Then this by worktoplay - What just happened...Back in April, a reorganization agreement was put in place, whereby Sun City would acquire the Chinese company in exchange for issuing 34,880,000 shares of common stock. That agreement was subject to the conditions listed below and as of this date has not closed.
Today's announcement moved Mannion out of the way and moved Charles Scimeca, the Consultant named below, into control of Sun City. So what should we expect to happen next?
ARTICLE THREE
SPECIAL CONDITIONS
3.1 Conditions to Closing
A. The obligations of each Party to this Agreement are subject to the condition precedent that the other Party's representations and warranties contained in this Agreement shall be true, correct and complete on and as of the date of Closing with the same effect as though such representations and warranties were made on and as of such date.
B. At the time of closing, all the original officers, directors, and employees of the Corporation shall have completed their legal resignations. (Done)
C. Prior to Closing, the Corporation's Director shall elect Dr. Tony N. Frudakis, Ph.D., Wenxia Guo, Peiyi Tian, Jianjun Liu, and Huimin Zhang to serve as members of the Board of Directors. Dr. Tony N. Frudakis shall serve as a director of the Board for the next two years without compensation. (Done)
D. The Corporation, as of the closing date, is fully reporting under the Securities Exchange Act of 1934, as amended and is currently trading on the over the counter bulletin board (OTC-BB). (Done)
E. Concurrent with the Closing, the Corporation shall:
(i) Transfer 34,880,000 shares of the outstanding shares of common stock of the Corporation to the Subscriber;
(ii) Transfer 1,400,000 shares to be held in escrow for the benefit of Consultant or its assigns by Anslow & Jaclin, LLP until completion of funding for the post reorganized corporation of at least Four Million USD ($4,000,000) within four (4) months of the effective date of the registration statement on Form SB-2, or any other acceptable registration statement, to be paid for by the Corporation. If the Consultant or its assigns fails to raise the above amount of funds for the reorganized corporation within the above stipulated time, it shall result in the unconditional transfer of the 1,400,000 shares to the Subscriber, and shall forfeit its right to an additional three million warrants set forth hereinafter in 3.1 E(iii). If the Consultant or its assigns fulfills the funding responsibilities for Four Million USD ($4,000,000) set forth herein within the stipulated time, the Consultant or its assigns shall be entitled to the release of the 1,400,000 shares as well as an additional three million warrants as set forth. Any of the participants related to this Agreement shall not be entitled to transfer, deposit or deal with this 1,400,000 shares without prior written consent from the Consultant and Corporation (post reorganization).
(iii) The Consultant shall be responsible for providing sources in raising the four million (USD) in capital and the Corporation shall be responsible for completing the registration of shares noted on Schedule B with the Securities and Exchange Commission to register the shares noted on Schedule B.
Financing method:
(1) If the financing of at least $4 million is arranged by Consultant in equity capital of 4 million shares of the Subscriber and the final financing amount reaches $5,000,000 USD, $1 million or any part thereof of that amount exceeding $4 million USD shall be paid to Consultant and exclusively used on behalf of the Corporation for its business activities related to this Agreement (such as promotions). This amount shall be paid to Consultant to perform such services set forth in the Consulting Agreement. Any financing amount exceeding $5 million shall be owned by the Corporation (post reorganization); (2) If the financing is fulfilled by the Consultant's sources in a loan of up to $10 million at the current prevailing market rate with 4 million shares of the Subscriber as collateral, 1.5% of the loan amount exceeding the $ 4 million financing amount shall be granted as a service fee to the Consultant in a lump sum payment. Neither the shareholders, nor the Corporation, nor the consultant shall be entitled to transfer or deal with the 4 million shares as collateral.
The Financing herein before shall be SEC compliant and shall not cause lawsuits to the Corporation (post reorganization). Four (4) million shares of Subscriber's stock shall be registered and allocated for this purpose. In no event, shall the Consultant act as a broker/dealer in connection with such funding obtained as a result of Consultant's sources on behalf of Subscriber.
After fulfillment of funding responsibilities set forth in 3.1E(ii) set hereinbefore, Consultant shall be entitled to an additional three million warrants as follows:
500,000 shares at the exercise price of $.75 per share, when the price of the Corporation's (post reorganized) shares of common stock close at or above $.75 within four (4) months of the effective date of the registration statement filed with the SEC, or such warrants will expire worthless.
800,000 shares at an exercise price of $1.50 per share when the price of the Corporation's (post reorganized) shares of common stock closes at or above $1.50 within six (6) months of the effective date of the registration statement filed with the SEC, or such warrants will expire worthless.
900,000 shares at an exercise price of $2.50 per share when the price of the Corporation's (post reorganized) shares of common stock closes at or above $2.50 within nine (9) months of the effective date of the registration statement filed with the SEC, or such warrants will expire worthless.
800,000 shares at an exercise price of $3.50 per share when the price of the Corporation's (post reorganized) shares of common stock closes at or above $3.50 within 12 months of execution hereof or such warrants will expire worthless.
All 3,000,000 warrants will be structured with cashless exercise language and the shares underlying the warrants will be registered in a registration statement filed with the SEC.
As set forth in Section 1.2 D., the reorganized Corporation shall execute a Consulting Agreement with the Consultant which shall relate to the Consultant obtaining financing for the Corporation (post reorganization).
(iv) Change the name of the Company to CHINA BIOTECH & PHARMACEUTICAL CORP.; and
(v) Obtain shareholder approval for all of the above.
F. The Corporation (post reorganization) shall take all corporate actions necessary to form a wholly owned subsidiary and to allow Consultant to complete a spin-off transaction whereby the Corporation will spin-off approximately 95% of the subsidiary and distribute approximately 5% of the subsidiary's common stock to the Corporation's shareholders on a pro-rata basis. Consultant shall have full authority to structure this transaction and will bear all related costs. This action shall not take place within the initial thirty (30) days after closing of this transaction. This action will comply with all the relevant rules and regulation and will not cause any liabilities and damage to the reorganized Corporation. This provision shall survive the closing of this transaction.
G. The reorganized Corporation shall execute a Warrant Agreement with Consultant.
BTW, according to the announcement, George Frudakis "loaned" the money to Coast to Coast Equity to make the transaction. He doesn't appear to have any other stake at this time. Charles Scimeca is the sole director, officer and shareholder of Coast to Coast Equity Group, Inc.
And as per the statement above, "C. Prior to Closing, the Corporation's Director shall elect Dr. Tony N. Frudakis, Ph.D., Wenxia Guo, Peiyi Tian, Jianjun Liu, and Huimin Zhang to serve as members of the Board of Directors. Dr. Tony N. Frudakis shall serve as a director of the Board for the next two years without compensation.", looks like that part of the agreement was taken care of today along with the resignation of the Officer and Director.
This company looks like it's going to be raising some cash and it looks like it will be SERIOUS cash. I'd be looking for the SEC filing indicating a close to the transaction, then the funding of the company within four months.
Anyone want to take a shot at explaining Item F. above, having to do with, "The Corporation (post reorganization) shall take all corporate actions necessary to form a wholly owned subsidiary and to allow Consultant to complete a spin-off transaction whereby the Corporation will spin-off approximately 95% of the subsidiary and distribute approximately 5% of the subsidiary's common stock to the Corporation's shareholders on a pro-rata basis..."???
Looks like one of those "big" moves to me, but I guess we'll have to just wait and see...
