Each one in plain English, with the numbers worked through for a shareholder.
8 May 2019bankruptcy or receivership● NeutralMajor
The bankruptcy court dismissed the Chapter 11 case on March 5, 2019, so the company continues as a going concern under new management: Allan Holms became CEO, President and Chairman and William Wood became CFO, and offices moved from Helena to Spokane, WA. A March 27, 2019 Nevada judgment ruled Allan Holms the rightful owner of the 26,235,000 shares formerly held by Val Holms and lifted the restraining order, ending that ownership dispute (claims against former directors remain pending). The company says bankruptcy-related legal costs of about $1.5 million consumed most of its prior cash, that its last SEC financial filing covered September 2017, and that it is reviewing what reporting to resume.
On December 7, 2018 the company filed for Chapter 11 bankruptcy in Nevada and keeps operating as debtor-in-possession. Its auditor DMT resigned December 6, restructuring officers David Hindman and Richard Robbins (firm APS Services, $150,000 retainer) were appointed, and employee Karen Midtlyng's employment ended December 3 though she stays as a director and secretary. The company warns shareholders may receive little or nothing and that their shares may be cancelled, but no plan has been confirmed yet.
On July 27, 2018 the Audit Committee, after its investigation of Eagle's allegations, concluded that six quarterly reports (March 2016 to September 2017, excluding the quarters of December and the 2016 year-end) can no longer be relied on because of misstatements about $250,000 described as held in escrow for a contemplated Eagle transaction. It also found that the transaction in the January 9, 2018 8-K did not occur. The 2016 annual report was not affected. This resolves the investigation opened in April 2018, though the Eagle rescission demand is not stated as settled.
9 May 2018asset acquisition disposition▲ GoodMajor
On May 4, 2018 the company bought an overriding royalty interest in what is currently 25 oil and gas wells in the Niobrara-DJ Basin (Colorado/Wyoming) for $1 million, effective January 1, 2018, again through EnergyNet. About $220,000 is held in escrow for royalties accrued since the effective date. This continues the EnergyNet buying program started in December 2017 and is much larger than those purchases.
On April 2, 2018 Eagle Private Equity, the company's lender and Series A preferred holder, told the company it believed it had been misled in the transactions described in an 8-K filed January 9, 2018 (not in the provided history), and that it now seeks to rescind them. The company disputes any misrepresentation, and its Audit Committee is investigating. This is a new dispute with Eagle, which had been a rescuer in the 2016 control fight.
Between December 5 and 14, 2017, the company completed nine purchases of royalty interests in the Eagle Ford basin (Texas) and Haynesville basin (Louisiana) for a combined $320,410, bought through the EnergyNet.com online mineral-rights auction site. These are new assets in different regions from its earlier Bakken, Montana, Idaho and Texas holdings; the filing says buyers on EnergyNet generally take on title risk. The attached exhibits are the standard EnergyNet auction forms and a press release (whose text is not in the provided filing).
26 July 2016capital raising announcement▼ BadMajor
On July 20, 2016 a group led by Allan Holms (half-brother of Val Holms, now described as the former CEO) tried to take over the company's Helena offices using a stockholder consent signed by 24 holders, including Val Holms (26,235,000 shares). The company obtained temporary restraining orders in Montana and Nevada, with hearings set for Aug 1 and Sept 21, 2016. The takeover triggered Eagle Private Equity's rights under its May 2016 loan, and Eagle put and converted $600,000 of loans into 600,000 Series A Preferred shares carrying votes equal to 60 million common shares. That is a large new voting block, which dilutes the voting power of existing common holders; the outcome of the control dispute is unresolved.
On April 20, 2016 the audit committee engaged DeCoria, Maichel & Teague, P.S. as new auditor, which effectively dismissed MaloneBailey (auditor since 2010). The filing reports no disagreements and no adverse or qualified opinions from MaloneBailey, and says the engagement is subject to the new firm's client acceptance procedures.
On July 1, 2015 the board ratified restating the audited 2013 annual report, so statements in the original 10-K on the matters covered should no longer be relied on. This follows the Dec 2014 10-Q/A and the independent investigation begun after the audit committee chairman resigned from the board (March 2015 filing). The company says it is not aware of any material impact of the investigation on the original 10-K, and the auditor will withhold audit sign-off until it reviews the investigator's report.
On July 9, 2014 the company signed a two-year oil and gas lease with Big Willow Properties, LLLP for about 9,300 net mineral acres in Payette, Ada and Canyon Counties, Idaho. Per-acre terms and royalties are undisclosed and depend on title confirmation. Drilling must start and a seismic survey be completed within the initial term, and Big Willow can take up to a 15% working interest in each well. This is a new area beyond North Dakota and Montana.
10 Feb 2014asset acquisition disposition▲ GoodMajor
On Feb 4, 2014 the company sold 767 net mineral acres in McKenzie County, ND (part of the Holms Property assets bought in Nov 2010 for $1,535,000) to Athene Annuity & Life Assurance Company for $7,871,248 ($10,250 per acre). It keeps a 2% royalty on the sold assets, and 10% of proceeds is held in escrow pending title review. The press release says about 1,600 net mineral acres remain.
On July 3, 2012 the company bought a 17% working interest in the 3A oil well in Archer County, Texas for $68,000, payable half at closing and half after 90 days. The seller and operator, Holms Energy Development Corp., is controlled by CEO Val Holms, so this is a related-party deal; the filing says a majority of independent, non-interested directors approved it. The press release also says 21 wells are in various stages on its North Dakota acreage, 13 producing, and that it has received payments from eight Bakken wells and three Madison wells.
On Sept 21, 2011 the company paid $250,000 at closing to buy oil and gas mineral rights from John L. Reely and Lincoln Green, Inc. in Glacier County, Montana. The press release says about 1,100 acres near Duck Lake in what it calls the 'Alberta Bakken', adding to its North Dakota holdings; production potential is management's belief, not shown.
On June 24, 2011 the company closed a further $30,000 of convertible notes, and the filing says the $300,000 offering is now fully subscribed. Terms are unchanged from the May 25 filing; the notes still convert only if a $2,000,000+ equity round happens by Dec 31, 2011, otherwise they become due.
On June 14, 2011 the company closed another $40,000 of the same 6% convertible notes and warrants, on the terms in the May 25 filing. This brings the total sold to $270,000 of the up-to-$300,000 offering (the filing refers to $230,000 earlier).
On May 20, 2011 the company closed $230,000 of 6% convertible notes (with warrants), part of an offering of up to $300,000. The notes convert at a 25% discount if the company raises at least $2,000,000 in equity by Dec 31, 2011; otherwise they fall due with accrued interest. This is new debt that could dilute shareholders if converted.
On March 18, 2011 the company closed a private placement of 2,780,000 shares at $0.25 for gross proceeds of $695,000, with warrants for 1,390,000 shares at $0.50 for three years. A $65,500 finder's fee went to Peter Swan Investment-Consulting, LTD, and the rest will fund operations. Southwest Consulting Services Ltd. put in $250,000, the largest single amount.
On February 4, 2011 Bakken Resources (name now changed) sold 200,000 shares at $0.25 ($50,000) with 100,000 three-year warrants at $0.50 to three investors, including director David E. Boleneus ($10,000). The money funds company operations. The filing is signed by Val M. Holms as President and CEO.
What it means for a shareholder
200,000 new shares at $0.250 to raise about $50,000. That's 0.374% dilution: every existing holder's slice gets 0.374% smaller. If you held $1,000 of shares (4,000 at the issue price), your slice goes from 0.0075% to 0.00747% of the company. To keep it you'd need 15 more shares - about $4 at the issue price.
On November 26, 2010 the company exercised the Holms option: it paid $100,000, issued 40,000,000 restricted shares and granted a 5% overriding royalty for ten years on the Holms Property (about 6,000 gross acres, McKenzie County, North Dakota). Holms' members now hold a controlling interest, so existing shareholders are diluted. It also issued 6,180,000 shares at $0.25 for gross proceeds of $1,545,000. The company's address moved to Helena, Montana. The filing's table of contents also lists director/officer changes and a change in shell company status, but that part of the text is truncated here.
The company took $525,000 in 30-day non-interest-bearing loans (due December 11, 2010), convertible into the private offering, and used part to lend $485,000 to Holms Energy to fund the Greenfield mineral-rights option. Shareholders holding 81.4% of the 6,157,500 shares voted for all four proposals, including the 40,000,000-share issuance to Holms, the option plan increase and the name change to Bakken Resources. The private offering and the Holms option deadline were extended to November 30, 2010. This moves the Holms deal forward.
This amendment corrects the name of one investor in the November 1, 2010 placement, now given as Richard Townsend ($10,000) instead of Gary Kearney. All other terms are unchanged.
On November 1, 2010 the company sold 140,000 shares at $0.25 ($35,000) with 70,000 three-year warrants at $0.50 to two investors, again using the money to pay accounts payable. This is a small raise separate from the larger private placement tied to the Holms deal.
What it means for a shareholder
140,000 new shares at $0.250 to raise about $35,000. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
The company's subsidiary, Multisys Acquisition, obtained an option (agreement dated June 21, 2010, extended to November 15, 2010) to buy oil and gas royalty rights on about 6,000 gross acres in McKenzie County, North Dakota (Bakken Formation) from Holms Energy, LLC. Exercise requires $100,000, 40,000,000 new shares and a 5% overriding royalty for ten years. Holms' members would end up with about 71% of the company, heavily diluting the existing holders of 6,157,500 shares, and the name would change to Bakken Resources, Inc. The option depends on raising at least $1,500,000 in a private placement and raising the stock option plan from 1,000,000 to 5,000,000 shares.
On June 9, 2010 the company dismissed its auditor Li & Company, PC and hired MaloneBailey, LLP. The filing states there were no disagreements, and Li & Company's prior reports carried only a going-concern explanatory paragraph.
On May 28, 2010 CEO Janelle Edington lent the company a further $15,000 on a 180-day note at 6% interest, maturing November 23, 2010. This adds to her earlier $6,500 loan from November 2009.
The company sold 200,000 shares at $0.05 per share ($10,000) to a single accredited investor, Southwest Consulting Services, LTD, with no fees. The filing says the money was used up paying outstanding accounts payable. The agreement is dated as November 9, 2009 in the text, while the exhibit is dated April 16, 2010.
On November 9, 2009 the company (then named Multisys Language Solutions, Inc., the earlier name of what became Bakken Resources) borrowed $6,500 from its President/CEO Janelle Edington on a 180-day promissory note at 6% interest, maturing May 8, 2010. This is a small loan from an insider.
