have had the auditor look at the corporate filings at TX SOS before announcing the closing, but there is a possibility that the Designation Tony filed for the Preferred B shares, which was about 3 weeks prior to that, wasn't posted at TX SOS at the time they looked. Tony filed in late mid-April 2014, and I want to say on the 20th. The auditor or his attorney could have looked in early April and not seen anything. It was announced they had a deal earlier than that.
On May 13, 2014 the Company completed the acquisition of a majority stake of Apple Rush Company, Inc., pursuant to a Memorandum of Understanding which the Company had disclosed on Form 8K filed on March 10, 2014.
Under the final terms of the transaction, the Company acquired from Robert Corr, the former CEO of APRU, and members of Mr. Corr’s family, 10,000,000 shares of super-majority convertible preferred stock (the “Preferred Stock”) and the “CANNA Bliss” and “CANNA Rush” trademarks for a purchase price of $50,000 and 4 million restricted shares of the Company’s common stock (a copy of the Stock and Trademark Purchase and Assignment Agreement is attached hereto as Exhibit 10.1). Each share of Preferred Stock has a face value of $1.00 and is convertible into APRU common stock at a conversion price equal to the average closing price of APRU for the ten (10) trading days immediately prior to a notice of conversion, less a discount of twenty percent (20%). As of May 13, 2014, the Preferred Stock was convertible into 18,115,942,028 shares of APRU and as of that date the Company provided to APRU a notice of conversion for 5,000,000 shares of the Preferred Stock convertible into 9,057,971,014 restricted shares of APRU. The Company also reached an agreement with APRU on May 13, 2014, to acquire from APRU 7,252,034,443 newly issued restricted shares of APRU common stock (the “Common Stock”) in exchange for 1,000,000 restricted shares of the Company’s common stock (a copy of the Stock Purchase Agreement is attached hereto as Exhibit 10.2). As a result of the conversion of the Preferred Stock and the acquisition of the Common Stock the Company owns 16,310,005,457 shares of APRU common stock representing approximately 77% of the outstanding common stock of APRU. Concurrent with the transaction APRU and Corr Brands, Inc. entered into a long-term license agreement whereby APRU shall be the exclusive worldwide licensee of the Apple Rush and Ginseng Rush branded products (a copy of the License Agreement is attached hereto as Exhibit 10.3).
The Company intends to treat the acquisition of the Preferred Stock and the Common Stock as an acquisition of property and APRU will continue to operate and trade as a separate public company
NOTE 6 – COSTS INCURRED IN CONNECTION WITH APPLE RUSH TRANSACTION Pursuant to the 8-K filed on August 14, 2014 on Form 8-K filed by the Registrant with the Securities and Exchange Commission on May 20, 2014, the Company reported that “on May 13, 2014 the Company completed the acquisition of a majority stake of Apple Rush Company, Inc. (“Apple Rush”), pursuant to a Memorandum of Understanding which the Company had disclosed on Form 8-K filed on March 10, 2014”. Due to the complicated and difficult nature of the due diligence and other requirements to complete the transaction, the Company has decided not to go ahead with the Apple Rush transaction. As a result, the costs incurred totaling $64,549 related to the Apple Rush transaction were expensed and are included in other expenses on the consolidated statements of operations. On October 14, 2014, the Company issued 4,000,000 shares of common stock, in connection with the purchase of Apple Rush trademarks, valued at $84,000 pursuant to fair market value of the shares issued on the day of the agreement and charged to operations since the Company has not decided to go ahead with the Apple Rush transaction.
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