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v2.4.0.6
Note 5- Acquisition and Disposal of Staffmd, Inc.
12 Months Ended
Dec. 31, 2011
Notes  
Note 5- Acquisition and Disposal of Staffmd, Inc.

NOTE 5– ACQUISITION AND DISPOSAL OF STAFFMD, INC.

 

On February 4, 2011, Generation Zero Group, Inc. entered into an Agreement and Plan of Merger (“Merger”) with StaffMD, Inc., a Georgia corporation.  Pursuant to the Merger Agreement, StaffMD was merged  into MedicalWork, LLC, a newly formed Georgia limited liability company, and the Company’s wholly-owned subsidiary.  MedicalWork was the surviving entity in the Merger.  As a result of the closing of the Merger, the Company acquired StaffMD’s business, which was a leading online job board for physicians.  In consideration for ownership of StaffMD and in connection with the Merger, Generation Zero Group, Inc. (a) issued 6,000,000 shares of the Company’s restricted common stock; (b) paid $100,000 in cash at the closing of the Merger; (c) provided a secured, subordinated Seller Note in the amount of $3,950,000 to the founder of StaffMD; and (d) issued 250,000 shares of the Company’s restricted common stock in association with a Third Party Promissory Note of $250,000 for working capital of the subsidiary.  The founder of StaffMD was the sole operating manager of the MedicalWork subsidiary and has had exclusive control over all bank accounts, marketing, expenses and operations related to the MedicalWork assets since the Merger occurred. 

Effective December 31, 2011, Generation Zero Group, Inc. assigned all of the membership interests in the wholly-owned subsidiary of MedicalWork to the original owner of StaffMD.  This assignment included all assets and associated debt and obligations created with the Merger. The Company has been indemnified by the assignee of the Medical Work membership interests from any obligations of the MedicalWork subsidiary with execution of the membership interest assignment, including full indemnification from the $250,000 Third Party Promissory Note issued at the time of the acquisition and the cancelation of the Seller Note.  The assignee has agreed to cancel 3,000,000 shares of the restricted common stock issued and received at the time of the Merger as part of the agreement. These shares have not been cancelled to date and have been included in the number of issued and outstanding shares disclosed in the attached financials. The assignee has further agreed to place into escrow 500,000 shares of the remaining restricted common shares received at the time of the Merger as collateral against any indemnity claims arising from potential claims against the Company associated with the formerly held MedicalWork subsidiary.