Item 1.02. Termination of a Material Definitive Agreement
The Contribution Agreement, a material definitive agreement not made in the ordinary course of the Company’s business to which the Company was a party, has been terminated. The information contained in Item 2.01 below relating to the various agreements described therein is incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets
RESCISSION OF THE CONTRIBUTION AGREEMENT
AND RETURN OF RELATED TRANSACTIONS
This section describes the material provisions of the Mutual Rescission And Release Agreement (“Rescission Agreement”), but does not purport to describe all of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of the Contribution and Subscription Agreement, a copy of which is disclosed as Exhibit 2.1 to the current report on Form 8-K filed on January 27, 2020. A copy of the Rescission Agreement is disclosed herewith as Exhibit 10.10 to this Form 8-K. Unless otherwise defined herein, the capitalized terms used below are defined in the Contribution Agreement and Rescission Agreement, respectively.
The Contribution Agreement
On December 5, 2019 (the “Closing Date”), the Company consummated the transactions with First Federal Management Group, Inc., a Utah corporation (“First Federal”) by which the parties entered into a Contribution Agreement. Pursuant to the Contribution Agreement, First Federal contributed, assigned and transferred to the Company assets consisting substantially of real property (the “Assets”). Property descriptions for the parcels held in fee simple are disclosed on Schedule 1 to the Contribution Agreement.
As part of the Contribution Agreement, First Federal executed deeds transferring the Assets from First Federal to the Company. Pursuant to the Contribution Agreement, First Federal contributed, assigned and transferred to the Company the Assets in exchange for the issuance to First Federal of 220,000,000 shares of common stock representing 95.2% of the issued and outstanding shares of the Company.
The Rescission Agreement
Effective as of February 24, 2020, the parties entered into the Rescission Agreement wherein the parties were required to unwind the Contribution Agreement and First Federal was required to transfer the 220,000,000 million Company common stock shares to the Company for cancellation and the Company was required to convey back to First Federal real property Assets as well as the rights to debt repayments. The conveyances required under the Rescission Agreement specifically included:
First Federal Conveyances to the Company
First Federal Delivery of 220,000,000 the Company Shares. The Rescission Agreement required the parties to cause Colonial Stock Transfer Corp. (the “Transfer Agent”), as transfer agent for the 220,000,000 the Company Shares, to transfer the 220,000,000 the Company Shares from First Federal to the Company. The shares are to be cancelled and return to treasury.
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Company Conveyances to First Federal
The Eagle Mountain/Fairfield Property, as identified in the Contribution Agreement, was re-conveyed by a Special Warranty Deed for the Eagle Mountain/Fairfield Property in the form of the Special Warranty Deed executed in connection with the Rescission Agreement.
The Kamas Property, as identified in the Contribution Agreement, was re-conveyed by a Special Warranty Deed for the Kamas Property in the form of the Special Warranty Deed executed in connection with the Rescission Agreement.
The Cummings Contract, Green Haven Assignment, the Geneva Note, the Green Haven Note and the Green Haven Deed of Trust, all as defined below, were assigned by the Company to First Federal by Assignment and Assumption of Contracts dated February 24, 2020, filed with this Form 8-K as Exhibit 10.11 (“Assignment Agreement”) duly executed by the Company and pursuant to which the Company assigned to First Federal and First Federal assumed from the Company, all of the Company’s right, title and interest in and to the following:
(i)the Real Estate Purchase Contract for Land, having an Offer Reference Date of August 14, 2019, between Assignor, as Buyer, and D. LaVell Cummings, as Seller, pertaining to the purchase and sale of approximately 160 acres of land (Parcel No. 59-019-004 and 59-019-005) for Two Million Four Hundred Thousand and 00/100 Dollars ($2,400,000.00) (the “Cummings Contract”);
(ii)the Agreement Regarding Assignment and Assumption of Real Estate Contract, by and between Atlanta Income & Asset Group, Inc. and Green Haven Homes, LLC, dated May 30, 2019 (the “Green Haven Assignment”);
(iii)that certain Promissory Note dated as of the Closing Date made by Geneva Family Assets, LLC, a Utah limited liability company, in favor of Atlanta Income & Asset Group, Inc. (the “Geneva Note”); and
(iv)that certain Promissory Note (the “Green Haven Note”) and Deed of Trust (the “Green Haven Deed of Trust”) executed by Green Haven Homes, LLC (“Green Haven”), in connection with the sale of the real property located Nibley, Utah (the “Nibley Property”), contributed to the Company in connection with the Transaction and subsequently sold by the Company pursuant to that certain Real Estate Purchase and Sale Agreement, by and between Atlanta Income & Asset Group, Inc. and Green Haven, dated May 28, 2019, as amended prior to the date hereof (the “Green Haven Agreement”).
The Geneva Note and Green Haven Note, duly endorsed by the Company in favor of First Federal (the Company not being in possession of the originals) was provided to First Federal in connection with the Rescission Agreement.
Board Resignations
Resignation of First Federal Officers and Directors. Keven Walgamott, Paul Simms, and Joshua Turnbow were required to resign from all officer and director positions at the Company if they had not already done so.
The foregoing description of the Rescission Agreement does not purport to be complete. For further information, please refer to the copy of the Rescission Agreement, and exhibits thereto, that is filed as Exhibit 10.10 to this Report. There are representations and warranties contained in the Rescission Agreement that were made by the parties to each other as of specific dates. The assertions embodied in these representations and warranties were made solely for purposes of the Rescission Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating their terms. Moreover, some representations and warranties may not be accurate or complete as of any specified date because they are subject to a contractual standard of materiality that is different from certain standards generally applicable to shareholders or were used for the purpose of allocating risk between the parties rather than establishing matters as facts. For these reasons, investors should not rely on the representations and warranties in the Rescission Agreement as statements of factual information.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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The following table sets forth as of March 2, 2020, the number of shares of the Company’s common stock, par value $0.001, owned of record or beneficially by each person known to be the beneficial owner of 5% or more of the issued and outstanding shares of common stock, and by the Company’s sole officer and directors, and by all officers and directors as a group. On such date there were 11,000,000 shares of the Company’s common stock issued and outstanding.
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Name
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Title of Class
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Amount and Nature of Beneficial Ownership(1)
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Percentage
Of Class
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Mark Scharmann, CEO and Director
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Common Stock
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5,275,000
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47.95%
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Elliott N. Taylor, Director
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Common Stock
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4,725,000
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42.95%
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All Executive Officers And
Directors as a Group
(2 Persons)
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Common Stock
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10,000,000
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90.91%
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(1)As reported above, the term “beneficial owner” is defined broadly under Exchange Act Rule 13d-3 to include “any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise” has or shares voting or investment power with respect to a registered equity security.
Change of Control
As a result of the return of the 220,000,000 Company shares back to the Company for cancellation, a change in control of the Company occurred as of February 24, 2020. Except as described in this Report, no arrangements or understandings exist among present or former controlling shareholders with respect to the election of members of our Board and, to our knowledge, no other arrangements exist that might result in a change of control of the Company.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors, Executive Officers and Significant Employees
Below are the names of and certain information regarding the Company’s current executive officers and directors who were appointed effective as of the closing of the Asset Transfer:
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Name
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Age
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Positions Held with the Registrant
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Mark A. Scharmann 61 Director, President and Chief Executive Officer,
Secretary/Treasurer
Elliott N. Taylor61Director
Biographies of Directors and Executive Officers
Mark A. Scharmann. Mark A. Scharmann. For the past several years Mr. Scharmann has been a private investor in residential real estate and private and public companies. Mr. Scharmann became interested in investing in emerging growth companies in December 1979 while attending Weber State College. He compiled and edited a publication titled Digest of Stocks Listed on the Intermountain Stock Exchange (Library of Congress Cat. No. 80-82407). In 1981, he compiled and edited an industry directory called the OTC Penny Stock Digest (Library of Congress Cat. No. 80-82471). For the past several years Mr. Scharmann has also consulted with both public and privately held companies relating to management, mergers and acquisitions, debt and equity financing, capital market access, and introductions to investor relations groups. In addition to being and officer and director of Bioethics, Ltd., Mr. Scharmann is an officer and director of Spirits Time International, Inc., a beverage industry company listed on the
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OTC Markets under the symbol (“SRSG”). He is an officer of Roycemore Corporation, a private firm specializing in the development and acquisition of self-storage facilities. Mr. Scharmann was a co-founder of Bio-Path Holdings, Inc., an oncology-focused biotechnology company. He was a co-founder of wffl.com, a youth sports information web site. He graduated from Weber State University, Ogden, UT in 1997 with a Bachelors of Integrated Studies Degree in Business, Psychology and Health Education.
Elliott N. Taylor. Since 2012, Mr. Taylor has been the manager and founder of IF Group, LLC, the operator of e-commerce website bariatriceating.com. IF Group, LLC, supplies nutritional food supplements, flavored protein powders and ready-made drinks formulated to address deficiencies found in individuals that have undergone bariatric weight loss surgery. Since 1987, Mr. Taylor, a licensed lawyer in the state of Utah, has provided legal and business consulting services to clients in a wide range of corporate and securities law matters, including representation in connection with acquisitions, mergers and change-of-control transactions. Mr. Taylor has also provided legal services with respect to initial and follow-on public offerings; limited or private offerings; debt and equity financings, periodic reporting compliance, secondary trading and blue sky requirements; general consultation regarding capital formation, securities law compliance; corporate governance, internal controls, and compliance matters. Mr. Taylor’s clients have been high technology, alternative energy, real estate development, venture capital, environmental remediation, mining and medical technology businesses located in the United States, Mexico, Canada, China, and the United Kingdom.
Item 5.01. Changes in Control of Registrant
As a result of the Rescission Agreement, Bioethics experienced a change in control with control of us reverting back to Mark Scharmann. The disclosure set forth in Item 2.01 to this Report is incorporated into this item by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 21, 2020, Keven Walgamott and Paul Sims resigned from all director and officer positions at the Company.
Item 5.06. Change in Shell Company Status
The information in Items 1.02 and 2.01 above are incorporated herein by reference. Following the transactions described above, the Company is again considered a shell company, as that term is defined in Rule 12b-2 under the Exchange Act.
Item 9.01. Financial Statements and Exhibits
Exhibits
Exhibit Description
No.
10.10Mutual Rescission and Release Agreement dated February 24, 2020
10.11Assignment and Assumption of Contracts dated February 24, 2020