| Note 1 - Description Of The Business Of Acquired Sales Corp. | NOTE 1 – DESCRIPTION OF THE BUSINESS OF ACQUIRED SALES
CORP. Acquired Sales Corp. (hereinafter sometimes referred to as “Acquired
Sales”, the “Company”, “AQSP”, “Acquired”, the “Company”, “we”,
“us”, “our”, etc.) was organized under the laws of the State of Nevada on January 2, 1986. The Company
does not currently have any business or any sources of revenue. The Company wants to acquire all or a portion of one or more operating
businesses. Management of the Company currently is exclusively exploring potential
acquisitions of all or a portion of one or more operating businesses involving the manufacture and sale of cannabidiol (CBD)-infused
products such as beverages, muscle/joint rubs, oils, crystals, tinctures, bath bombs, isolate, relief balms, elixirs, body washes,
med sticks, lotions, vape pens and cartridges, shatter, and gummies (a “CBD-Infused Products Company”). In order to consummate a particular acquisition of a CBD-Infused
Products Company, management of the Company is open-minded to the concept of also acquiring all or a portion of one or more operating
businesses and/or assets that are related to such CBD-Infused Products Company, for example operating businesses and/or assets
involving distilled spirits, beer, wine, hemp, paraphernalia, cannabis, tetrahydrocannabinol (THC)-infused products, and real estate. Signing
of Letter of Intent to Acquire 100% of the Ownership Interests of CBD Lion LLC On May 8, 2019, Acquired Sales Corp. (the “Company”),
Gerard M. Jacobs (“GJacobs”) and William C. “Jake” Jacobs (“WJacobs”) entered into a Letter
of Intent with CBD Lion LLC (“Lion”) and its owners (the “Lion Owners”) to, subject to a number of conditions,
acquire 100% of the ownership of Lion (the “Transaction”). The consideration to be paid by the Company in the proposed
acquisition of Lion is: two million dollars ($2,000,000) in cash, plus unregistered common stock of the Company (the "Stock
Consideration") in an amount that is the greater of: (i) five million (5,000,000) shares or (ii) a number of shares with a
value at closing of the Transaction, based on the Company’s share price, equal to 50% of the value of the aggregate consideration
deemed paid to the Lion Owners for their ownership interests in Lion, which could hypothetically increase the Stock Consideration
to a number significantly higher than five million (5,000,000). The Lion Owners shall have "piggyback registration rights"
for the common stock shares underlying the Stock Consideration and "demand registration rights" that are triggered if no
registration statement covering the Stock Consideration is filed with the U.S. Securities and Exchange Commission within 120 days
following the closing of the Transaction. In addition, the Letter of Intent requires that at the closing of the Transaction, the
Company shall cause up to four hundred sixty-two thousand four hundred thirty dollars ($462,430) of related party debt owed by
Lion to be repaid in full. The terms of the proposed Transaction must be set forth in a definitive
agreement. There are no assurances that the Company will be successful in negotiating an acceptable definitive agreement, when
or whether a definitive agreement will be reached between the parties, or that the proposed Transaction will be consummated. Even
if a definitive agreement is executed, the terms of the proposed Transaction may change materially from the terms set forth in
the Letter of Intent. There will be many conditions to closing of the Transaction, many of which are outside of the parties’
control and we cannot predict whether these conditions will be satisfied. There are no assurances when or if closing of the Transaction
will occur, even if the parties successfully negotiate and sign a definitive agreement. Closing of the acquisition of Lion is subject to a number of conditions,
including but not limited to the completion of due diligence investigation of Lion by the Company that is acceptable to the Company,
completion of a capital raise by the Company of at least $4 million, completion of an audit of Lion acceptable to the Company,
execution of definitive acquisition documents, execution of employment agreements with certain key Lion executives, obtaining necessary
third-party approvals, including a tax opinion to be provided by Lion’s tax counsel indicating that the proposed Transaction
will qualify as a tax-free reorganization, and completion of all necessary securities filings. In the event that most of the foregoing
conditions are met, as detailed in the Letter of Intent, prior to the closing of the proposed Transaction, the Company will make
a $300,000 loan to Lion to be used by Lion exclusively for growth capital. The Company is currently engaged in due diligence of Lion and has
not yet started to negotiate a definitive agreement for the proposed Transaction. The Letter of Intent will terminate if (i) no
audit of Lion satisfactory to the Company has been delivered by August 31, 2019; the Company fails to raise $4 million by September
30, 2019; or (iii) the proposed Transaction has not closed by October 31, 2019. The Letter of Intent contains customary provisions prohibiting Lion
from soliciting or encouraging any other acquisition proposal or entering into any negotiations or agreements for an alternative
acquisition or financing transaction prior to the termination of the Letter of Intent. In the event that the proposed acquisition of Lion is completed,
the Letter of Intent requires that as soon as practicable following the closing of the proposed sale, the Company will change its
name to "CBD Lion Corp.” and request a new trading symbol that better relates to the new proposed name. Stock
Sale and Purchase Agreement - Ablis Holding Company Ablis Holding Company ("Ablis")
is a rapidly growing leader in the exciting CBD-infused beverage industry. Ablis' all-natural, shelf-stable, GMO-free, non-alcoholic,
lemon ginger, cranberry blood orange, and 0 calorie lemon water beverages target the mainstream health market and contain no THC.
Ablis also manufactures and sells CBD-infused rubs, oils and crystals. Ablis' beverages are now being distributed in 11 states,
online throughout the country, Puerto Rico and Guam. Also, Silver Moon Brewing, a brewery in Bend, has recently begun producing
and selling Hazibliss, Oregon’s first hemp CBD-infused draft beer that incorporates Ablis’ cranberry blood orange CBD
beverage. On April 30,
2019, the Company, GJacobs, and WJacobs entered into a Stock Sale and Purchase Agreement with Ablis, Ablis, Inc., and James A.
Bendis (“Bendis”) wherein the Company paid $399,200 for a post transaction 4.99% ownership of Ablis' equity. Ablis
is in the business of manufacturing and sale of CBD-infused beverages, and CBD-infused products. The Stock Sale and Purchase Agreement
requires that Ablis use a portion of the purchase proceeds to pay off at least $381,000 of its liabilities. A The Stock
Sale and Purchase Agreement also sets out terms for an additional equity purchase of Ablis such that the Company may purchase up
to an additional 15% of Ablis for $1,200,000 so that the Company would then own 19.99% of the ownership equity of Ablis. Series A Convertible Preferred Stock ("Preferred
Stock") The management team of Ablis will continue to lead Ablis. The
terms of the Stock Sale and Purchase Agreement entitle GJacobs to be a member of the board of directors of Ablis, entitles WJacobs,
to be provided with access to Ablis' financial information, grants WJacobs, financial oversight functions over Ablis, and allows
WJacobs the right to provide consulting/advisory services to Ablis. WJacobs’ reasonable expenses will be covered by Ablis.
The Stock Sale and Purchase Agreement also requires that GJacobs and WJacobs be introduced to the owners of Ablis’ CBD isolate
suppliers, and any other companies in the hemp, CBD and cannabis industries with whom Ablis and/or Bendis have relationships, and
whom may potentially be interested in entering into a stock sale or merger with the Company. The Stock
Sale and Purchase Agreement requires that Ablis evaluate and seriously consider a sale of Ablis or taking Ablis public within 60
months from April 30, 2019 and that it use commercially reasonable best efforts, to close a mutually acceptable alternative exit
opportunity for the Company within 72 months from April 30, 2019. The Company’s investment in Ablis made the Company a minority
owner of Ablis. As a minority owner, the Company will not be able to recognize any portion of Ablis’ revenues or earnings
in the Company’s financial statements. The Company may, at some point, receive commissions for helping to sell Ablis' products
either online or offline. The Company’s investment in Ablis will be tested for potential impairment of value on a quarterly
basis. Stock
Purchase Agreement - Bendistillery Inc. and Bend Spirits, Inc. Founded in 1996, Bendistillery Inc. ("Bendistillery")
is an award-winning craft distillery, with an outstanding reputation for producing Crater Lake Spirits brands including vodkas,
gins, whiskeys, and white label brands offered through Bend Spirits, Inc. ("Bend Spirits"). On
April 30, 2019, the Company, GJacobs, and WJacobs entered into a Stock Purchase Agreement with Bendistillery, Bend Spirits, Bendis
Homes Pinehurst, LLC, an Oregon limited liability company (“Landowner”), Bendis, and Alan T. Dietrich (“Dietrich”)
wherein the Company paid $1,347,300 for a post transaction 4.99% ownership of Bendistillery’s equity and $149,700 for a
post transaction 4.99% ownership of Bend Spirits’ equity. Bendistillery and Bend Spirits are in the business of manufacturing
and sale of alcoholic beverages, and the manufacturing of CBD-infused beverages and CBD-infused products. The Stock Purchase Agreement
requires that Bendistillery and Bend Spirits use a portion of the purchase proceeds to pay off at least $835,000 of their collective
liabilities. The Stock
Purchase Agreement also sets out terms for an additional equity purchase of Bendistillery such that the Company may purchase up
to an additional 15% of Bendistillery for $4,050,000 so that the Company would then own 19.99% of the ownership equity of Bendistillery.
Per the terms of the Stock Purchase Agreement, the Company may also purchase up to an additional 15% of Bend Spirits for $450,000
such that the Company would then own 19.99% of the ownership equity of Bend Spirits. Pursuant to
the Stock Purchase Agreement, Landowner (as landlord) and Bendistillery (as tenant) have entered into a long-term lease of the
23 acres in Tumalo outside Bend, Oregon, where Bendistillery and Bend Spirits conduct their businesses (the “Real Estate”),
which lease (the “Lease”) is consistent with the following terms: the initial term of the Lease is 20 years at a rent
of $17,500 per month; Tenant has the right, in its sole discretion, to exercise a series of options to extend the term of the Lease
up to a maximum of 99 years; and Tenant has a 60-day right of first refusal if Landowner ever decides to sell all or any portion
of the Real Estate. Bendis is the owner of Landowner. The management teams of Bendistillery
and Bend Spirits will continue to lead their respective companies. The terms
of the Stock Purchase Agreement entitle GJacobs to be a member of the board of directors of Bendistillery and Bend Spirits, entitle
WJacobs to be provided with access to financial information, grants WJacobs financial oversight functions over Bendistillery and
Bend Spirits, and allows WJacobs the right to provide consulting/advisory services to Bendistillery and Bend Spirits. WJacobs’
reasonable expenses will be covered by Bendistillery and Bend Spirits, as well as an advisory fee of not less than $5,000 per quarter.
The Stock Purchase Agreement also requires that GJacobs and WJacobs be introduced to the owners of Deschutes Brewery, Silver Moon
Brewing, LBD Beverage, and any other companies in the distilled spirits, beer, wine, hemp, CBD and cannabis industries with whom
Bendistillery, Bend Spirits, Bendis and/or Dietrich have relationships, and whom may potentially be interested in entering into
a stock sale or merger with the Company. The Stock
Purchase Agreement requires that Bendistillery and Bend Spirits evaluate and seriously consider a sale of Bendistillery and Bend
Spirits or taking them public within 60 months from April 30, 2019 and that they use commercially reasonable best efforts to close
a mutually acceptable alternative exit opportunity for the Company within 72 months from April 30, 2019. The Company’s investments in Bendistillery
and Bend Spirits made the Company a minority owner of these companies. As a minority owner, the Company will not be able to recognize
any portion of Bendistillery’s or Bend Spirits’ revenues or earnings in the Company’s financial statements. The
Company may, at some point, receive commissions for helping sell Bendistillery’s products either online or offline. The Company’s
investments in Bendistillery and Bend Spirits will be tested for potential impairment in value on a quarterly basis. Acceptance
of Subscriptions From Accredited Investors to Purchase Newly Issued Series A Convertible Preferred Stock Between February
27, 2019 and May 13, 2019, the Company accepted subscriptions from accredited investors to purchase 66,150 shares of newly issued
Preferred Stock for an aggregate purchase price of $6,615,000 in cash. These 66,150 shares of Preferred Stock are convertible at
the option of the holders into 6,615,000 shares of newly issued common stock of the Company, or $1.00 per share of common stock
of the Company. The Company has committed to file a registration statement covering the shares of newly issued common stock of
the Company into which the Preferred Stock can be converted (the "Registration Statement"). The Preferred Stock will receive
an annual dividend, and will be subject to mandatory conversion, under terms and conditions set forth in the Certificate of Designation
of the Preferred Stock. Acquisition Process The structure of the Company’s participation in business opportunities
and ventures will continue to be situational. The Company is likely to structure future acquisitions as a purchase of 19.99% or
less, or 50.01% or more, of a target company’s equity ownership interest, or as a so-called tax-free reorganization. It is
likely that the anticipated value of the business and/or securities that the Company acquires relative to the current value of
the Company’s securities will result in the issuance of a relatively large number of newly issued shares of the Company,
and, as a result, substantial additional dilution to the percentage ownership of our current stockholders. Moreover, the Company’s
present management and shareholders may not have control of a majority of our voting shares following a merger or purchase of stock.
It is possible that the shareholders of the acquired entity or the persons who provide the capital to the Company to finance a
merger or purchase of stock will gain control of the Company’s voting stock and the Company’s directors may resign
and new directors may be appointed without any vote by the shareholders. Those directors are entitled to replace the Company’s
officers without stockholder vote. In regard to nearly all of the Company’s potential acquisitions,
the Company is typically focused upon acquiring 19.99% or less, or 50.01% or more, of existing privately held businesses whose
owners are willing to consider selling a percentage of the equity ownership interest of their businesses, or merging their entire
businesses into the Company or a wholly-owned subsidiary of the Company in a so-called tax-free reorganization, and whose management
teams are enthusiastic about continuing to operate their businesses following the transactions with the Company. Closing such purchases of stock or so-called tax-free reorganizations
will likely require the Company to raise millions of dollars of capital, in order to pay the cash portion of the transaction consideration.
The Company can provide no assurance or guaranty whatsoever that it will be able to raise such millions of dollars of capital on
acceptable terms and conditions, if at all. An Investment Committee appointed by the Company’s Board of
Directors, currently consisting of GJacobs, director Thomas W. Hines, CPA CFA, and WJacobs, CPA, will review material furnished
to it and will vote whether or not the Investment Committee believes a potential acquisition is in the Company’s best interests
and the interests of the Company’s shareholders. If the Investment Committee votes unanimously to approve a potential acquisition,
then such acquisition will be presented to the Board of Directors of the Company for their review and a vote. The Company does
not intend to proceed forward with a potential acquisition without the unanimous approval of the Investment Committee and approval
by a majority of the Company’s Board of Directors. The Company intends to source acquisition opportunities through
its CEO and directors and their contacts, and in some cases through finders. These contacts include the shareholders of Ablis,
professional advisors such as attorneys and accountants, securities broker dealers, venture capitalists, members of the financial
community, other businesses and others who may present solicited and unsolicited proposals. Management believes that business opportunities
may become available to us due to a number of factors, including, among others: (1) The Company’s ownership of shares in
one or more CBD-Infused Products Companies; (2) management’s historical experience building large public companies; (3) management’s
contacts and acquaintances; and (4) the Company’s flexibility with respect to the manner in which the Company may be able
to structure, finance, merge with or acquire any business opportunity. The analysis of new business opportunities will be undertaken by
or under the supervision of the Investment Committee appointed by our Board of Directors. Inasmuch as the Company will have limited
funds available to search for business opportunities, the Company will not be able to expend significant funds on a complete and
exhaustive investigation of such business or opportunity. The Company will, however, investigate, to the extent believed reasonable
by the Investment Committee, such potential business opportunities by conducting a so-called “due diligence investigation”. In a due diligence investigation, the Company intends to obtain
and review materials regarding the business opportunity. Typically, such materials will include information regarding a target
business’ products, services, contracts, management, ownership, and financial information. In addition, the Company intends
to cause the Investment Committee to meet personally with management and key personnel of target businesses, ask questions regarding
the target businesses’ prospects, tour facilities, and conduct other reasonable investigation of the target businesses
to the extent of the Company’s limited financial resources and management and technical expertise. There is no guarantee that the Company can obtain or maintain the
funding needed for its operations, including the funds necessary to search for and investigate acquisition candidates, and to close
an acquisition including paying the substantial costs of legal, accounting and other relevant professional services. As of May 13, 2019, the Company has cash on hand of approximately
$4,379,077, which are proceeds from the sale of Preferred Stock between February 27, 2019 and May 13, 2019. In prior years, the
Company’s payables have been greater than their cash on hand. The Company has inconsistent income generating ability and
is therefore reliant on raising money from loans or stock sales. |
