How Gary killed CME
The issuance of Preferred Stock
- In March 2008 Gary Whiting sought the issuance of Preferred Stock from CMG for the purpose of selling the preferred stock to investors along with certain rights to name items in the Stargate Games.
- The terms of issuance and price for Preferred shares were determined by Gary Whiting.
- On March 31, 2008 CMG issued 20 million shares of CMG “series A” convertible preferred stock.
- Gary Whiting values the “Series A” shares at $0.20 a share and so the shares in total where worth $4 million.
- Pursuant to the New Garvick Subscription Agreement, Garvick Properties exchanged 2 million shares of CMG common stock in exchange for all 20 million shares of “Series A” stock.
- This new agreement increased from $18,437,500 to $20,937,500.
- Garvick Properties also obtained the rights to name up to 250 items in the Stargate Games.
- Garvick Properties defaulted and otherwise failed to make payments.
- Garvick Properties breached the New Garvick Subscription Agreement.
- Gary Whiting failed and refused to take action on Garvick Properties’ breach of the New Garvick Subscription Agreement.
- Due to this agreement CMG has been unable to utilize 20 million shares of Series A Stock to raise capital of about $4 million.
The Tax Credit Agreement
- Around June 10, 2008 CMG believed it was or may be eligible for certain tax credits.
- On June 10, 2008 Garvick Properties and CMG executed a document entitled “tax credit agreement” wherein Garvick Properties acquired the CMG Tax Credits.
- Garvick Properties would pay to CMG 50% of any investment funds Garvick Properties recieved from Garvick investors related to the CMG Tax Credits.
- It is believed Garvick Properties has never made any payments to CMG under the Tax Agreement.
- Due to this Tax Agreement CMG was unable to utilize the CMG tax Credits to raise capital.
- The Tax agreement deprived CMG of Corporate opportunity.
- The Tax Agreement was believed to be structured to benefit Gary Whiting and the defendants, to the detriment of CMG.
Handcranked Subscription Agreement
- CMG owns approximately 70% of Superstition Studios.
- Handcranked, Superstition Studios and Stargate Worlds were created for the development of Stargate Related Games.
- The agreement saw Garvick Properties acquired 17,960,000 membership units of Handcranked.
- The 17,960,000 memberships units of Handcranked represented all remaining issued membership units.
- For acquiring the membership units Garvick Properties were to pay $0.30 per share or $5,388,000 in the aggregate.
- before the agreement Garvick Properties acquired 39,100,000 membership units of Superstition Studios.
- The 39,100,000 membership units in Superstition Studios, Garvick Properties was to pay $0.30 per share or $11,730,000 in the aggregate.
- Pursuant to the Handcranked Subscription Agreement, Garvick Properties acquired 5,851,000 membership units of Stargate Worlds.
- The 5,851,000 membership units in Stargate Worlds, Garvick Properties was to pay $0.30 per share or $1,755,300 in the aggregate.
- The total purchase price for the membership units come to $18,873,300.
- Gary Whiting singed the agreement in October 2008 on behalf of Garvick Properties, Handcranked, Superstition Studios and Stargate Worlds.
- The named companies where executed a document entitles “Addendum to Subscription Agreement”.
- Garvick Properties didn’t have to pay the $18,873,300 immediately, they could pay it over 24 monthly installments.
- It is believed that Garvick Properties defaulted on the agreement and Addendum.
- It is believed that Garvick Properties didn’t have the money, assets or revenue to make the installment payments.
- Due to this CMG’s subsidiaries were deprived a corporate opprtunity.
- It is believed Gary Whiting planned to sell the available units under the agreement to benefit Garvick Properties, himself and his defendants.
Author: Aaron Meehan
Hi, I’m the creator of SG Gaming Info. When I’m not working on my writing or creating content for this site’s YouTube channel, I like to relax and enjoy character driven story games.