On Friday, August 30, 2013, Cumberland Hills Ltd (CHLL) filed an 8K for an acquisition agreement which will include a change in control, a change in business operations, and a name change to American Heritage International Inc.
We have previously done research on CHLL back on April 12, 2013 found here. With the new big acquisition agreement and corresponding changes it is time to do an updated report. The following is a re-post of our original research followed by all updates since April 12, 2013.
Cumberland Hills Ltd was set up as a business entity in Nevada on January 19, 2010 with Daniel A. Kramer of Val-U-Corp Services, Inc doing the filing and initially holding all of the officer/director positions. We have seen Daniel A. Kramer play this role with a few other penny stocks including some we recently researched including:
Almah Inc (AAHC) - Synergy Law Group
PetroSonic Energy Inc (PSON) - Conrad Lysiak
Cassidy Ventures Inc (CSVN) - Thomas E Puzzo
Ring Energy Inc (RNGE) - Bacchus Law (Penny Green and Faiyaz Dean)
Sunvalley Solar Inc (SSOL) - Longabaugh Law Offices
Lisboa Leisure Inc (LISB) - Stepp Law
Osler Inc (OSLE) - Loev Law Firm
Odenza Corp (ODZA) - Thomas E Puzzo
Mascot Ventures Inc (MCTV) - Thomas E Puzzo
Hondo Minerals Corp (HMNC) - Thomas E Puzzo
Life Care Medical Devices Limited (HTHH) - Synergy Law Group
Immediately after Cumberland Hills Ltd was incorporated, Joseph Isaacs was appointed as the sole officer/director of the entity and issued 875,000 shares for $3,500 ($.004/share). A few months later Joseph Isaacs was issued another 500,000 shares for $10,000 ($.02/share).
29 year-old Joseph Isaacs was from British Columbia where he spent 6 years working with Canwest Surveying Services from 2003 - 2009. In 2009, Joseph Isaac went to an Institute of scrap recycling Industries Inc convention where he first learned about paper recycling. A few weeks later he started Cumberland Hills Ltd with the plan for Cumberland Hills Ltd to become a paper recycling company.
On January 20, 2011, Cumberland Hills Ltd sold 1,050,000 shares to 30 different seed shareholders (35,000 each) for $21,000 ($700 each).
On March 15, 2011 Cumberland Hills Ltd effected a 30:1 forward split to its stock. This made the pre-S-1 share count look as follows:
Joseph Isaacs - 41,250,000 shares costing $.000327/share
Seed Shareholders - 31,500,000 shares costing $.00067/share
On January 21, 2012, Cumberland Hills Ltd issued a $40,000 Promissory Note to Elizabeth Smith. The note earns interest at 5% and will come due on April 4, 2014.
On May 31, 2012, Cumberland Hills Ltd filed an S-1 to go public.
Cumberland Hills Ltd is a developmental stage company engaged in the business of paper recycling. To start out, Cumberland Hills Ltd was engaging in the business of acquiring and reselling raw materials for paper recycling.
The attorney helping with the S-1 filing was William B Barnett of Barnett & Linn Attorneys at Law. Other tickers linked to William B Barnett include (ROKR, EMPM, USOG, WELL, NWTR, CGLD, Barrier 4 Inc, FROG, and Shop Eat Live, Inc). Of those tickers, William B Barnett was involved in doing the S-1 filing to take 4 of them public:
Cascade Springs Ltd - now known as Colorado Gold Mines Inc (CGLD)
Cumberland Hills Ltd (CHLL)
Barrier 4 Inc
Shop Eat Live Inc
The accountant helping with the S-1 filing was LBB & Associates Ltd LLP.
During the 1st three months of 2012 prior to going public, Cumberland Hills Ltd acquired $10,276 worth of raw materials which they were able to recycle for resale making $18,429 (a profit of $8,153).
The S-1 filing was approved on September 20, 2012.
Cumberland Hills Ltd (CHLL) is a mirror of Colorado Gold Mines Inc (CGLD)
While going through the list of past tickers taken public by William B Barnett (as the attorney) I noticed one of those tickers was CGLD (formerly Cascade Springs Ltd now known as Colorado Gold Mines Inc). I quickly noticed that William B Barnett was not the only thing the two tickers had in common. Other things that both tickers have in common are:
1) LBB & Associates Ltd LLP as the accountant
2) 30 seed shareholders that acquired their stock for $21,000. Some of the same seed shareholders owned stock in both CHLL and CGLD:
In case you are counting that is 26 out of 30 seed shareholders were part of both tickers
3) A pre-S-1 forward split.
CHLL did a 30:1 pre-S-1 forward split
CGLD did a 25:1 pre-S-1 forward split
4) The CEO of both shells owned 41,250,000 shares when the ticker went public
William Delahunte - 41,250,000 shares
Joseph Isaacs - 41,250,000 shares
You may recall that on March 7th CGLD got promoted by Tribeca. You may also recall that CGLD got promoted by Stock Pyscho on April 8th. Neither promotion offered very many profits. This tells us that this group of insiders that obviously controls both tickers has no reservations about relentlessly and selfishly dumping stock on retail investors destroying the value of their stock while taking quick profits. When you own stock that cost only $.0003/share even selling at $.03/share is a huge profit.
After gaining public trading status, on October 29 2012, CHLL borrowed $29,000 from Robert Sawatsky. In December of 2012, CHLL borrowed another $5,000 from Robert Sawatsky and agreed to issued him 2,000,000 shares for his assistance in helping CHLL to go public.
Robert Sawatsky was involved in one other public ticker. You guessed it - Colorado Gold Mines Inc (CGLD). For CGLD, Robert Sawatsky was disclosed as being a friend of the CEO, the provider of the geology reports, an assistant with helping the ticker go public, a consultant, a shareholder, and debt provider.
I think we should found the key individual behind both CGLD to CHLL.
More Information - Business Operations + 2nd Forward Split
Cumberland Hills Ltd has continued to make some small sales in their raw material resale business. In 2012, CHLL made a total of $54,396 in revenues. It hasn't been enough to cover operating costs though and even with the loans from Elizabeth Smith and Robert Sawatsky, CHLL is still already nearly out of cash.
At some point Shelley May Walker was added as the secretary of the company, but that has only been disclosed at the Nevada SOS so far.
On April 11, 2013, CHLL effected its second forward split. This time a 2:1 forward split. The new share count will look as follows:
Authorized - 200,000,000 shares
Outstanding - between 145,500,000 shares and 149,500,000 shares
Joseph Isaacs - 82,5000,000 shares - costing $.00015/share
Seed shareholders - 63,000,000 shares (free trading) - costing $.00033/share
Robert Sawatsky - 4,000,000 shares if they were issued yet
What to Expect Next
If CHLL continues to follow in the footsteps of its big sister ticker, CGLD, then a change of control, name change, and symbol change could be on the way. At some point CHLL will almost certainly get promoted, and if history has taught us anything, this group of insiders will not be interested in creating profits for retail investors. They will only be interesting in dumping their $.0003/share free trading stock without and regard for the harm it will do to most of the retail investors.
Updated Research since April 12, 2013
Acquisition Agreement / Change of Control / Change of Business Operations
On August 30, 2013, CHLL filed a big 8K with lots of corporate changes
CHLL entered into an Asset Purchase Agreement with American Heritage LLC and its principals Anthony Sarvucci, Vincent Bonifatto and Anderson Levine LLC. Under the Purchase Agreement, CHLL acquired certain assets and intellectual property related to the electronic cigarette business in exchange for 15,300 shares of newly created Series A Convertible Preferred Stock.
According to the actual asset purchase agreement all CHLL acquired was Artwork, Branding and Domain names including: www.americanheritageonline.com. No patents, No contracts, No property.
Change in Control:
As part of the acquisition agreement Joseph Isaacs resigned with an agreement that he would get to keep all of the former business operations in exchange for the cancellation of all debt owed to him and the cancellation of 46,500,000 shares held by him and 4,000,000 shares held by Robert Sawatsky. The other 36,000,000 shares owned by Joseph Isaacs would get transferred to Anthony Sarvucci, Vincent Bonifatto, and Anderson Levine LLC (Erik Levine) for a total purchase price of $36,000.
The 15,300 Series A Convertible Preferred Stock would assure that Anthony Sarvucci, Vincent Bonifatto and Anderson Levine LLC would have voting rights. Each share of Series A Convertible Preferred Stock is equal to 10,000 votes and can be converted into 10,000 common shares (153,000,000 common shares total).
Anthony Sarvucci was assigned as the new President, and CEO, and director. Vincent Bonifatto was assigned as the new CFO, Secretary, Treasurer, and director.
Anthony Sarvucci who is from Calgary recently took over control of Kat Racing Inc (KTRC) changing the name/symbol to Praire West Oil & Gas Ltd (POIL) through a similar type of merger. Prior to that, Anthony Sarvucci lists that he was a consultant for several public companies from 2004 - 2009. Anthony Sarvucci did a lot of investor relation work using his entity Optima Capital Inc. Most of the companies that I found appear to be Canadian issuers.
Vincent Bonifatto is an investment banker from Las Vegas.
Erik Levine is the current Chairman, President and CEO of Bailey Francis Corp, a blank check company. He is a Real Estate agent from California that has been trading stocks since 2006.
The corporate address was moved to 2087 Desert Prairie St., Las Vegas. This address is the same address used by Vincent Bonifatto for his personal business, VB Venture Capital LLC. A search through the property records shows the owner as Joseph & Carol Bonifatto.
Joseph Bonifatto is a Real Estate agent from Las Vegas.
The most interesting tidbit about this address is that it was also the original address of VB Clothing Inc (VBCO) which later merged with and became VizConnect (VIZC). See our VIZC report here. The VBCO filings never disclosed that Vincent Bonifatto was involved in that ticker, but we now know what the VB stood for (Vincent Bonifatto). VIZC is still considered a pre-promo ticker waiting on that future paid promotion.
Cumberland Hills Ltd has filed to do a name change to American Heritage International Inc. We expect a symbol change will also be granted.
New Business Operations:
With the completion of the asset purchase agreement, CHLL will now be in the electronic cigarette business. As seen on their website here which is still under construction.
They will begin sales with their "American Heritage™ line which will come in 3 varieties: Regular, Light, and Menthol.
The company says they plan to introduce other brands in the future including American One, American Freedom, American Nights, American Standard, and Smoking Alternatives like gums and mints.
Since we know from the actual Asset Purchase Agreement that no patents or products are being acquired I got a little bit suspicious about the operations. I quickly found another website for a company called American Heritage Revolution that produces and sells electronic cigarettes under the same brand name. Turns out that you can become a distributor for American Heritage and that is what I believe that American Heritage International Inc is - just a distributor. They do not disclose this in their 8k filings and it makes me wonder if they are intentionally trying to mislead investors.
New Share Count
Authorized - 500,000,000 shares
Anthony Sarvucci, Vincent Bonifatto, and Erik Levine - 36,000,000 shares
Anthony Sarvucci, Vincent Bonifatto, Erik Levine - 15,300 preferred shares convertible into 153,000,000 common shares
Seed shareholders - 63,000,000 shares (free trading) costing $.00033/share
CHLL is a big step closer to a future paid promotion. We still don't have super high hopes for a strong high level awareness campaign based on the history of the two most closely connected tickers - CGLD and VIZC, but there may still be a chance that some profits could be realized especially if we get a good promoter or something happens with the business operations that make this a more attractive ticker. A name and symbol change are in the works, but we have already started to see some price action today with a 5,000 share block pushing the price up from $.07/share to $.25/share. It is possible that CHLL could be manipulated higher, but it becomes riskier the higher price gets with 63,000,000 free trading shares.