On
January 26, 2007, Coronado Industries, Inc. (the “Registrant” or “Company”), and
G. Richard Smith, an individual residing in Arizona, entered into
an Asset Sales
Agreement (the “ASA”) dated as of January 24, 2007, pursuant to which the
Registrant agreed to sell and Mr. Smith agreed to purchase substantially
all of
the Registrant’s assets, including but not limited to, one hundred percent
(100%) of the outstanding common stock of each of the Registrant’s subsidiaries,
as well as all of the Registrant’s furniture, fixtures, inventory, and office
equipment and all other personal property owned by the Registrant
(collectively
the “Assets”). The purchase price for the Assets sold by the Registrant to Mr.
Smith pursuant to the ASA is $300,000 in cash (the “Purchase Price”). The
Purchase Price is to be paid upon the closing of the transaction
memorialized in
the ASA. Pursuant to the terms of the ASA, Mr. Smith also agreed,
under certain
conditions, to assume certain liabilities of the Registrant if they
remain
unpaid subsequent to the closing of the sale of the Assets. A copy
of a form of
the ASA is attached hereto as Exhibit 2.1 to this Report.
On
January 24, 2007, the sale of the Assets by the Registrant and the
terms of the
ASA were approved by a unanimous vote of the board of directors of
the
Registrant and a majority vote of the common shareholders of the
Registrant
through the execution of director and shareholder consents. The execution
of the
ASA by the Registrant is part of a planned reorganization of the
Registrant, a
possible change in the operations of the Registrant and is part of
a planned
series of transactions that would result in a change of control of
the
Registrant. Such change of control transaction is described in greater
detail in
Item 5.01 of this Current Report.
| Section
2. |
Financial
Information
|
| Item
2.01 |
Completion
of Acquisition or Disposition of
Assets
|
On
January 26, 2007 (the “ASA Closing Date”), the Registrant closed the asset sale
transaction (the “Asset Sale”) pursuant to the Asset Sales Agreement dated as of
January 26, 2007,
by and
between the Registrant and G. Richard Smith (the “ASA”) whereby the Registrant
sold substantially all of the assets of the Registrant to Mr. Smith
for a total
purchase price on the ASA Closing Date of $300,000 (the “Purchase Price”) and
the assumption of certain liabilities. Any capitalized terms not
defined herein
have the meaning defined in the Asset Sales Agreement.
Assets
Purchased
On
the
ASA Closing Date the Registrant sold substantially all of its rights,
title and
interest in the assets and properties of the Registrant used or held
for use in
connection with its business, including but not limited to, one hundred
percent
(100%) of the outstanding common stock of each of the Registrant’s subsidiaries,
as well as all of the Registrant’s furniture, fixtures, inventory, and office
equipment and all other personal property owned by the Registrant
(collectively
the “Assets”).
Liabilities
Assumed
Upon
receipt of the Purchase Price, the Registrant agreed, pursuant to
the terms of
the ASA, to immediately commence using the Purchase Price to pay
certain of the
Registrant’s outstanding debts and accounts payable. Under the terms of the
ASA,
Mr. Smith assumed certain of the existing debts and liabilities of
the
Registrant and its subsidiaries that existed on the date of execution
of the
ASA, which remain unpaid after the Purchase Price and an additional
$200,000 has
been paid out by the Registrant on such outstanding debts and liabilities.
Purchase
Price
On
the
ASA Closing Date, the Purchase Price of $300,000 in cash was paid
by Mr. Smith
to the Registrant as consideration for the sale and transfer of the
Assets. The
board of directors of the Registrant determined that the Purchase
Price for the
Assets was fair to the shareholders of the Registrant based on the
recent market
prices of the Registrant’s common stock and the past performance of the Company.
The closing of the ASA by the Registrant is part of a planned reorganization
of
the Registrant, a possible change in the operations of the Registrant
and is
part of a planned series of transactions that would result in a change
of
control of the Registrant. Such change of control transaction is
described in
greater detail in Item 5.01 of this Current Report.
Material
Relationship
The
foregoing description of the ASA is not intended to be complete and
is qualified
in its entirety by the complete text of the agreement, the form of
which is
attached as Exhibit 2.1 to this Report.
| Section
3. |
Securities
and Trading Periods
|
Reverse
Split of Registrant’s Common Stock
On
January 19, 2007, the board of directors and a majority of the common
shareholders of the Registrant approved a one-for-one-hundred (1:100)
reverse
split of the Registrant’s outstanding common stock (the “Reverse Stock Split”).
The Reverse Stock Split shall become effective on February 5, 2007,
and shall be
applicable to all the common stock of the Registrant outstanding
on that date.
On February 5, 2007, the Registrant had 293,982,243 shares of common
stock
issued and outstanding. On February 5, 2007, after giving effect
to the Reverse
Stock Split, the Registrant had approximately 2,939,900 shares of
common stock
issued and outstanding.
The
Registrant shall not issue fractional shares of common stock. If
a shareholder
would be entitled to receive a fractional share as a result of the
Reverse Stock
Split, the Registrant shall round that fractional share up to the
nearest whole
share, and such shareholder will be issued that additional whole
share.
Furthermore, the common shareholders of the Registrant shall not
be required to
return or exchange their existing stock certificates in order for
the Reverse
Stock Split to be effective for their shares.
In
connection with the effectuation of the Reverse Stock Split, the
Registrant has
applied for and received a new trading symbol and CUSIP number for
its common
stock. Beginning at the opening of trading on February 5, 2007, shares
of the
Registrant’s common stock shall trade on the OTC Bulletin Board under the symbol
“CNDI” and the CUSIP number for such shares shall be 219 784 402.
The
Registrant’s Articles of Incorporation authorize the issuance of 400,000,000
shares of $.001 par value per share common stock and 50,000,000 shares
of $.001
par value per share preferred stock. The implementation of the Reverse
Stock
Split shall not affect the number of shares of common or preferred
stock that
are authorized by the Registrant’s Articles of Incorporation. There are
currently no shares of the Registrant’s preferred stock issued and
outstanding.
| Item
3.02 |
Unregistered
Sales of Equity
Securities.
|
On
February 6, 2007, the Registrant completed the sale of 47,000,000
shares of its
post-Reverse Stock Split Common Stock to Ms. Karen Sandhu in a private
transaction with gross proceeds to the Registrant from the sale equaling
$200,000 (the “Offering”). Ms. Sandhu is an accredited investor (as defined in
Rule 501 of Regulation D). The purchase price of the Offering shares
was paid in
cash. The shares of Common Stock issued in the Offering are restricted
shares
and were issued in a transaction exempt from the registration requirements
of
the Securities Act of 1933, as amended (the “Securities Act”) pursuant to
Section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder
and
Registrant affixed appropriate legends to the stock certificates
issued in the
Offering. The shares issued in the Offering are subject to Rule 144
under the
Securities Act and therefore generally cannot be resold for a period
of twelve
months from the date of purchase. No general solicitations were made
in
connection with the Offering, and prior to making any offer or sale,
the
Registrant had reasonable grounds to believe and believed that Ms.
Sandhu was
capable of evaluating the merits and risks of the investment and
was able to
bear the economic risk of the investment.
Use
of
Proceeds
The
net
proceeds from the Offering were $200,000. The Registrant will use
the net
proceeds from the Offering to fund its general operations and to
pay outstanding
debts and liabilities of the Registrant.
| Section
5. |
Corporate
Governance and Management
|
| Item
5.01 |
Changes
in Control.
|
Acquisition
of Common Stock by Mr. Marco Gutierrez
Pursuant
to the terms of a Stock Purchase Agreement dated as of January 26,
2007, by and
between Mr. Marco Gutierrez, Mr. G. Richard Smith, Mr. Gary R. Smith
and Mr.
John LiVecchi (the “SPA”), Mr. Gutierrez agreed to purchase a total of
160,994,722 shares (the “Shares”) of pre-Reverse Stock Split common stock of the
Registrant from Messrs. Smith, Smith and LiVecchi (the “Sellers”) for an
aggregate purchase price of $100,000. The transactions memorialized
in the SPA
closed on February 2, 2007, through the payment by Mr. Gutierrez
of the
aggregate purchase price to the Sellers and the transfer of the Shares
by the
Sellers to Mr. Gutierrez. In connection with the closing of the APA,
the Sellers
agreed to return all of the employee stock options held by them to
the
Registrant for cancellation. Upon the closing of the SPA, the forfeiture
and
cancellation of all of the outstanding stock options held by the
Sellers became
effective.
On
February 5, 2007, the Registrant had 293,982,243 shares of pre-Reverse
Stock
Split shares of common stock outstanding (equivalent to 2,939,900
post-Reverse
Stock Split shares). As a result of the closing of the transactions
memorialized
in the APA, Mr. Gutierrez currently owns 160,994,722 shares of our
pre-Reverse
Stock Split common stock (equivalent to 1,609,948 post-Reverse Stock
Split
shares). Therefore, as of February 5, 2007, Mr. Gutierrez owned 54.8%
of the
outstanding common stock of the Registrant. On January 26, 2007,
Mr. Gutierrez
was appointed to the Registrant’s Board of Directors to fill a vacancy thereon
that had been created by the resignation of a prior board member.
The
transaction referred to above did not involve an underwriter or placement
agent
and there were no underwriter’s discounts or commissions, or placement agent
fees or commissions, paid in connection with the transaction. Mr.
Gutierrez is
an accredited investor, as defined by Rule 501 of Regulation D, and
has the
business and financial knowledge to analyze the risks associated
with an
investment in our common stock. Mr. Gutierrez purchased the Shares
for
investment purposes, intends to hold the stock and did not purchase
the Shares
with a view towards re-selling them. The Shares are restricted shares
and any
sale of shares by Mr. Gutierrez in the future must be under an effective
registration statement or pursuant to a valid exemption from such
registration.
Unregistered
Sale of Equity Securities
On
February 6, 2007, the Registrant completed the Offering, as described
in Item
3.02 above. As a result of the issuance of the 47,000,000 shares
of post-Reverse
Stock Split Common Stock to Ms. Karen Sandhu in the Offering, as
of February 6,
2007, Ms. Sandhu owned 94.1% of the issued and outstanding Common
Stock of the
Registrant.
Security
Ownership Of Certain Beneficial Owners And Management.
The
following table sets forth as of February 6, 2007, certain
information regarding the beneficial ownership(1)
of our
common stock by (i) each person who is known by us to own 5% or more
of our
common stock, (ii) each of our directors, (iii) each of our executive
officers
and (iv) all of our executive officers and directors as a group.
Unless
otherwise indicated, each of the stockholders shown in the table
below has sole
voting and investment power with respect to the shares beneficially
owned. All
share ownership and percentage numbers shown in the following table
are
presented on a post-Reverse Stock Split basis. Unless otherwise stated,
all
address of the persons listed below are the principal office of the
Registrant.
|
|
|
Number
of
|
Percent
|
| Name and Address |
Company
Position
|
Shares
Owned
|
of
Class(2)
|
| |
|
|
|
| Mr.
Peter Gelb |
CEO,
President, Treasurer and Director
|
0
|
0.0%
|
| Mr. Marco Gutierrez (3) |
Director |
1,609,948
|
3.2%
|
| Ms. Karen Sandhu (4) |
|
47,000,000
|
94.1%
|
| G. Richard Smith (5) |
|
0
|
0.0%
|
| Gary R. Smith (6) |
|
0
|
0.0%
|
| John LiVecchi (7) |
|
0
|
0.0%
|
|
All
directors and executive
officers
as a group (2 persons)
|
|
1,609,948
|
3.2%
|
| (1) |
As
used in this table, a beneficial owner of a security includes
any person
who, directly or indirectly, through contract, arrangement,
understanding,
relationship or otherwise has or shares (a) the power to
vote, or direct
the voting of, such security or (b) investment power which
includes the
power to dispose, or to direct the disposition of, such
security. In
addition, a person is deemed to be the beneficial owner
of a security if
that person has the right to acquire beneficial ownership
of such security
within 60 days.
|
| (2) |
After
giving effect to the Reverse Stock Split and the closing
of the Offering,
the Registrant had approximately 49,939,900 shares of Common
Stock
outstanding as of February 6, 2007.
|
| (4) |
Ms.
Sandhu’s address is 43111 University Place, Miami, FL
33146.
|
| (5) |
G.
Richard Smith was a former officer and director of the
Registrant who
resigned from his positions with the Registrant on January
26,
2007.
|
| Item
5.02 |
Departure
and Appointment of Directors and Principal
Officers.
|
Directors
On
January 26, 2007,
the
Board of Directors of the Registrant appointed Mr. Peter Gelb to
serve as a
director of the Registrant to fill a vacancy on the Board of Directors
that was
created by the prior resignation of Dr. John T. LiVecchi.
On
January 26, 2007,
the
Board of Directors of the Registrant appointed Mr. Marco Gutierrez
to serve as a
director of the Registrant to fill a vacancy on the Board of Directors
that was
created by the prior resignation of Mr. Gary R. Smith.
On
January 26, 2007,
Mr.
G. Richard Smith and Mr. Mark R. Smith resigned from the Board of
Directors of
the Registrant and from all executive officer positions held by them
with the
Registrant.
The
Board
of Directors of the Registrant currently consists of two members,
Mr. Peter Gelb
and Mr. Marco Gutierrez. The full Board of Directors of the Registrant
consists
of five seats. Currently, three seats of the Registrant’s Board of Directors are
vacant.
Principal
Officers
On
January 26, 2007,
Mr.
Peter Gelb was appointed to serve as the Chief Executive Officer,
President,
Chief Accounting Officer and Treasurer of the Registrant.
Mr.
Gelb
has extensive experience in the financial services industry. During
the past ten
years, Mr. Gelb has worked in the capital markets, debt financing,
equity
financing, and private investment areas of that industry. From 2006
to the
present, Mr. Gelb has been a Managing Director of Copper Beech Equity
Partners
LLC, a boutique investment banking firm located in New York City.
From 2004 to
2006, Mr. Gelb was a Managing Director of First Wall Street Capital.
From 2001
to 2004, Mr. Gelb was a Senior Vice-President at Deutsche Financial
Services and
from 1996 to 2001, Mr. Gelb was a Senior Vice-President at US Capital
Markets. A
former CPA, Mr. Gelb received his BS degree from the Wharton Business
School and
an MBA from Columbia University. Mr. Gelb is not a member of any
other boards of
directors.
No
director, executive officer, promoter or control person of the Registrant
has,
within the last five years: (i) had a bankruptcy petition filed by
or against
any business of which such person was a general partner or executive
officer
either at the time of the bankruptcy or within two years prior to
that time;
(ii) been convicted in a criminal proceeding or is currently subject
to a
pending criminal proceeding (excluding traffic violations or similar
misdemeanors); (iii) been subject to any order, judgment or decree,
not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending
or
otherwise limiting his involvement in any type of business, securities
or
banking activities; (iv) been found by a court of competent jurisdiction
(in a
civil action), the Securities and Exchange Commission (the “Commission”) or the
Commodity Futures Trading Commission to have violated a federal or
state
securities or commodities law, and the judgment has not been reversed,
suspended
or vacated. There are no family relationships among any directors
and executive
officers of the Registrant
| Section
9. |
Financial
Statement and Exhibits.
|
| Item
9.01 |
Financial
Statements and Exhibits.
|
|
(b)(1)
|
Pro-Forma
Financial Information - To be filed by
amendment.
|
The
following Exhibits are hereby filed as part of this Current Report
on Form
8-K:
|
Exhibit
|
|
Description
|
|
|
|
|
|
2.1
|
|
Form
of the Asset Sales Agreement dated as of January
26, 2007, by and between
Coronado Industries, Inc., a Nevada corporation,
and G. Richard Smith.
|
| |
|
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, Coronado
Industries,
Inc. has duly caused this report to be signed on its behalf by the
undersigned
hereunto duly authorized.
| |
|
|
| |
CORONADO
INDUSTRIES, INC. |
|
|
|
| Date:
February
7, 2007 |
By: |
/s/
Peter
Gelb |
| |
|
| |
President
|
EXHIBIT
INDEX
|
Exhibit
|
|
Description
|
|
|
|
|
|
2.1
|
|
Form
of the Asset Sales Agreement dated as of
January 26, 2007, by and between
Coronado Industries, Inc., a Nevada corporation,
and G. Richard Smith.
|
| |
|
|
