Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure set forth in Item 8.01 below is incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
The disclosure set forth in Item 8.01 below is incorporated herein by reference.
Item 8.01 Other Information.
The disclosure set forth in Item 8.01 below is incorporated herein by reference.
On December 31, 2018, Alpha) executed a Share Exchange Agreement (the "Purchase
Agreement") with Parsons Energy Group LLC, a limited liability company
("Parsons") that owns leasehold mining rights on approximately 1,200 acres
located in Independence, Wisconsin, which contains an estimated 1110 Million
Tons of Tier 1 Northern White Fracking Sand. Parsons represented that its
leasehold mining rights had an estimated "As Is" value of approximately $300
million ($300,000,000). Pursuant to the Purchase Agreement, the Company was to
acquire a 19% limited liability company membership interest in Legacy Sands
Group, LLC ("Legacy Sands") a newly organized Florida limited liability company
formed to exploit the fracking rights in exchange for the issuance by the
Company of its Series 2020 Preferred Stock having an estimated value of
$57,000,000.
However, prior to closing of the transaction, the Company ordered an MIA
appraisal that valued Parsons' real property and mining rights at an "AS IS"
value of $178-million dollars as of April 15, 2020. Accordingly, the Company and
Parsons entered into an amendment to the Purchase Agreement effective as of June
30, 2020 reflecting the revised valuation, Thereupon, Legacy Sands was organized
formed and title to the mining rights was transferred to Legacy. Based on the
MIA appraisal, the 19% ownership is anticipated to provide the Company with net
equity of approximately $33,850,000 on its balance sheet as of June 30, 2020.
Legacy Sands has four (4) members: (i) Parsons Management Group, which operates
in the fracking industry as an owner and operator of leasehold real property
assets and or consulting services; (ii) Kanatit Investments LLC, which is
engaged in real asset investment management and fracking consulting
services;(iii) Windsor Business Solutions LLC, which is engaged in commercial
real estate consulting services; (iv) and Alpha Investment Inc. In addition, the
membership interest is broken down into three (3) categories: (a )Membership
Interest (%); (b) Economic Interest (%); and (c) Voting Interest, with Alpha
having a non-dilutive (1) 19% Membership Interest ; (2) 19 % Economic Interest;
and (3) 19% Voting Interest. Legacy Sands is managed by Rick Parsons, Randal
Smith, and Larry Williams who are affiliated with Parsons Management Group,
Kanatit Investments LLC and Windsor Business Solutions LLC, respectively.
The Company has designated 3,382 shares of its authorized, but unissued
preferred stock, as the 2020 Series Preferred Stock as consideration in the
transaction with Parsons. The Series 2020 Preferred Stock has a par value of
$10,000 per share and each share is convertible at the option of the holder into
1,125 shares of the Company's common stock for an aggregate of 3,804,750 shares
of common stock,, subject to adjustment for stock splits, stock dividends and
similar transactions, Holders of our Series 2020 Preferred Stock have no voting
rights, except as required by Delaware law.
2
The above descriptions are qualified in their entirety by reference to the
Purchase Agreement, the amendment thereto and the Certificate of Designation of
the Series 2020 Preferred Stock attached as Exhibits to this report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit
Exhibit No Description of Exhibit
3.1 (iv) Certificate of Designation of Series 2020 Preferred Stock
10.1 Purchase Agreement
10.2 First Amendment to Purchase Agreement
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