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EX-32 - EXHIBIT 32 - NEW BASTION DEVELOPMENT, INC.nbdi063011q_ex32z1.htm
EX-31 - EXHIBIT 31.2 - NEW BASTION DEVELOPMENT, INC.nbdi063011q_ex31z2.htm
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10-Q - QUARTERLY REPORT ON FORM 10-Q - NEW BASTION DEVELOPMENT, INC.nbdi063011_10q.htm
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v2.4.0.6
Commitments And Contingencies
6 Months Ended
Jun. 30, 2011
Notes to Financial Statements  
Commitments And Contingencies

NOTE 7 – COMMITMENT AND CONTINGENCIES

 

Somerset Financial Lawsuit

 

In October 2010, Somerset Financial Group Pension Trust sued New Bastion Development, Inc. Elliot Bellen, Laurie Bergmann and William Troy for the alleged breach of a promissory note in the amount of $72,500 plus interest, court costs and attorney’s fees.  The promissory note is secured by 24 property lots with a recorded value of approximately $240,000 as of December 31, 2010.  On March 20, 2012, Somerset received a Final Judgment of Foreclosure in the amount of $150,853.32 and the 24 Compass lots that are secured by lien are scheduled to be sold at a public auction on April 19, 2012 to the highest bidder. The Company and Somerset are currently in discussions to resolve the matter and to avoid the auctioning of the properties.

Employment Agreements

 

On February 9, 2011, (employment date or grant date) NB Regeneration, a wholly-owned subsidiary of the Company entered into a five year employment agreement with Michael Sydow to serve as NBR’s Chief Executive Officer.  Upon execution, the Company granted 5,000,000 shares valued, for financial accounting purposes on the grant date at the contemporaneous private placement price of $0.25 per share for a total $1,250,000. The shares vest to Mr. Sydow as follows:   September 1, 2011, 1,000,000 shares; Upon the occurrence of the execution of a binding definitive agreement with Panamanian partners relative to the South American fertilizer project, 2,000,000 shares; 500,000 shares annually on the contract anniversary date years 2-5.  Under ASC 718 "Compensation - Stock Compensation", the Company will recognize the $1,250,000 value as follows: $250,000 on the September 1, 2011 vesting date; $500,000 upon satisfaction of the performance condition; and $500,000 pro rata over the 4 year vesting period. On the employment agreement date, subject to continued employment, Mr. Sydow was also awarded  2,000,000 common stock options that cliff vest 500,000 per year over four years with first vesting date on January 13, 2012.  The options each have a term of one year from the vesting date and have exercise prices of $0.50, $1.00, $1.50 and $2.00 for each 500,000 that vest, respectively.  However in January 2012, the Company and Mr. Sydow agreed to delay any vesting of stock and options as delineated in the employment pending an amendment to the employment agreement or reshaping of their association. The value of these options on the grant date was approximately $490,000 based upon the following range of Black-Scholes assumptions; Exercise prices from $0.50 to $2.00, volatility from 372% to 448%, expected term based on simplified method from 1 to 2.5 years and discount rate averaging 0.81% and is to be recognized in years one through four, respectively, approximately $121,000, $121,000, $123,000 and $125,000.

 

On May 16, 2011, the Company entered into a five year employment agreement with Elliot Bellen to serve as the Company’s Chief Executive Officer.  On the employment agreement date, subject to continued employment, Mr. Bellen was awarded  2,000,000 common stock options that cliff vest 500,000 per year over four years with first vesting date on January 1, 2012.  The options each have a term of one year from the vesting date and have exercise prices of $0.50, $1.00, $1.50 and $2.00 for each 500,000 that vest, respectively.  The value of these options on the grant date was approximately $486,000 based upon the following range of Black-Scholes assumptions; Exercise prices from $0.50 to $2.00, volatility from 353% to 430% expected term based on simplified method from 1 to 2.5 years and discount rate averaging 0.81% and is to be recognized $119,000, $121,000, $122,000 and $124,000 approximately in years one through four, respectively.

 

BP Claim

 

In May 2011 the Company filed a claim with the Gulf Coast Claim Facility (“GCCF”) for profits lost that resulted from the BP/Deep Horizon oil spill that occurred on April 23, 2010.  In its claim the Company alleges that it suffered significant economic losses as a direct result of the oil spill.  The GCCF has conditionally denied the Company’s claim pending the submission, by the Company, of further documentation.  In August 2011 pursuant to GCCF’s request, the Company provided the requested documentation. Subsequent to providing additional documentation, the Company’s claim was denied.  BP is currently negotiating a settlement with a class of most private economic damage and medical claims plaintiffs estimated to be approximately $7.8 billion. The Company, and is currently waiting for that process to be completed prior to determining the best course of action to pursue its claims.

Memorandum of Understanding

 

In May 2011, NB Regeneration entered into a Memorandum of Understanding with United Advisory, a Panamanian corporation that was formed to own and construct an ammonia and urea facility in the Republic of Panama, in the Free trade Zone.  Under the terms of the agreement certain financial partners will subscribe to United Advisory and contribute sufficient funds to complete construction of the Outer Battery Limits (OBL) which are estimated to cost between $300-$500 Million, and NB Regeneration has undertaken to arrange debt financing for the facility, supervise the development of construction, contract for feedstock and raw materials, market and sell the products from the operation of the facility, and to manage the facility's day to day operation upon completion.  NBR shall receive a 51% interest in United Advisory and its financial partners shall receive a 49% interest. Both parties to the MOU are currently waiting for the Panamanian government to legally recognize the Pan American Economic Industrial Free-Trade Zone (“PEIZ”) to finalize and formalize its transaction. As there can be no assurances that such action shall ever occur, the Company has decided to explore the pursuit of an alternative location of the facility in the Colon, Free Trade Zone (“CFTZ”) in the Republic of Panama.