JUNO BEACH Fla., July 28, 2010 (GLOBE NEWSWIRE) -- Recently, Exterra Energy filed an 8-K alleging that AOS and its staff committed fraud against them.
AOS feels it is necessary to address the acquisitions and defend the company's reputation and denies the allegations. Below is AOS's version of recent events.
Background
In July 2009, The Chairman of the company, Bob Royal, and its President, Todd Royal, approached AOS to assist Exterra Energy in various services and to introduce them to brokers and potential investors. The Exterra team presented AOS with a power point presentation claiming that Exterra Energy's assets were worth $28 million. Exterra Energy explained that based on the fact that the outstanding stock count was approximately seven (7) million shares, and they had $28 million in assets, their stock was worth $4.00/ share and that's the price they wanted the brokers to use to raise money for the company.
AOS provided services and introduced Exterra to brokers, potential investors and individuals who are interested in small public companies. Among the brokers was Ishmael Abdel Fatah, who works for a reputable brokerage firm by the name A.M. Financial. Ishmael agreed to offer the stock to his clients and raise $3 million, providing that Exterra Energy would explain the use of funds and subject to other terms that were provided in the term sheet executed by the parties. Within days of issuing the stock to the investors, the company failed to file its annual financial report (SEC Form 10-K) which prompted the authorities to put the company on probation to be delisted (add an E to the stock). It took the company close to 30 days to cure the deficiency.
AOS determined that the reason for the late filing was that Exterra Energy's auditors would not sign off that the assets are worth $28 million. It was determined that the assets of Exterra were worth less than $4 Million. After Exterra Energy filed its late annual financials, it was determined that Exterra had also failed to file the required certification documents on those financials and the company's ticker was again appended with an E, denoting its failure to properly file required disclosures. When it became evident to us that the management misled AOS about its assets, would not disclose the use of funds, was only interested in managing the stock price and the market and not managing the company, it was AOS's decision to withdraw from the transaction.
AOS provided Exterra one year of services and paid expenses on their behalf. AOS received 500,000 shares, but returned 250,000 to Exterra and was further instructed by the company to deliver 250,000 to an individual by the name Tom Reid. Mr. Reid is neither an employee nor agent of AOS. As for Ishmael, he started collecting the stock from his investors and sending the stock back to Exterra; however the company and its broker refused to accept it.
Contrary to the claims of Exterra, Administrative Outsource Services, Inc. at all times acted appropriately and honestly. We will defend ourselves and we reserve our right to pursue anyone who falsely accuses us.