MASTERMIND, INC. - 10-K filing on 2015-04-30

Terminated Merger Transaction	12 Months Ended
Dec. 31, 2014
Terminated Merger Transaction
Terminated Merger Transaction	3. Terminated Merger Transaction On October 31, 2014, the Company entered into a Stock and Membership Interest Exchange Agreement (the “Agreement”) between the Company and the members (equity owners) of House of Knipschildt, LLC, a Connecticut limited liability company (“HOK”). The Agreement provided for the acquisition of all of the outstanding membership interests of HOK by the Company in exchange for 4,200,000 newly issued unregistered shares of the Company’s common stock. HOK is a privately owned manufacturer, wholesaler and retailer of hand-made and other high-end chocolate products, and is based in Norwalk, Connecticut. HOK has one retail store. The Agreement provided for various conditions to closing, including the completion of a due diligence review by both the Company and HOK, completion of an audit of HOK’s financial statements and the absence of any material adverse change in the business, assets or condition (financial or otherwise) of either the Company or HOK. The Company also had the right to terminate the Agreement if satisfaction of any closing condition by December 15, 2014, or such later date as the parties may have agreed upon, became impossible (other than through the failure of the Company to comply with its obligations under the Agreement). As a condition to the closing of the Agreement, the Company was required to complete a private placement of newly issued unregistered shares of the Company’s common stock for net proceeds of at least $900,000. The 4,200,000 shares of common stock that were to be issued to the equity owners of HOK at closing would have constituted approximately 50.1% of the Company’s outstanding shares of common stock, after issuance of the new shares in the private placement. On March 18, 2015, the Company elected to terminate the Agreement for, among others, the following reasons: (i) numerous negative matters that came to light during the Company’s due diligence review of HOK; (ii) ongoing delays and deficiencies in producing financial statements for 2013 and 2014 in a form capable of being audited; and (iii) material adverse changes in HOK’s business, assets and financial condition. The Company does not believe that the termination of the Agreement will result in any material termination penalty or other liability to the Company. The Company incurred costs related to the terminated acquisition of $53,957 during the year ended December 31, 2014 and $4,711 during the three months ended March 31, 2015.

Terminated Merger Transaction

12 Months Ended

Dec. 31, 2014

3. Terminated Merger Transaction

On October 31, 2014, the Company entered into a Stock and Membership Interest Exchange Agreement (the “Agreement”) between the Company and the members (equity owners) of House of Knipschildt, LLC, a Connecticut limited liability company (“HOK”). The Agreement provided for the acquisition of all of the outstanding membership interests of HOK by the Company in exchange for 4,200,000 newly issued unregistered shares of the Company’s common stock. HOK is a privately owned manufacturer, wholesaler and retailer of hand-made and other high-end chocolate products, and is based in Norwalk, Connecticut. HOK has one retail store.

The Agreement provided for various conditions to closing, including the completion of a due diligence review by both the Company and HOK, completion of an audit of HOK’s financial statements and the absence of any material adverse change in the business, assets or condition (financial or otherwise) of either the Company or HOK. The Company also had the right to terminate the Agreement if satisfaction of any closing condition by December 15, 2014, or such later date as the parties may have agreed upon, became impossible (other than through the failure of the Company to comply with its obligations under the Agreement). As a condition to the closing of the Agreement, the Company was required to complete a private placement of newly issued unregistered shares of the Company’s common stock for net proceeds of at least $900,000.

The 4,200,000 shares of common stock that were to be issued to the equity owners of HOK at closing would have constituted approximately 50.1% of the Company’s outstanding shares of common stock, after issuance of the new shares in the private placement.

On March 18, 2015, the Company elected to terminate the Agreement for, among others, the following reasons: (i) numerous negative matters that came to light during the Company’s due diligence review of HOK; (ii) ongoing delays and deficiencies in producing financial statements for 2013 and 2014 in a form capable of being audited; and (iii) material adverse changes in HOK’s business, assets and financial condition. The Company does not believe that the termination of the Agreement will result in any material termination penalty or other liability to the Company.

The Company incurred costs related to the terminated acquisition of $53,957 during the year ended December 31, 2014 and $4,711 during the three months ended March 31, 2015.