SCHEDULE 13D: Insider and Entity Acquire Over 83% Stake in Token Communities Ltd. via Asset Purchase

David Champ and American Software Capital Inc. have disclosed the acquisition of 83.3% of Token Communities Ltd.'s common stock, obtained through an asset purchase agreement for investment purposes.

Summary

• David Champ and American Software Capital Inc. (the "Reporting Persons") have acquired 1,745,000,585 shares of common stock in Token Communities Ltd.
• This acquisition represents 83.3% of the Issuer's total issued and outstanding common stock, based on 2,095,406,000 shares outstanding as of July 29, 2020.
• The shares were acquired by American Software Capital Inc. in connection with the closing of transactions detailed in an Asset Purchase Agreement between American Software Capital Inc. and Token Communities Ltd.
• The Reporting Persons state that the securities were acquired for investment purposes only and they have no present plans or proposals for actions such as mergers, asset sales, or changes in the Issuer's business or corporate structure, though they may reconsider their position at any time.
• David Champ serves as President of American Software Capital Inc. and is also a member of the Board of Directors and President of Token Communities Ltd.

Sentiment

Score: 6

Explanation: The filing indicates a significant, controlling stake acquired by an insider for investment purposes, which can be seen positively for long-term commitment. However, the high concentration of ownership and the potential for future changes in plans introduce some uncertainty for minority shareholders.

Positives

• A significant ownership stake (83.3%) by an insider (David Champ) and a related entity (American Software Capital Inc.) could signal strong confidence in the company's future.
• The stated purpose of the acquisition is for "investment purposes only," suggesting a long-term holding strategy rather than immediate disruptive changes.

Negatives

• The extremely high concentration of ownership (83.3%) by a single individual and related entity could inherently lead to reduced public float and liquidity for other shareholders.

Risks

• The Reporting Persons, while currently holding shares for investment purposes, explicitly state they may "review or reconsider their positions" and "formulate plans or proposals" regarding the Issuer at any time, which could lead to future strategic changes not currently disclosed.

Future Outlook

The Reporting Persons acquired the shares for investment purposes only and currently have no plans for significant corporate actions such as mergers, liquidations, or changes to the Issuer's business. However, they explicitly state they may review or reconsider their positions and formulate new plans or proposals at any time.

Management Comments

• "All of the Issuer's securities owned by the Reporting Persons have been acquired for investment purposes only."
• "Except as set forth herein, the Reporting Persons have no present plans or proposals that relate to or would result in any of the actions required to be described in subsections (a) through (j) of Item 4 of Schedule 13D."
• "The Reporting Persons may, at any time, review or reconsider their positions with respect to the Issuer and formulate plans or proposals with respect to any of such matters, but except as described herein, they have no present intention of doing so."

Industry Context

This Schedule 13D filing primarily concerns a change in beneficial ownership and does not provide specific industry context or trends.

Legal Proceedings

• During the last five years, the Reporting Persons have not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
• During the last five years, the Reporting Persons have not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws.

Related Party Transactions

• American Software Capital Inc. acquired 1,745,000,585 shares of Common Stock from Token Communities Ltd. in connection with an Asset Purchase Agreement.
• David Champ is the President of American Software Capital Inc. and also a member of the Board of Directors and President of Token Communities Ltd., indicating a related party transaction.

Stakeholder Impact

• Shareholders: The acquisition results in a highly concentrated ownership structure, with 83.3% of shares held by the Reporting Persons, potentially limiting the influence and liquidity for other shareholders.
• Management/Employees: David Champ, already President of the Issuer, now controls a dominant stake, potentially solidifying existing management's control.

Key Dates

Keywords

TOKEN COMMUNITIES LTD., American Software Capital Inc., David Champ, Schedule 13D, SEC filing, common stock, beneficial ownership, asset purchase agreement, investment purposes, corporate governance, insider ownership