Holmes never lied in the financial statements. That was true in 2019.
What Holmes didn't say was:
* That was 35% of Cyrcadia common stock, not 35% of the Cyrcadia company -- Holmes also sold a lot of Series A Preferred stock in Cyrcadia.
* Some if not all of those Cyrcadia common shares owned by LLBO were Restricted and Holmes never revealed what the Restrictions were. If the Restrictions were event-driven, like for example FDA submission or completion of clinicals, then the stock is worthless because those events will never happen. If the Restrictions were time-driven, then MAYBE the Restrictions have been lifted, but it's doubtful. Besides -- who would buy that Cyrcadia common stock now?
I'm sure LLBO still owned that Cyrcadia common stock (about 12M shares) when Acropolis took over. But the LLBO books must be a mess. Holmes never had Cyrcadia pay LLBO the remainder of the money from the Asset Transfer Option Agreement, and LLBO still owed $390,000 as of that last 2019 financial statement. The $332,607 "Advances Payable" in particular is suspicious - "payable upon demand" is scary.
Acropolis wants the cash from Cyrcadia and they want that debt to go away. Holmes wants to keep his 180M shares of LLBO. They must have worked out a deal but we won't know what that deal was because nobody is talking. All we can do is read the Form 10 if/when it gets filed and see what is left in the LLBO shell.
Best guess: Acropolis gave the Cyrcadia stock back to Holmes or maybe to the un-named "Advances Payable" lender, cancelled the Cyrcadia debt, and let Holmes keep some of his 180M LLBO shares, maybe even lifting the Restriction. In return, the LLBO debt is all gone, and LLBO is now a clean shell with no assets and no dent.
Keep in mind that KATX had assets and debt when they went dark, and when they emerged as a shell they had neither. Same for KAST, pretty much, albeit a different story because they didn't have to go the SEC route. And KAST now has that Acropolis convertible note.
