Item 1.01
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Entry into a Material Definitive Agreement
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Stock
Purchase Agreement between Goldenrise Development, Inc. and Michael Dunn
As previously
reported on our current report on Form 8-K filed with the Commission on June 29, 2017, incorporated herein by reference, on June
28, 2017, Goldenrise Development, Inc., a California corporation (“Goldenrise”) and Cloud Security Corporation (the
“Company”) entered into a Stock Purchase Agreement (the “Agreement”) with Michael R. Dunn, the Company’s
sole officer and director (the “Purchaser”). Pursuant to the Agreement, Goldenrise agreed to sell and Purchaser agreed
to purchase 12,000,000 restricted common stock shares of the Company (the “Shares”), representing approximately 92.12%
of the Company’s outstanding shares of common stock. In consideration for the Shares, Purchaser agreed to pay Goldenrise
a total of $400,000 as follows: (i) $180,000 on or before July 15, 2017 (extended to July 28, 2017) (the “Closing”),
(ii) $180,000 shall be withheld by Purchaser and applied towards monies owed by Seller to Purchaser; and (iii) $40,000 shall be
with withheld by Purchaser and applied towards invoices related to the audit and legal fees associated with the reporting requirements
of the Company through the date of Closing. The Closing occurred on July 28, 2017.
The Closing
of the Agreement effectuated a change in control of the Company. As a result of the Closing, the Purchaser owns approximately 92.12%
of the Company's issued and outstanding common stock.
The are no arrangements or understandings among members of both the
former and new control groups and their associates with respect to election of officers or other matters, except as set forth herein.
The foregoing
description of the Agreement
is qualified in its entirety by reference to the full text thereof, which was filed as Exhibit
10.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 29, 2017 and incorporated herein by reference.
Stock
Purchase Agreement between Michael Dunn, China Israel Biotechnology Co. Ltd. and Central Bio-MD Technology Co. Ltd.
On June 28, 2017, Michael Dunn (the “Seller”)
and
China Israel Biotechnology Co. Ltd. and Central Bio-MD Technology Co. Ltd.
, each
a Chinese corporation (collectively, the “Buyers”), entered into a Stock Purchase Agreement (the “SPA”).
Pursuant to the SPA, Seller agreed to sell and Buyers agreed to purchase 6,000,000 restricted common stock shares of the Company
(the “Shares”), representing approximately 46.06% of the Company’s outstanding shares of common stock. In consideration
for the Shares, Buyers agreed to pay to Seller a total of $200,000 upon execution of the SPA. The closing of the SPA is expected
to occur on or before July 12, 2017, unless mutually extended by the parties (the “Closing”). The Closing of the SPA
was extended mutually by the parties and closed on July 28, 2017.
The Closing of the SPA effected a secondary
change in control of the Company as Buyers now own approximately 46.06% of the Company's issued and outstanding common stock. There
are no arrangements or understandings among members of both the former and new control groups and their associates with respect
to election of officers or other matters.
The foregoing description of the Agreement
is not complete and is qualified in its entirety by reference to the ful[l text thereof, which is filed as Exhibit 10.1 to this
Current Report on Form 8-K and incorporated by reference into this Item 1.01.
Security Ownership of Certain Beneficial Owners and Management
The following table lists, as of July 28, 2017,
the number of shares of common stock that are beneficially owned by (i) each person or entity known to the Company to be the beneficial
owner of more than 5% of the outstanding common stock; (ii) each officer and director of the Company; and (iii) all officers and
directors as a group.
The amounts and percentages of common stock
beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities.
Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares
voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,”
which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial
owner of any securities of which that person has the right to acquire beneficial ownership within 60 days. Under these rules more
than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of
securities as to which such person has no economic interest. Except as noted below, each person has sole voting and investment
power.
Unless otherwise indicated below, each beneficial
owner named in the table has sole voting and sole investment power with respect to all shares beneficially owned, subject to community
property laws where applicable. The address of each beneficial owner is 2 Park Plaza, Suite 400, Irvine, CA 92691 and the address
of more than 5% of common stock is detailed below.
Name and Address of Beneficial Owner,
Directors and Officers:
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Amount and Nature of
Beneficial Ownership
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Percentage of
Beneficial Ownership (1)
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Michael R. Dunn (2)
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3,500,000
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26.86%
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Qingxi “Sunny” Huang (3)
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0
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0%
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Amanda Huang(4)
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1,500,000
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11.51%
|
|
|
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All executive officers and directors as a group
(3 people)
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5,000,000
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38.37%
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|
|
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Beneficial Shareholders of Common Stock greater than 5%
|
|
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China Israel Biotechnology Co. Ltd.(5)
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4,500,000
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34.54%
|
Central Bio-MD Valley Technology Co., Ltd.(6)
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1,500,000
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11.51%
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(1)
Applicable
percentage of ownership is based on 13,026,980 shares of common stock outstanding and 0 shares of Preferred Stock issued and outstanding
on July 31, 2017. Percentage totals are calculated separately based on each class of capital stock. Percentage ownership is determined
based on shares owned together with securities exercisable or convertible into shares of common stock within 60 days of July 31,
2017, for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting
or investment power with respect to securities. Shares of common stock subject to securities exercisable or convertible into shares
of common stock that are currently exercisable or exercisable within 60 days of July 31, 2017, are deemed to be beneficially owned
by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated
as outstanding for the purpose of computing the percentage ownership of any other person.
(2)
Michael
R. Dunn is President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Chairman of the Board of the Company;
his beneficial ownership includes 3,500,000 shares of common stock, as acquired from Goldenrise Development on July 28, 2017 and
0 shares issuable upon the exercise of stock options.
(3)
Qingxi
“Sunny” Huang is Chairman of the Board of Directors of the Company; his beneficial ownership includes 0 shares of common
stock directly owned and 0 shares issuable upon the exercise of stock options. Mr. Huang is an indirect beneficiary of 6,000,000
shares of common stock owned by China Israel Biotechnology Co. Ltd. and Central Bio-MD Valley Technology Co., Ltd. Mr. Huang and
Ms. Amanda Huang have no familial relationship to each other.
(4)
Amanda
Huang is Senior Vice President of the Company; her beneficial ownership includes 1,500,000 shares of common stock acquired on July
28, 2017 pursuant to a private consulting agreement between Ms. Huang and Mr. Dunn. Mr. Sunny Huang and Ms. Amanda Huang have no
familial relationship to each other.
(5)
China Israel
Biotechnology Co. Ltd. (“CIB”), is a Chinese corporation, having an address at 21F, Hualing Building, 111 Furong Rd,
Changsha, Hunan Province, China. CIB is owned 100% by Central Bio-MD Valley Technology Co., Ltd. Beneficial ownership includes
4,500,000 shares of common stock issued pursuant to the SPA which closed on July 28, 2017.
(6)
Central
Bio-MD Valley Technology Co., Ltd. (“CBV”), is a Chinese corporation, having an address at 21F, Hualing Building, 111
Furong Rd, Changsha, Hunan Province, China. CBV is controlled by Huang “Sunny” Qingxi. Beneficial ownership includes
1,500,000 shares of common stock issued pursuant to the SPA which closed on July 28, 2017.