REVERSE MERGER TRANSACTION AND REORGANIZATION	3 Months Ended
Sep. 30, 2013
Notes to Financial Statements
REVERSE MERGER TRANSACTION AND REORGANIZATION	NOTE 6 – REVERSE MERGER TRANSACTION AND REORGANIZATION On July 15, 2013 (the Closing Date), the Company completed its acquisition of all of the issued and outstanding shares of equity of Regal Works, Inc., a Nevada corporation (the Seller). Pursuant to the terms of that certain Stock Purchase and Reorganization Agreement between the Company and Seller dated May 7, 2013, (the “Stock Purchase Agreement”) and filed on Form 8-K, May 14, 2013 the Company was to have approximately 70,000,000 common shares issued and outstanding prior to the reverse stock split and conversion of certain debt instruments into equity, which resulted in approximately 2,800,000 common shares being issued and outstanding after the reverse split but prior to the shares being issued for the acquisition of the Seller. The Agreement outlines the plan to issue 11,200,000 post-reverse split common shares to acquire the Seller in a tax free transaction, for a total of 14,000,000 common shares issued and outstanding post reverse split and post-merger. Pursuant to the Stock Purchase Agreement, the Company acquired all of the issued and outstanding shares of the Seller in exchange for an initial 80% dilution of the issued and outstanding shares of the Company as of the Closing Date, with the release of certain escrowed shares of the Company upon achieving certain performance objectives as set out in the Stock Purchase Agreement. The Stock Purchase Agreement contained representations and warranties from both parties customary for this type of transaction. As part of the closing, certain debts of the Company were satisfied by the issuance of approximately 2,000,000 shares of the Company’s common stock. All such shares were “restricted securities” as such term is defined by the Securities Act of 1933, as amended. Other debts and liabilities were assumed by the Seller as part of the transaction and new debt instruments were entered into by and between the Sellers and the holders of the debt and/or accounts payable. As part of the closing, the Company filed with the Nevada Secretary of State and FINRA (i) a 25-1 reverse stock split and (ii) a name change to “RegalWorks Media, Inc.” As consideration for the shares of common stock of the Seller, the Company paid to the Seller’s shareholders an aggregate purchase price consisting of 11,200,000 shares of common stock, $.001 par value and 5,600,000 shares of Series B preferred stock. Reflecting the 25-1 reverse stock split the Company had a total of 14,000,000 shares of common stock issued and outstanding, a contingent issuance of 5,600,000 shares of preferred stock convertible into 11.200,000 shares of common stock, and a change in control of both management and the Board of Directors of the Company. On July 15, 2013, the Company completed the acquisition of all of the issued and outstanding shares of stock of RWI. Pursuant to the terms of the stock purchase agreement (SPA) between AmerElite and our Company’s shareholders dated May 7, 2013, the Company became a wholly-owned subsidiary of AmerElite Solutions, Inc., which changed its name on July 3, 2013 to RegalWorks Media, Inc. The wholly-owned subsidiary (the operating entity) simultaneously changed its name to RegalWorks, Inc. Our shareholders received 1,000 shares of common stock and 500 shares of preferred stock for each share of the Company common stock held by them. AmerElite on July 3, 2013 effected a 25 for 1 reverse stock split of both its common and preferred equity, along with an increase to its authorized capital of 100,000,000 shares of common stock and 10,000,000 preferred stock. The Company’s shareholders initially own an 80% equity interest and pursuant to certain milestones shall have released from escrow preferred stock increasing that ownership to 90% of the publicly traded company. Pursuant to the SPA, the Company acquired all of the issued and outstanding shares of RWI in exchange for an initial 80% of the issued and outstanding shares of the Company at closing, with our shareholders having the ability to receive additional shares issued and placed in escrow (rights to acquire additional common shares upon conversion of the escrowed preferred shares) of the Company upon achieving certain performance objectives as set out in the SPA. As part of the closing, the publicly traded company filed with the Nevada Secretary of State and FINRA (i) a 25-1 reverse stock split and (ii) a name change to “Regal Works Media, Inc.” As consideration for the shares of common stock of the Company and its shareholders, the publicly traded company paid to our shareholders an aggregate purchase price consisting of 11,200,000 “restricted” shares of common stock, $.001 par value and 5,600,000 shares of preferred stock, convertible into 11,200,000 shares of common stock. As part of the consideration paid by AmerElite to the shareholders of the Company a Series B class of preferred stock was established and 5,600,000 shares were authorized to be issued. Each share of Series B preferred stock is entitled to two votes per share (the “Escrowed Preferred Shares”) and may be converted into two shares of common stock. The Escrowed Preferred Shares are to be held until the following conditions have been met for as full payment of the shares. (i) Based on the following provisions, the RWI shareholders shall have released certain Escrowed Preferred Shares as performance and valuation milestones are met. Set forth is structure and release of the Escrowed Preferred Shares under the agreement that qualifies as a tax-free exchange under the Code. (ii) The publicly traded company achieves one or more of the following milestones within the first twelve (12) months from “closing,” the Company’s shareholders shall have released from Escrow one share of preferred stock (Escrowed Preferred Shares) for every four shares of common stock issued at Closing, or 2,800,000 shares, increasing the Company’s shareholder ownership in the publicly traded company from 11,200,000 shares of common stock to 16,800,000 shares of common stock. · The aggregate market value of the publicly traded company’s common stock is greater than or equal to $20.0 million, computed using the voting and non-voting common and preferred equity held by both affiliates and non-affiliates (‘fully diluted”) for a period of 60 consecutive trading days, determined using the fully diluted shares of the post-reorganization publicly traded company’s shares multiplied by the closing stock price for each day or the use of the volume weighted average price (“VWAP”) if the aggregate market value falls below $20.0 million for a period of 5 days or less; or · The publicly traded company’s share price is greater than or equal to 200% of the lower of $0.50 per share (based on a 25 for 1 reverse stock split) or the publicly traded company’s volume weighted average price for the initial 20 trading days post the ‘closing’ for a period of not less than 60 consecutive trading days; or · The completion of a capital raise or financing of at least $5 million. (iii) If publicly traded company achieves one or more of the following milestones within twelve (12) months from the “closing”, the Company’s shareholders shall have released from Escrow one share of preferred stock (Escrowed publicly traded company Preferred Shares) for every four shares of common stock (or the publicly traded company Escrowed Shares) issued at Closing, or 2,800,000 shares, thereby increasing Company’s shareholder fully diluted ownership from 16,800,000 shares of common stock to 22,400,000 shares of common stock (assuming the milestones referred to above in (ii) have been achieved). · Aggregate market value of publicly traded company is greater than or equal to $30.0 million, computed using the voting and non-voting common and preferred equity held by both affiliates and non-affiliates (‘fully diluted”) for a period of 60 consecutive trading days, determined using the fully diluted shares of the publicly traded company multiplied by the closing stock price for each day or the use of the volume weighted average price if the aggregate market value falls below for a period of 5 days or less; or · The publicly traded company’s share price is greater than or equal to 300% of the lower of $0.50 per share (based on a 25 for 1 reverse stock split) or publicly traded company’s volume weighted average price for the initial 20 trading days post ‘Closing’ or completion of the Transaction for a period of not less than 60 consecutive trading days; or · The completion of a capital raise or financing of at least $10 million. (iv) In the event the publicly traded company does not achieve any one of the following actions set to expire 180 days from the closing an adjustment shall be made by the publicly traded company to the number of shares held by the pre-reverse acquisition shareholder base as identified in paragraph (c) above - (x) the aforementioned 2,800,000 shares of common stock held by the pre-reverse acquisition shareholders collectively hold shares that have a market value that is greater than or equal to $1.4 million based upon a 20-day VWAP during that 180 days; or (xx) the post-closing publicly traded company completes a capital raise or financing of $1 million or more within 60 days from the closing date; or (xxx) the post-closing publicly traded company completes a capital raise or financing or completes an acquisition with a value more than $2 million. If neither (x), (xx) or (xxx) are achieved then the publicly traded company shall compensate the pre-RWMI publicly traded company shareholders the delta between $1.4 million and the market value as determined by the 20-day VWAP of publicly traded company’s common stock 180 days from the Closing Date. Based upon the above the Company was in compliance nor had breached the minimum pricing guarantee for the pre-RWMI publicly traded company shareholders. However if the Company’s common stock price continues to hold around $0.25 per share the Company will be required to issue an additional 1,400,000 shares of common stock to the pre-RWMI publicly traded company shareholders.

REVERSE MERGER TRANSACTION AND REORGANIZATION

3 Months Ended

Sep. 30, 2013

REVERSE MERGER TRANSACTION AND REORGANIZATION

NOTE 6 – REVERSE MERGER TRANSACTION AND REORGANIZATION

On July 15, 2013 (the Closing Date), the Company completed its acquisition of all of the issued and outstanding shares of equity of Regal Works, Inc., a Nevada corporation (the Seller). Pursuant to the terms of that certain Stock Purchase and Reorganization Agreement between the Company and Seller dated May 7, 2013, (the “Stock Purchase Agreement”) and filed on Form 8-K, May 14, 2013 the Company was to have approximately 70,000,000 common shares issued and outstanding prior to the reverse stock split and conversion of certain debt instruments into equity, which resulted in approximately 2,800,000 common shares being issued and outstanding after the reverse split but prior to the shares being issued for the acquisition of the Seller. The Agreement outlines the plan to issue 11,200,000 post-reverse split common shares to acquire the Seller in a tax free transaction, for a total of 14,000,000 common shares issued and outstanding post reverse split and post-merger.

Pursuant to the Stock Purchase Agreement, the Company acquired all of the issued and outstanding shares of the Seller in exchange for an initial 80% dilution of the issued and outstanding shares of the Company as of the Closing Date, with the release of certain escrowed shares of the Company upon achieving certain performance objectives as set out in the Stock Purchase Agreement. The Stock Purchase Agreement contained representations and warranties from both parties customary for this type of transaction.

As part of the closing, certain debts of the Company were satisfied by the issuance of approximately 2,000,000 shares of the Company’s common stock. All such shares were “restricted securities” as such term is defined by the Securities Act of 1933, as amended. Other debts and liabilities were assumed by the Seller as part of the transaction and new debt instruments were entered into by and between the Sellers and the holders of the debt and/or accounts payable.

As part of the closing, the Company filed with the Nevada Secretary of State and FINRA (i) a 25-1 reverse stock split and (ii) a name change to “RegalWorks Media, Inc.”

As consideration for the shares of common stock of the Seller, the Company paid to the Seller’s shareholders an aggregate purchase price consisting of 11,200,000 shares of common stock, $.001 par value and 5,600,000 shares of Series B preferred stock. Reflecting the 25-1 reverse stock split the Company had a total of 14,000,000 shares of common stock issued and outstanding, a contingent issuance of 5,600,000 shares of preferred stock convertible into 11.200,000 shares of common stock, and a change in control of both management and the Board of Directors of the Company.

On July 15, 2013, the Company completed the acquisition of all of the issued and outstanding shares of stock of RWI. Pursuant to the terms of the stock purchase agreement (SPA) between AmerElite and our Company’s shareholders dated May 7, 2013, the Company became a wholly-owned subsidiary of AmerElite Solutions, Inc., which changed its name on July 3, 2013 to RegalWorks Media, Inc. The wholly-owned subsidiary (the operating entity) simultaneously changed its name to RegalWorks, Inc. Our shareholders received 1,000 shares of common stock and 500 shares of preferred stock for each share of the Company common stock held by them. AmerElite on July 3, 2013 effected a 25 for 1 reverse stock split of both its common and preferred equity, along with an increase to its authorized capital of 100,000,000 shares of common stock and 10,000,000 preferred stock. The Company’s shareholders initially own an 80% equity interest and pursuant to certain milestones shall have released from escrow preferred stock increasing that ownership to 90% of the publicly traded company.

Pursuant to the SPA, the Company acquired all of the issued and outstanding shares of RWI in exchange for an initial 80% of the issued and outstanding shares of the Company at closing, with our shareholders having the ability to receive additional shares issued and placed in escrow (rights to acquire additional common shares upon conversion of the escrowed preferred shares) of the Company upon achieving certain performance objectives as set out in the SPA.

As part of the closing, the publicly traded company filed with the Nevada Secretary of State and FINRA (i) a 25-1 reverse stock split and (ii) a name change to “Regal Works Media, Inc.”

As consideration for the shares of common stock of the Company and its shareholders, the publicly traded company paid to our shareholders an aggregate purchase price consisting of 11,200,000 “restricted” shares of common stock, $.001 par value and 5,600,000 shares of preferred stock, convertible into 11,200,000 shares of common stock.

As part of the consideration paid by AmerElite to the shareholders of the Company a Series B class of preferred stock was established and 5,600,000 shares were authorized to be issued. Each share of Series B preferred stock is entitled to two votes per share (the “Escrowed Preferred Shares”) and may be converted into two shares of common stock. The Escrowed Preferred Shares are to be held until the following conditions have been met for as full payment of the shares.

(i) Based on the following provisions, the RWI shareholders shall have released certain Escrowed Preferred Shares as performance and valuation milestones are met. Set forth is structure and release of the Escrowed Preferred Shares under the agreement that qualifies as a tax-free exchange under the Code.

(ii) The publicly traded company achieves one or more of the following milestones within the first twelve (12) months from “closing,” the Company’s shareholders shall have released from Escrow one share of preferred stock (Escrowed Preferred Shares) for every four shares of common stock issued at Closing, or 2,800,000 shares, increasing the Company’s shareholder ownership in the publicly traded company from 11,200,000 shares of common stock to 16,800,000 shares of common stock.

· The aggregate market value of the publicly traded company’s common stock is greater than or equal to $20.0 million, computed using the voting and non-voting common and preferred equity held by both affiliates and non-affiliates (‘fully diluted”) for a period of 60 consecutive trading days, determined using the fully diluted shares of the post-reorganization publicly traded company’s shares multiplied by the closing stock price for each day or the use of the volume weighted average price (“VWAP”) if the aggregate market value falls below $20.0 million for a period of 5 days or less; or

· The publicly traded company’s share price is greater than or equal to 200% of the lower of $0.50 per share (based on a 25 for 1 reverse stock split) or the publicly traded company’s volume weighted average price for the initial 20 trading days post the ‘closing’ for a period of not less than 60 consecutive trading days; or

· The completion of a capital raise or financing of at least $5 million.

(iii) If publicly traded company achieves one or more of the following milestones within twelve (12) months from the “closing”, the Company’s shareholders shall have released from Escrow one share of preferred stock (Escrowed publicly traded company Preferred Shares) for every four shares of common stock (or the publicly traded company Escrowed Shares) issued at Closing, or 2,800,000 shares, thereby increasing Company’s shareholder fully diluted ownership from 16,800,000 shares of common stock to 22,400,000 shares of common stock (assuming the milestones referred to above in (ii) have been achieved).

· Aggregate market value of publicly traded company is greater than or equal to $30.0 million, computed using the voting and non-voting common and preferred equity held by both affiliates and non-affiliates (‘fully diluted”) for a period of 60 consecutive trading days, determined using the fully diluted shares of the publicly traded company multiplied by the closing stock price for each day or the use of the volume weighted average price if the aggregate market value falls below for a period of 5 days or less; or

· The publicly traded company’s share price is greater than or equal to 300% of the lower of $0.50 per share (based on a 25 for 1 reverse stock split) or publicly traded company’s volume weighted average price for the initial 20 trading days post ‘Closing’ or completion of the Transaction for a period of not less than 60 consecutive trading days; or

· The completion of a capital raise or financing of at least $10 million.

(iv) In the event the publicly traded company does not achieve any one of the following actions set to expire 180 days from the closing an adjustment shall be made by the publicly traded company to the number of shares held by the pre-reverse acquisition shareholder base as identified in paragraph (c) above - (x) the aforementioned 2,800,000 shares of common stock held by the pre-reverse acquisition shareholders collectively hold shares that have a market value that is greater than or equal to $1.4 million based upon a 20-day VWAP during that 180 days; or (xx) the post-closing publicly traded company completes a capital raise or financing of $1 million or more within 60 days from the closing date; or (xxx) the post-closing publicly traded company completes a capital raise or financing or completes an acquisition with a value more than $2 million. If neither (x), (xx) or (xxx) are achieved then the publicly traded company shall compensate the pre-RWMI publicly traded company shareholders the delta between $1.4 million and the market value as determined by the 20-day VWAP of publicly traded company’s common stock 180 days from the Closing Date.

Based upon the above the Company was in compliance nor had breached the minimum pricing guarantee for the pre-RWMI publicly traded company shareholders. However if the Company’s common stock price continues to hold around $0.25 per share the Company will be required to issue an additional 1,400,000 shares of common stock to the pre-RWMI publicly traded company shareholders.