda. On December 11, 2009, the defendants filed a reply to the company's proposed findings of fact and supporting memorandum, and on December 16, 2009, the court heard post-trial arguments.
Section 33-871(d) provides in relevant part: "There shall be no right to a jury trial."
Turner was called as a witness by both the company and the defendants. Turner testified that, at the time of trial, his only relationship with the company was as a shareholder. During the asset sale, however, Turner was the company's president, chief operating officer and chief financial officer. Turner left the company in 2008 and sold his shares for seventy-five cents per share. The company called Plewacki as a witness, and he testified that he is a senior vice president and the chief financial officer of Bergquist. The defendants called Dickinson as a witness, and he testified that he was the chief executive officer, chairman and one of the founding members of the company. The defendants also called Heidi Newberg, one of the defendants. Newberg testified that she never worked for the company or Bergquist and that she is employed as a professor of physics and astronomy. Newberg testified that she and the other defendants invested in the company because her brother, Russell Marvin, was the company's chief technology officer at one point in time.
DISCUSSION I APPLICABLE LEGAL STANDARDS
In Welsh v. Independent Bank Trust Co., 1 Conn.App. 14, 467 A.2d 941 (1983), cert. denied, 192 Conn. 801, 470 A.2d 1218 (1984), the only appellate level case in Connecticut that discusses the fair value of stock in an appraisal action, the court noted: "The basic concept of value under the appraisal statute . . . is that the stockholder is entitled to be paid for that which has been taken from him . . . his proportionate interest in a going concern. This is the true or intrinsic value of this stock which has been taken by the merger . . . In determining fair value, a court may rely on a legally recognized measure of value which is supported by the subordinate facts. No single method of valuation will control in all cases . . . It is within the discretion of the trier of fact to select the most appropriate method of valuation under the facts properly found by him . . . Valuation is a matter of fact to be determined by the trier's independent judgment of what is just compensation. Thus, valuation rests largely within the discretion of the lower court." (Citations omitted; emphasis added; internal quotation marks omitted.) Id., 16-17.
"[G]oing concern value, [is] a term which has sometimes been used broadly to encompass all those factors which contribute to the value of the enterprise apart from its physical assets." (Internal quotation marks omitted.) Gray Line Bus Co. v. Greater Bridgeport Transit District, CT Page 8057 188 Conn. 417, 422, 449 A.2d 1036 (1982).
Although the Appellate Court decided Welsh before the legislature adopted the definition of fair value, in § 33-855(4), the current statutes provide discretion to the trier of fact as it determines fair value. Section 33-871 provides in relevant part: "(a) If a shareholder makes demand for payment under section 33-868 which remains unsettled, the corporation shall commence a proceeding within sixty days after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest . . . (d) The jurisdiction of the court in which the proceeding is commenced . . . is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers shall have the powers described in the order appointing them, or in any amendment to it . . . There shall be no right to a jury trial. (e) Each shareholder made a party to the proceeding is entitled to judgment (1) for the amount, if any, by which the court finds the fair value of the shareholder's shares, plus interest, exceeds the amount paid by the corporation to the shareholder for such shares, or (2) for the fair value, plus interest, of the shareholder's shares for which the corporation elected to withhold payment under section 33-867."
The applicable definition of fair value is found in § 33-855(4) and provides: "Fair value means the value of the corporation's shares determined: (A) Immediately before the effectuation of the corporate action to which the shareholder objects, (B) using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal, and (C) without discounting for lack of marketability or minority status except, if appropriate, for amendments to the certificate of incorporation pursuant to subdivision (5) of subsection (a) of section 33-856." (Internal quotation marks omitted.)
The Supreme Court has identified at least two valuation methods of closely held businesses in other contexts. "While there are several different methods by which to determine the value of a closely-held corporation, these methods, and their variants, are of two general types: (1) capitalization of earnings, or the net present value of a future income stream; and (2) net asset value, or the present sale price of the business assets less its liabilities . . . While these alternate methods of valuation frequently yield different results . . . they purport at least in theory to obtain the same object, i.e., the market value of the business. That different methods of valuation may yield different results, depending upon what exactly is being valued, does not mean that the results of the alternate methods can simply be summed to determine total value. One or the other, or the combined weighted average of each, will produce the best approximation of market value." (Citations omitted.) West Haven Sound Development Corporation v. West Haven, 201 Conn. 305, 329-30, 514 A.2d 734 (1986).
Connecticut's definition of fair value is derived from the Model Business Corporation Act's definition of fair value, which was adopted in Public Acts 2001, No. 01-199, § 15. The act's official comments indicate that its drafters endorse similar, if not identical, valuation approaches to those recognized by the Supreme Court. The comments provide in relevant part: "[F]air value is to be determined immediately before the effectuation of the corporate action, rather than, as is the case under most state statutes that address this issue, the date of the shareholders' vote. This comports with the purpose of this chapter to preserve the shareholder's prior rights as a shareholder until the effective date of the corporate action, rather than leaving the shareholder in an ambiguous state with neither rights as a shareholder nor [perfected] appraisal rights. The corporation and, as relevant, its shares are valued as they exist immediately before the effectuation of the corporate action requiring appraisal. Accordingly, [the definition of fair value] permits consideration of changes in the market price of the corporation's shares in anticipation of the transaction, to the extent such changes are relevant. Similarly, in a two-step transaction culminating in a merger, the corporation is valued immediately before the second step merger, taking into account any interim changes in value . . . The new formulation in paragraph ii [which corresponds with § 33-855(4)(B)], which is patterned on section 7.22 of the Principles of Corporate Governance promulgated by the American Law Institute, directs courts to keep the methodology chosen in appraisal proceedings consistent with evolving economic concepts . . .
"Modern valuation methods will normally result in a range of values [rather than a] particular single value. When a transaction falls within that range, `fair-value' has been established. Absent unusual circumstances, it is expected that the consideration in an arm's length transaction will fall within the range of `fair value' . . . Section 7.22 of the ALI Principles of Corporate Governance also provides that in situations that do not involve certain types of specified conflicts of interest, the aggregate price accepted by the board of directors of the subject corporation should be presumed to represent the fair value of the corporation, or of the assets sold in the case of an asset sale unless the plaintiff can prove otherwise by clear and convincing evidence. That presumption has not been included in the definition of fair value . . . because the framework of defined types of conflict transactions which is a predicate for the ALI's presumption is not contained in the Model Act. Nonetheless . . . a court determining fair value should give great deference to the aggregate consideration accepted or approved by a disinterested board of directors for an appraisal-triggering transaction." (Internal quotation marks omitted; emphasis added.) Model Business Corporation Act (American Bar Association) § 13.01(4), official comment (2008).
II THE PARTIES' ARGUMENTS
The company argues, inter alia, that the definition of fair value in § 33-855(4) precludes the court from considering the value of any appreciation or depreciation arising out of the transaction to which the dissenting shareholders object. The company argues that the statute precludes any adjustment for appreciation or depreciation because the definition of fair value is based on the time period "immediately before" the transaction to which the dissenting or minority shareholders object, which, in this case, is Bergquist's purchase of substantially all of the plaintiff's assets. Moreover, the company argues, "value must be taken to mean what the shares would be worth if the proposed change in the corporation had not occurred." Thus, the dissenting shareholders are entitled to the fair value of their interest in the specific "going concern" that existed before the transaction to which they object and no more. Although the company recognizes that the court has broad discretion in choosing a valuation method, it notes that the following factors are generally considered appropriate when determining the fair value of shares: earnings record, earnings prospect, capitalization of its earnings, dividend record, rate of dividends, probability/likelihood of future earnings and dividends, accumulated surplus earnings, the "basic condition" of the corporation, the market value of its stock, reserves for contingencies and requirements for and availability of working capital, value of assets, book value, liabilities, net asset value and liquidation value.
Additionally, the company argues, a threshold issue for the court is whether it was a "going concern." Since Connecticut has adopted the "going concern" standard, the company argues that "those methods of valuation geared to valuing a going business rather than those geared to valuing assets and liabilities in a theoretical liquidation circumstance would seem most appropriate." Moreover, the company argues, it was not a "going concern" as of April 21, 2006, since evidence and testimony reveal that it was insolvent and without significant earnings, but for the asset sale with Bergquist. In fact, the company argues, it would have filed for bankruptcy if the asset sale had not occurred. Even if there is evidence to support the fact that the company was a "going concern," the company argues that the "generally accepted factors" used in going concern valuations "negate any claim that [the company] had a positive value." Thus, if the court finds that the company was a "going concern," the company suggests that a "reliable factor" upon which the court may use to determine the fair value of the stock is "the price paid by [Bergquist] for substantially all of the assets of [the company] plus the value of the assets retained by [the company] less the total amount of liabilities that [the company] had on April 21, 2006."
Specifically, the company argues: 1) it had no earnings for the years preceding April 21, 2006; 2) there is no evidence that it ever paid a dividend to its shareholders; 3) since no dividend was paid, there is no evidence of a rate that can be utilized to establish any value; 4) actual earnings were less than the expenses incurred throughout the five-year period preceding April 21, 2006; 5) in the first quarter of 2006, the company was without the financial resources to raise capital, make payroll, pay rent or to fund the performance of its then outstanding contracts; 6) in the absence of actual positive earnings, there is no capitalization factor that, applied to positive earnings, can produce a positive value; 7) the likelihood of accumulated surplus earnings as of April 21, 2006, was negative if that likelihood was to be based on actual past earnings and dividends paid; 8) the accumulated surplus earnings for the company were negative between 2002, and December 31, 2005; 9) the company's ability to sustain its operation for the five-year period prior to April 21, 2005, was dependent upon its ability to obtain loans and equity investments, and the company was unable to raise any equity from its January 6, 2006 stock offering, which also precluded the company from borrowing; 10) the company's current liabilities exceeded its assets, and the company had no reserves for contingencies; and 11) the "basic condition" of the company from December 31, 2003 through April 21, 2006, was that it was on the verge of "going under," which the defendants allegedly concede.
In the defendants' post-trial memorandum, they also note that the trial court has the discretion to accept certain testimony and valuation methods. Regarding the company's case, the defendants note that the company failed to provide any expert opinion on valuation and instead relied on "self-serving testimony of `insiders' who benefitted from the dilution of value in the asset sale to justify the penny a share valuation." In contrast, the defendants rely on "historical prices" to estimate the fair value of the stock. The defendants also rely on General Statutes § 33-900 to argue that the court may take wrongful conduct into account when determining "fair value." The defendants claim that the company cannot refute the historical trend of the stock prices and suggest that Peter Turner's testimony that the company would have filed for bankruptcy in lieu of the asset sale is nothing more than "rank speculation." The defendants also claim that the company chose to ignore over six million dollars in assets allegedly reported to the Internal Revenue Service in 2006, which it had before the asset sale. Moreover, the defendants claim that the one cent valuation is "simply unrealistic" because it suggests that the company "could be purchased in its entirety for less money at that value than the price paid for the assets actually sold." Additionally, the defendants claim, the company failed to produce evidence at trial to justify "why Bergquist would overpay so much for its assets," and there is "no objective evidence . . . that the company faced bankruptcy in 2006 any more than it did in 2004, when it sold its shares for [sixty-five cents per share]."
The defendants also characterize the company's bankruptcy claim as an "obvious and disingenuous attempt to distract the court from the fact that [the company] chose to structure a sales transaction that assured it lacked liquidity to pay the defendants `fair value' for their shares after the asset sale, which explains the penny valuation." The defendants claim that the company had "no intention of raising sufficient funds to avoid the asset sale" as of January 2006, the company did not seek out buyers other than Bergquist, and the fair value of the stock was "diluted" as a result of "dealing with an insider like Bergquist beginning in 2005, as opposed to a neutral buyer in the open market place." The defendants argue that the company's officers let Bergquist control the terms of the asset sale because those officers would receive substantial benefits as a result of the sale, unlike the defendants. Although the defendants' assertion that the one cent valuation is inconsistent with the historical trend of the share prices, they argue that even if the company's internal balance sheet is accurate, there is no reasonable basis for the one cent valuation, which they claim is thirteen cents a share under the net asset valuation methodology. The defendants also allege that the company's transaction with Bergquist "has all the indicia of a fraudulent transfer" under General Statutes § 52-552e.
The defendants define the "net asset value" from Black's Law Dictionary, as "the market value of a share in a mutual fund, computed by deducting any liabilities of the fund from its total assets and dividing the difference by the number of outstanding fund shares." Black's Law Dictionary (9th Ed. 2009).
In a post-trial rebuttal memorandum dated December 11, 2009, the company argues, inter alia, that there is no evidence to support claims that any alleged, "self-serving" transactions impacted the fair value of the stock. On December 15, 2009, the defendants filed a reply memorandum in which they argue, inter alia, that the company ignores central concepts of "fairness" and "equity" that are essential to Connecticut's appraisal right statutes. The defendants urge the court to reject the company's various accounting principles because those methods were not explained through expert witness testimony, which the defendants claim is required. The defendants note: "In essence, [the company] is asking this court to do what no court has done in the past twenty years; find that minority shareholders' stock had no value immediately before the asset sale where the majority shareholders reaped valuable hidden benefits in the transaction." The defendants urge the court to find that the fair value of the stock is not less than eight cents per share, before accounting for the company's alleged wrongful conduct.
III CONCLUSIONS OF LAW FINDINGS OF FACT A Going Concern
Based on the applicable legal standards, the court agrees with the company's conclusion that a threshold determination is whether the company was of a "going concern" immediately before the effectuation of the corporate action to which the defendants object. Given that the Supreme Court has recognized that a "going concern value . . . has been sometimes used to broadly encompass all those factors which contribute to the value of the enterprise apart from its physical assets"; Gray Line Bus Co. v. Greater Bridgeport Transit District, 188 Conn. 417, 422, 449 A.2d 1036 (1982); the court concludes that the company was of a "going concern." This conclusion is based on various testimony adduced at trial. Peter Turner, who was involved in the asset sale, testified that the company was a "synergistic" counterpart to Bergquist and that Bergquist saw potential value in the company's developing technology, which is one of the reasons Bergquist was interested in acquiring the company's assets. Specifically, Turner testified that "Bergquist had a strong interest in our technology . . . because of the synergies of the two products. They had, prior to these discussions, made an investment in the company, because they liked the technology substantially." Additionally, Turner testified that "Bergquist, just like [the company's] officers and directors and employees, realized that there was a technology that had a lot of potential, but we had not been able to capitalize or commercialize that potential. Bergquist didn't know if they could capitalize on commercializing that potential, but they were willing to take that risk." James Plewacki testified that Bergquist was "purchasing the business . . . with the assumption that we were going to run it forward as a going concern." Plewacki also testified that there may have been some "nominal value" in the company's patents, and that the licensing agreement that Bergquist had with the company, which dated back to August, 2005, "tapped the expertise of the [company's] employees." Finally, Plewacki responded affirmatively when asked whether the primary reason or asset that Bergquist was interested in was the company's key employees. All of this testimony collectively establishes that the company had value apart from its physical assets. As a result, the company was of a "going concern" immediately before the asset sale.
B Fair Value
Since the court has concluded that the company was of a "going concern," the next question is the appropriate valuation method and the fair value of the stock at issue. Both parties concede that the court has the discretion to choose the most appropriate valuation based on the facts found at trial. Although the parties spend a great deal of time arguing as to whether either side was required to put on expert testimony at trial, nothing in the applicable statutes requires either party to put on expert testimony. Moreover, although the company argues that the defendants have the burden of proving that the fair value of the stock is contrary to the company's determination, it does not advance binding legal authority to support such a conclusion. Furthermore, the applicable statutes do not support this theory. Accordingly, the court is left to determine the fair value of the stock based on the evidence and testimony submitted at trial and the facts found.
Although Connecticut courts have not addressed the burden of proof in appraisal actions, one Delaware court has noted that: "In a statutory appraisal proceeding, both sides have the burden of proving their respective valuation positions by a preponderance of the evidence . . . If neither party satisfies its burden, however, the court must then use its own independent judgment to determine fair value." Dobler v. Montgomery Cellular Holding Co., Inc., 2004 WL 2271592 (Del. Ch. Sept. 30, 2004), aff'd, 880 A.2d 206 (Del. 2005).
At the outset, it is noted that regardless of the valuation method chosen, the court will not take §§ 33-900 and 52-552e into account in determining the fair value of stock in this appraisal action, despite the defendants' arguments otherwise. The defendants rely on these statutes to argue that the court should take the company's "wrongful conduct" into account when determining fair value. Appraisal actions are governed by §§ 33-855 through 33-872. Section 33-900 governs fair value in the context of a dissolution action, not an appraisal action. Moreover, that section does not include a definition of fair value, unlike the appraisal section of the General Statutes. Additionally, § 52-552e, which pertains to the Uniform Fraudulent Transfer Act, is also irrelevant in the present matter. The defendants presented minimal, if any, evidence from which the court can conclude that fraudulent activity was behind or implicated in the valuation or the asset sale. Aside from Heidi Newberg's testimony, during which she suggested that the company's valuation was suspect and questioned the motivations behind the asset sale, the defendants never presented documentation or any other evidence from which the court may find that self-dealing or fraudulent activity was involved in the company's valuation of its stock or the asset sale. Instead, the defendants discussed these concepts in their post-trial memoranda. The court will not infer fraud or self-dealing in the absence of credible evidence.
Even if the court refuses to find wrongful conduct in the company's assessment of fair value, this does not mean that the court must accept the company's conclusion as to the stock's fair value. As already noted by the parties, the court has the discretion to chose the most appropriate valuation based on the facts found in this case. Thus, based on the following exhibits, as well as supporting Connecticut case law, the official comments to the Model Business Corporation Act and the parties' recognition of this valuation method, the court concludes that the "net asset value" method, or the sale price of the business assets less its liabilities, is the most appropriate valuation method in the present matter. In determining the company's "net asset value," the court relies on the following exhibits, which are probative: plaintiff's exhibit 1 (the February 8, 2006 letter from Bergquist to the company outlining the terms of the asset sale), plaintiff's exhibit 4 (the asset purchase agreement between the company and Bergquist), plaintiff's exhibit 9 (the July 12, 2006 letters from the company to the defendants), plaintiff's exhibit 20 (the company's income statement for periods ending December 31, 2004, December 31, 2005 and April 21, 2006; the company's balance sheets for the same period; and a statement of changes in the shareholders' equity from January 1, 2005 through April 21, 2006), and the defendant's exhibit Y (the 2006 corporate tax return). Additionally, the court relies on I.R.S. form 8594, which is included in defendant's exhibit Y, in which the plaintiff asserts that the total value of the assets transferred from the company to Bergquist was $6,881,851. The court concludes that this sale price includes the value of the earnout provision in the asset purchase agreement. Moreover, the court relies on the balance sheet contained within the plaintiff's exhibit 9 (the July 12, 2006 letters from the company to the defendants) in which the company's total liablities are stated at $6,306,411. It is undisputed that the number of outstanding shares of stock immediately before the sale to Bergquist was 6,838,531 shares. Thus, the asset value coincides with the sale price as indicated in I.R.S. Form 8594.
It is interesting to note, however, that in their briefs, both the company and the defendants identify a valuation method that is akin to the Supreme Court's "net asset value." The company recognizes that "the market value of its stock . . . [the] value of assets, [the] book value, liabilities, [and the] net asset value" are all factors that the court may consider in valuing the stock of a closely held business in an appraisal action. Additionally, the company suggests that a "reliable factor" upon which the court may use to determine the fair value of the stock is "the price paid by [Bergquist] for substantially all of the assets of [the company] plus the value of the assets retained by [the company] less the total amount of liabilities that [the company] had on April 21, 2006." Likewise, the defendants identify the "net asset value" method, as defined in Black's Law Dictionary, in their post-trial memorandum.
CONCLUSION
As a result of these probative exhibits, the court concludes that the sale price ($6,881.851) of the company, less its liabilities ($6,306,411) before the sale date and divided by the number of outstanding shares (6,838,531) results in a per share price of $.084 dollars per share. Thus, the value of Heidi Newberg's 51,200 shares is $4300.80, the value of Lee Newberg's 51,200 shares is $4300.80, the value of Michael Marvin's 204,167 shares is $17,150.028 and the value of Nancy Lawson's 5000 shares is $420. See addendum. Finally, the court must include 8% statutory interest for each year, per General Statute § 37.1. The asset sale occurred on April 21, 2006, almost four years ago. As a result, this adds: $1376.29 in interest to Heidi Newberg's shares, bringing her total stock value to $5677.80; $1376.29 in interest to Lee Newberg's shares, bringing his total stock value to $5677.80; $5488.01 in interest to Michael Marvin's shares, bringing his total stock value to $22,638.04; and $134.40 to Nancy Lawson's shares, bringing her total stock value to $554.40. See addendum. It is noted that the company has already paid Heidi Newberg, Lee Newberg, Michael Marvin and Nancy Lawson, $524.80, $524.80, $2092.72 and $51.25, respectively. Thus, the fair value, as found here, must be reduced by these amounts. As a result, Heidi Newberg, Lee Newberg, Michael Marvin and Nancy Lawson are entitled to an additional $5152.29, $5152.29, $20,545.32 and $503.15, respectively.
So Ordered.
Addendum
Name #Shares @ $.084 8% Interest Total Already Paid Owed
The interest owed was calculated by multiplying the total amount of the shares at $.084 by 8% over four years (April 2006-April 2010).