ITEM 2.01 Completion of Acquisition or Disposition of Assets
On June 17, 2021, the Company entered into a Share Exchange Agreement with the
shareholders of Massive Treasure Limited ("Massive Treasure"). Pursuant to the
Share Exchange Agreement, the Company agreed to issue 1,078,269,470 in exchange
for 100% of Massive Treasure. Massive Treasure is a party to numerous agreements
to acquire 12 additional business entities. As such, the Company further agreed
to issue an additional 55,641,014 shares of common stock to complete the
acquisition of such 12 business entities in the near future. In May, 2021,
Massive Treasure consummated the acquisition of 9 entities as more fully
described below. Herbert Lee, the Company's director, beneficially owns 95% of
Massive Treasure. This acquisition consummated on September 17, 2021.
The foregoing description of the Share Exchange Agreement is qualified in its
entirety by reference to the Share Exchange Agreement which is filed as Exhibit
10.1 to this Current Report and is incorporated herein by reference.
Description of Agreements of Massive Treasure with 9 Entities
E-on Finance and 8M Ltd.
In May 2021, Massive Treasure entered into a Share Swap Letter Agreement (the
"100% Share Swap Letter") with the shareholders of each of E-on Finance Limited,
a Hong Kong corporation ("E-on") and 8M Limited, a Hong Kong corporation ("8M")
to acquire 100% of each of E-on and 8M for approximately 20,110,604 and
10,055,302 shares of common stock, respectively, of the Company based upon the
closing price of the common stock of the Company as of the date of signing of
the 100% Share Swap Letter and determined in accordance with the terms of the
100% Share Swap Letter on the date. The acquisition of E-on and 8M consummated
in May, 2021. The Company intends to issue 10,256,409 shares and 5,128,204
shares to the shareholders of E-on and 8M, respectively, in the immediate
future. The Company will become obligated to issue the remaining balance of the
shares on the first anniversary of the Closing of the acquisition of each of
E-on and 8M, subject to certain clawback provisions.
2
E-on and 8M are obligated to meet certain financial milestones in each of the
two year anniversaries following the Closing. Failure to meet such milestones
will result in a clawback of the shares issued to the shareholders. On the
second anniversary of the Closing, if E-on or 8M exceeds the aggregate financial
milestone set for the two years, the shareholders thereof shall be entitled to
additional shares of the Company as determined in accordance with the 100% Share
Swap Letter.
The foregoing description of the 100% Share Swap Letter is qualified in its
entirety by reference to a form of the 100% Share Swap Letter which is filed as
Exhibit 10.2 to this Current Report and is incorporated herein by reference.
Other Seven Entities
In May and June 2021, Massive Treasure entered into a Share Swap Letter
Agreement (the "51% Share Swap Letter") with the shareholders of each of the
following Hong Kong corporations (collectively, the "51% Entities") to acquire
51% of the issued and outstanding securities of the 51% Entities for an
aggregate amount of 23,589,736 shares of the Company's common stock as set forth
below (the "First Tranche Shares"), based upon the closing price of the common
stock of the Company as of the date of signing the 51% Share Swap Letter and
determined in accordance with the terms of the 51% Share Swap Letter:
Name of Company No. of Shares of COSG Common Stock
Star Credit Limited 3,076,921
VAAV Limited 3,076,922
Long Journey Finance Limited 5,128,205
Rich Finance (Hong Kong) Limited 3,076,922
Lee Kee Finance Limited 3,076,922
Dragon Group Mortgage Limited 3,076,922
Healthy Finance Limited 3,076,922
On the first anniversary of the Closing, the Company is obligated to issue a
second tranche of shares of its common stock, based upon the closing price of
its shares as of the fifth business day prior to such first anniversary as
determined in accordance with the terms of the 51% Share Swap Letter (the
"Second Tranche Shares"). Upon the issuance of the Second Tranche Shares, each
of the 51% Entities will deliver the remaining 49% of the issued and outstanding
securities to the Company to become wholly owned subsidiaries of the Company.
The acquisition of the 51% Entities consummated in May 2021. The Company
intends to issue the First Tranche Shares in the immediate future.
Each of the 51% Entities are obligated to meet certain financial milestones in
each of the two year anniversaries following the Closing. Failure to meet such
milestones will result in a clawback of the shares issued to the shareholders.
On the second anniversary of the Closing, if any 51% Entity exceeds the
aggregate financial milestone set for the two years, the shareholders thereof
shall be entitled to additional shares of the Company as determined in
accordance with the 51% Share Swap Letter.
The foregoing description of the 100% Share Swap Letter is qualified in its
entirety by reference to a form of the 51% Share Swap Letter which is filed as
Exhibit 10.3 to this Current Report and is incorporated herein by reference.
CORPORATE HISTORY
Overview
As a result of the consummation of our Massive Treasure acquisition, we operate
in two business segments: (i) the physical arts and collectibles business; and
(ii) the financing/money lending business.
We operate our physical arts and collectibles business through Coinllectibles
Pte Ltd, a Singapore corporation ("Coinllectibles"), pursuant to which we
provide authentication, valuation and certification (AVC) service, sale and
purchase, hire purchase, financing, custody, security and exhibition (CSE)
services to art buyers through traditional methods as well as through leveraging
blockchain technology through the creation of non-fungible tokens (NFTs). We
initially intend to focus on customers located in Hong Kong and expand
throughout Asia.
3
We conduct our financing/money lending business through the 9 subsidiaries of
Coinllectibles DeFi Limited, our Hong Kong subsidiaries which are licensed under
Hong Kong's Money Lenders Ordinance. We primarily provide unsecured personal
loan financings to private individuals. We also have a small portfolio of
mortgage loans. Revenue is generated from interest received from the provision
of loans to private individual customers.
Our corporate chart is below:
[[Image Removed: cosg_8kimg7.jpg]]
On June 14, 2021, Asia Cosmos Group Limited, an entity controlled by our former
Chief Executive Officer, and Koon Wing Cheung agreed to sell 6,230,618 and
8,149,670 shares, respectively, of our common stock to Chan Man Chung for a
total purchase price of four hundred twenty thousand dollars (US$420,000). The
common stock being sold constitutes sixty-six and seventy-seven hundredth
percent (66.77%) of the issued and outstanding shares of our common stock. The
sellers relied on the exemption from registration pursuant to Section 4(2) of,
and Regulation D and/or Regulation S promulgated under the Act in selling the
Company's securities to Mr. Chan. The funds came from the personal funds of Mr.
Chan, and was not the result of a loan. The closing occurred June 28, 2021.
4
In connection with such sale, Miky Wan, our former CEO, President and CFO
resigned from her positions as a director and sole executive officer of the
Company. Concurrently therewith, Messrs. Chan Man Chung, Lee Ying Chiu Herbert
and Tan Tee Soo were appointed to the Company's Board of Directors and Chan Man
Chung was appointed to serve as the CEO, CFO and Secretary of the Company.
Prior to the change in control, we were a Hong Kong based specialty commercial
logistic company. Our specialty commercial logistic company operated through Lee
Tat Transportation Int'l Limited, our wholly owned Hong Kong subsidiary ("Lee
Tat"), and provided timely and reliable logistics and delivery services to
commercial clients located in Hong Kong
History
We were incorporated in the state of Nevada on August 14, 1987, under the name
Shur De Cor, Inc. and engaged in developing certain mining claims. In April
1999, Shur De Cor merged with Interactive Marketing Technology, a New Jersey
corporation that was engaged in the business of developing and direct marketing
of consumer products. As the surviving company, Shur De Cor changed its name to
Interactive Marketing Technology, Inc. Shur De Cor's then management resigned
and the management of Interactive New Jersey became the Company's management.
The prior management of Shur De Cor retained Shur De Cor's business and assets.
After that acquisition, the Company, through a wholly owned subsidiary, IMT's
Plumber, Inc., produced, marketed, and sold a licensed product called the
Plumber's Secret, which was discontinued in fiscal 2001. In May 2002, the
Company ceased to actively pursue its product development and marketing business
and actively sought to either acquire a third party, merge with a third party or
pursue a joint venture with a third party in order to re-enter its former
business of development and direct marketing of proprietary consumer products in
the United States and worldwide.
On November 17, 2004, the Company acquired MPL, a company organized under the
laws of the British Virgin Islands, and its subsidiaries in accordance with the
terms of a Share Exchange Agreement executed by the parties (the "2004
Agreement"). In connection with the acquisition, the Company issued an aggregate
of 109,623,006 shares of its common stock to Imperial International Limited, a
company incorporated under the laws of the British Virgin Islands ("Imperial"),
the sole shareholder of MPL, in exchange for 100% of the issued and outstanding
shares of MPL capital stock (the "2004 Share Exchange"). Upon completion of the
share exchange, MPL became the Company's wholly owned subsidiary and the
Company's former owner transferred control of the Company to Imperial. The
Company relied on Rule 506 of Regulation D of the Securities Act of 1933, as
amended (the "Act"), in regard to the shares that we issued pursuant to the 2004
Share Exchange. The Company treated this transaction as a qualified "business
combination" as defined by Rule 501(d). The Company relied on the exemption from
registration pursuant to Section 4(2) of, and or Regulation D promulgated under,
the Act in issuing the Company's securities.
In connection with the 2004 Share Exchange, the Company: (i) changed its name
from Interactive Marketing Technology, Inc. to China Artists Agency, Inc.
("China Artists"); (ii) obtained a new stock symbol, "CAAY", and CUSIP Number,
effective on December 21, 2004; (iii) increased its authorized common stock to
200,000,000 shares; (iv) effectuated a 1 for 1.69 reverse stock split; and (v)
spun off the Company's existing business into a separate public company, All
Star Marketing, Inc., a Nevada corporation ("All Star"). All Star was formed as
a wholly owned subsidiary of the Company. The Spin-off was satisfied by means of
a pro-rata share dividend to the Company's shareholders of record as of December
10, 2004. The purpose of the Spin-Off was to allow the subsidiary to operate as
a separate public company and raise working capital through the sale of its own
equity. This allowed the Company's management to focus on its business, while at
the same time, allowing the spun-off company to have greater exposure by trading
as an independent public company. Additionally, the shareholders and the market
would then more easily identify the results and performance of the Company as a
separate entity from that of All Star. In August 2005, the Company changed its
name to China Entertainment Group, Inc. and, effective August 9, 2005, obtained
a new stock symbol "CGRP", and CUSIP Number.
5
Effective July 22, 2010, the Company merged with Safe and Secure TV Channel,
LLC, a Delaware limited liability company (the "Merger"). In connection with the
Merger, the management of the Company resigned and was replaced by the
management and principals of Safe and Secure TV Channel, LLC. The holders of
interests in Safe and Secure TV Channel, LLC exchanged their interests for
approximately 50.2% of the issued and outstanding stock of the Company. In
September 2010, the Company effectuated a 9.85 for one stock split to
shareholders of record as of August 23, 2010. After the Merger, the Company
became a television network and multimedia information and distribution company
focused on serving the homeland security and emergency preparedness industry.
On February 15, 2016, the Company sold to Asia Cosmos Group Limited, a private
limited liability company incorporated under the laws of British Virgin Islands
("ACOSG"), 10,000,000 shares of its common stock at a per share price of $0.027.
ACOSG's sole shareholder is Miky Wan. The Company relied on the exemption from
registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S
promulgated under the Act in selling the Company's securities to ACOSG. In
connection with the private placement to ACOSG, a change of control occurred and
Bryan Glass resigned from his position as President, Secretary, Treasurer and
Chairman of the Company.
Miky Wan was appointed to serve as Chief Executive Officer, Chief Operating
Officer, President and Director, effective February 19, 2016.
Effective February 26, 2016, the Company changed its name to Cosmos Group
Holdings Inc. and filed a Certificate of Amendment to such effect with the
Nevada Secretary of State. The name change and the related stock symbol change
to "COSG" were approved by the Financial Industry Regulatory Authority on March
31, 2016. The Company also increased the number of its authorized common stock,
par value $0.001, from 90,000,0000 shares to 500,000,000 and its preferred
stock, par value $0.001, from 10,000,000 to 30,000,000 shares.
On January 13, 2017, the Company sold 200,000,000 shares of its common stock to
ACOSG at a per share price of $0.001 per share for aggregate consideration of US
$200,000. The Company relied on the exemption from registration pursuant to
Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act
in selling the Company's securities to ACOSG.
Acquisition of Lee Tat, Our Logistics Business
On May 12, 2017, we acquired all of the issued and outstanding shares of Lee Tat
. . .
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
10.1 Sale Exchange Agreement, effective June 17, 2021, by and between
Cosmos Group Holdings Inc. and Massive Treasure Limited*
10.2 Form of Share Swap Letter Agreement (for 100% of the
securities)*
10.3 Form of Shares Swap Letter Agreement (for 51% of the
securities)*
10.4 Consultancy Agreement, dated August 2, 2021, by and between Cosmos
Group Holdings Inc. and CHAN Man Chung*
10.5 Consultancy Agreement, dated August 2, 2021, by and between Cosmos
Group Holdings Inc. and TAN Tee Soo*
21 Subsidiaries*
*Filed herewith
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