SpongeTech Delivery Systems, Inc. (OTC Bulletin Board: SPNG) and R.M. Enterprises International Inc. (RM) have entered a Settlement Agreement with GetFugu, Inc. Previously, on September 8, 2009, SpongeTech announced they intended to invest $4 million into GetFugu's mobile-based web search and e-commerce technology. An aggregate amount of $1,750,000 was advanced to GetFugu in anticipation of the entry into a definitive investment agreement.
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On September 24, 2009, SpongeTech announced the rescission of investment plans in GetFugu. GetFugu also told SpongeTech they did not have the funds to repay the $1,750,000 and they were seeking alternative financing sources to fund a reimbursement. SpongeTech than filed a lawsuit in the U.S. District Court for the Southern District of New York against GetFugu. The lawsuit was for an alleged breach of contract, breach of fiduciary duty, common law fraud, conversion, willful misconduct and unlawful appropriation of funds by GetFugu.
Pursuant to the Settlement Agreement, GetFugu agreed to issue to SpongeTech and RM an aggregate of 5,250,525 shares of common stock of GetFugu in return for the $1,750,000 which GetFugu received.
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