Thanks for coming back, Avi. So long as you're here there's not much point to copying everything over to email.

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We introduced the management team of the club to JKP. JKP entered into a Letter of Intent to acquire the club.




Let me stop you for a second here. JKP seems to be very unfortunate in their business dealings, particularly when it comes to letters of intent (which are then trumpeted to the Adult industry and PRNewswire and then never heard about again). Correct me if I'm wrong, but the first appearance of this deus ex machina was in regard to the all-JKP cable channel. I'm told that this is no longer more than an idea, and a fairly vague one. Next, we have another letter of intent, this one for the nightclub--also trumpeted far and wide--which also turns out to be vapor, and it turns out it was JKP itself which pulled out of the deal for unknown reasons (Scott...?)

I believe the "clothing deal" (I presume you know what I'm talking about) was also based around a letter of intent. Now, I'm just a solicitor--Chicago firm, yes, University of Chicago School of Law, yes, but certainly not a friend of D'Amato's--but do so many deals so frequently turn out so dismal in the penny stock world? It seems that the only JKP announcement of business expansion which didn't bust, now that Keith Gordon has taken his toys and gone home and left that lonesome warehouse half-empty, is the deal to license content to a television station in Romania. I'll let that speak for itself.


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For putting the deal together and for supervising management here in NY, we were getting a small piece of the deal. JKP later decided to walk away before final execution, so instead we (meaning Maximum) decided to assume responsibility for whatever monies where forwarded (minimal - about $108,000) and took possession ourselves. If you want to know why JKP walked, ask the company themselves for the answer. It would not be fair for me to represent them in this regard.




That's completely understandable. However, I thought there was a bit more to this deal than that. From what I understand, you were to be loaned $500,000 for the JKP nightclub deal (though as this happened around the time JKP went public, I would expect that loan was to some degree on paper and no actual cash changed hands). When the deal went south, you entered some sort of closing agreement which tied up some loose ends, including Maximum's liability (I presume from your consulting contract) for the lawsuit filed against IDC Technologies, which JKP inherited. Is this an accurate narrative?

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I believe you should look deeper into the financials of the filings for the answer. Since you are an attorney this should be simple for you. I haven't looked lately but I believe most are attributable to "non-cash" items, such as the preferred stock and warrant issuances at below market. The vast majority of those losses are not related to cash flow loss, which is where I think you are heading with this. Surely, you know the difference.



That makes up a fair portion, but not even close to all the personal debt hurled into the black hole of JKP (pre-public incarnation) has been exchanged for stock. Bob made sure of that.

My question is, where is this capital intended to go except to pay back those who won't settle for stock options? According to the prospectus, JKP is still operating at a loss, has a shooting schedule almost precisely the same as the pre-public incarnation of JKP, and every other deal has fallen to pieces. Add that with three executives who together claim in excess of $1 million annually by themselves and zero noticable expansion for this orgy of swapping and selling and funding which you say took place. You certainly didn't invest in a company which was losing money to see it remain stationary.
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