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GHDC > SEC Filings for GHDC > Form 8-K/A on 18-Nov-2013All Recent SEC Filings

Show all filings for GOLDLAND HOLDINGS CORP.

Form 8-K/A for GOLDLAND HOLDINGS CORP.


18-Nov-2013

Entry into a Material Definitive Agreement


Item 1.01 Entry into a Material Definitive Agreement

On September 19, 2013, Goldland Holdings Co. (the "Company") (through its wholly-owned subsidiary, Universal Entertainment SAS, Inc.), entered into an Asset Purchase Agreement (the "Original Agreement") with Universal Entertainment SAS, Ltd. (the "Seller"), a corporation formed under the laws of the Country of Colombia, to acquire certain casino equipment (the "Equipment").

On November 18, 2013, the Company entered into an Amended Asset Purchase Agreement (the "Amended Agreement") with the Seller, as well as Game Touch, LLC and Claudia Sifuentes Robles, two shareholders of the Seller. Under the Amended Agreement, the Company agreed to acquire the Equipment on the following terms:

Description of Equipment Acquisition: The purchase price of the Equipment is 17,450,535 shares of the Company's Common Stock, after giving effect to a proposed one for ten reverse stock split. The parties have agreed to value the shares at $3,490,107, or $0.20 per share. The Equipment had an original cost of $874,970, and includes approximately 67 video poker and slot machines; 8 blackjack and miscellaneous game tables and related furniture and equipment; roulette table and related furniture and equipment; bingo equipment and furniture; casino chips, bill acceptors, coin counter and related equipment; and miscellaneous office equipment, like chairs, tables, etc.

The Amended Agreement includes a number or representations and warranties of the seller, including that the seller is duly organized and in good standing; that the seller is authorized to enter into the Amended Agreement and consummate the transactions provided for therein; that the Company will acquire good title to the Equipment free and clear of all liens, claims or encumbrances; that the seller is not acquiring the Company's shares with a view to redistribute them; that the seller has reviewed the Company's SEC filings.

Equipment Lease: At the closing of the purchase of the Equipment (the "Equipment Acquisition"), the Company will simultaneously enter into a lease (the "Lease") of the Equipment to VOMBLOM & POMARE S.A., a company formed under the laws of Colombia. The Equipment will be used primarily in the operation of a casino that is owned and operated by the lessee on San Andres Isla, Colombia. However, some of the equipment, such as video poker and slot machines, will be placed in retail locations under agreements with the retail merchant to divide winnings from the machines. The Lease provides that it will commence as of September 19, 2013, will be for an initial term of five years, and will automatically renew for an additional five year term unless either party elects to terminate the lease at least 90 days prior to the expiration of the original term. The lessee shall be responsible for maintenance of the Equipment, payment of all taxes assessed against the Equipment, and maintaining insurance on the Equipment. Lease payments will be equal to $700,000 per year, payable in monthly installments of $58,333. During the term of the Lease, the lessee is required to provide the Company with a daily report of net revenues from the operation of the lessee's business. Furthermore, the lessee agreed to allow an auditor to use an office in the lessee's business for purposes of conducting a monthly audit of the lessee's business, and to pay all costs of the auditor over $1,500 per month.

Bonus Shares: In connection with the Equipment Acquisition, the Company plans to issue 17,000,000 post-split shares of common stock to various officers, directors and significant shareholders as a bonus for past services and support of the Company and as consideration for future services and support. If the Equipment Acquisition is not consummated, the shares will not be issued. Set forth below is a list of the proposed shares issuances:

                           Shareholder         No. of Shares
                    Paul Parliament                  500,000
                    Lewis Georges                    500,000
                    Christian Quilliam             5,000,000
                    New Vision Financial, Ltd.     2,000,000
                    Allan Breitkreuz               3,000,000
                    Bisell Investments, Inc.       2,000,000
                    Denise Quilliam                4,000,000
                    Total                         17,000,000

Cancellation of Options: In connection with the Equipment Acquisition, the Company plans to enter into agreements to cancel all outstanding options in consideration for $100 payable to each optionholder. If the Equipment Acquisition is not consummated, the options will not be cancelled. Set forth below is a list of the options that will be cancelled:

                          Pierre Quilliam    18,000,000
                          Denise Quilliam    13,250,000
                          Christian Quilliam 17,000,000
                          Thomas C. Ridenour 17,000,000
                          Allan Breitkreuz   17,000,000
                          Pascale Tutt        3,750,000
                          Total              86,000,000

Consulting Agreements. In connection with the Equipment Acquisition, the Company plans to enter into consulting agreements with the principals of the seller, the seller's investment banker and certain other consultants. If the Equipment Acquisition is not consummated, the Company will not enter into the consulting agreements. Set forth below is a summary of the key terms of the consulting agreements:

                   Consultant        Compensation   Term   Bonus Shares

            Julios Kosta             $250,000/year 5 years  6,808,046
            Claudia Cifuentes Robles $120,000/year 5 years  1,361,888
            Jack Frydman             $250,000/year 5 years  6,808,046
            Pascale Quilliam         $150,000/year 5 years   500,000
            Richard Kaiser           $2,500/month  1 year    500,000
            Pierre Quilliam          $250,000/year 5 years      0
            Thomas C. Ridenour       $185,000/year 5 years  3,000,000
            Q-Prompt, Inc.               None      5 years  1,000,000

All of the consulting agreements provide that they are terminable at will by either party prior to the expiration of the term on thirty days' notice to the other party. All of the consulting agreements provide that the bonus shares will be registered on Form S-8 prior to issuance. With the exception of Mr. Kaiser's consulting agreement, all of the consulting agreements provide that the compensation will be paid three times per year in restricted shares of the Company's common stock valued at the closing price of the common stock at the end of each trimester. In Mr. Kaiser's case, his consulting payments will be made on a monthly basis with shares of restricted common stock with a value of $1,000, and in shares of common stock registered on Form S-8 with a value of $1500.

Conditions to Closing. The closing of the Equipment Acquisition is conditioned on the completion of a one for ten reverse split of the Company's common stock, all of the representations and warranties of both parties being true as of the closing date, the execution of the Lease, the issuance of the bonus shares described below, the cancellation of the options described below, the execution of the consulting agreements described below, among other things.

Accounting treatment of transaction. The Company plans to record the purchase of the Equipment as the acquisition of tangible, depreciable assets. In addition, the Company will enter into a lease agreement which will be capitalized. The value of the lease will be recorded as an asset using a discount rate of 7.5% for a term of five years. The excess purchase price will be recorded as goodwill.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

Exhibit No.                             Description
    10.1     First Amendment to Asset Purchase Agreement dated November 15,
             2013 by and between Universal Entertainment SAS, Ltd., a
             corporation formed under the laws of the Country of Colombia, Game
             Touch, LLC, Claudia Cifuentes Robles and Universal Entertainment
             SAS, Inc., a Florida corporation

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