Item 2.01 Completion of Acquisition of Assets.
On September 17, 2018, Sears Oil and Gas Corporation, a Nevada corporation (the "Company") filed a Form 8-K to disclose that on September 13, 2018, it had entered into an Asset Purchase Agreement ("
Agreement
) with Human Brands International, Inc., a Nevada corporation ("
HB
I"). Pursuant to the Agreement, the Company agreed to acquire from HBI certain assets of HBI (the
Assets
) in exchange for 3,5000,000 shares of common stock of the Company and $50,000 in cash (the "
Acquisition
"). The acquisition transaction was completed on September 28, 2018 and the shares were issued and delivered and the cash portion of the purchase price was paid on that date. The Assets acquired are certain
Tequila Alebrijes Products and Property Rights
. The total acquisition purchase price is valued as follows:
Agreed Upon Value of purchased Assets
$5,450,000
Cash portion of purchase price
$ 50,000
Stock portion of Purchase Price
$5,400,000
The Company did not acquire any ongoing operation of HBI. The Company did not merge with or acquire an equity interest in HBI. The Company made no changes in its officers or directors. The Company did not hire any employee of HBI. The transaction was essentially the acquisition of certain rights to distribute, rights to use a brand and a limited amount of inventory. The Company intends to either assign the acquired assets to a third party for a royalty or contract with one or more other entities to market products under the Tequila Alebrijes brand on behalf of the Company.
Tequila Alebrijes Products and Property Rights
means collectively, the intangible legal rights of HBI pertaining to: (a) rights associated with the Product known as Tequila Alebrijes including but not limited to Tequila Alebrijes Blanco, Reposado, and Añejo. Also including but not limited to, any and all related products or extension of that product including other related Tequila Blends and formulas from the same or other related supplier as well as physical extensions of the Tequila Alebrijes Brand in the form of logos, trademarks, marketing material and related copyrights, copyright applications and copyright registrations and moral rights, trademarks, service marks, logos, trade dress, trade names and service names and all goodwill associated therewith; (b) rights related to the protections of trade secrets and confidential information, including, but not limited to, rights in industrial property, vendor lists and all associated information and other confidential or proprietary information; (c) industrial design rights; and (d) any rights analogous to those set forth in the preceding clauses and any other proprietary rights relating to intangible property, including, but not limited to, any applications, registrations or recordings in connection with the foregoing. HBI also granted to the Company the exclusive rights to sell directly or distribute the Assets on a worldwide basis including any product Extension of the Assets.
The Assets include any and all product line extensions. The Acquired Assets include but are not limited to the following:
·
Trade Mark Design
·
Packaging Design
·
Formulas for Production of Tequila Alebrijes
·
One Container of Tequila Alebrijes Product of not less than 11,000 Mixed 750 ML bottles to be shipped to third parties as designated by the Company
·
All Tequila Alebrijes Rights for Worldwide Use
·
All Tequila Alebrijes Extensions for Worldwide Use
·
The exclusive rights to sell the assets directly by the Company or through designated distributors or brand managers worldwide
2
The Asset Purchase Agreement was filed as an exhibit to the Current Report on Form 8-K that was filed on September 17, 2018.
On September 28, 2018, the Company borrowed $300,000 from Auctus Fund, LLC (the
Loan
) from which it paid (i) the cash portion of the purchase price, (ii) professional fees incurred in connection with the Asset Purchase transaction and the Loan transaction, (iii) the repayment of certain existing debt, and (iv) the Company reserved funds for working capital. On September 28, 2018, the Company filed a Current Report on Form 8-K reporting on the Loan transaction. The primary Loan documents were filed as exhibits to such Form 8-K
No broker
s fees or finder
s fees were paid or given by the Company in connection with the Asset Purchase Transaction or the Loan transaction.