Continental Resources Group, Inc. company history: the story so far

History

Continental Resources Group raised about $18 million in early 2011 to build a uranium portfolio, sold substantially all its assets to Sagebrush Gold within months, and deregistered in 2013.

2010-2011: Raising money for uranium

Continental Resources Group began its record here with a financing. On December 29, 2010 it sold 4,000,000 units at $0.50 each, raising $2,000,000. Each unit was one share plus a five-year warrant (a right to buy another share) at $0.50. Earlier bridge notes of $50,000 plus interest converted into 100,833 more units.

The offering then grew through February and March 2011. A further 12,159,950 units were sold on February 18 for about $6.1 million, 7,990,000 on February 28 for about $4.0 million, and 11,689,980 on March 4 for about $5.8 million. Together the offering reached about $18 million. Placement agents took fees and warrants at each stage, and the company had to register the shares for resale, with cash penalties for delay. Shares on issue stood at 95,119,018 at the end of 2011, reflecting heavy dilution from these units.

The money was meant to fund a push into uranium and other projects. In February 2011 the company agreed to buy Arizona Breccia Pipes Project claims from Dr. Karen Wenrich, but only if a 2009 federal land withdrawal was lifted within five years. It also signed a non-binding memorandum of understanding with American Nuclear Resources LLC over seven uranium properties in Colorado and Utah. On March 17, 2011 it completed one deal, buying 75.67774% of Secure Energy LLC, which held North Dakota uranium leases and data, for $60,000 cash, about $80,000 of assumed obligations and 3,700,000 restricted shares.

2011-2013: Asset sale and withdrawal

The story turned in July 2011. On July 14 the company said its auditor had found that its December 2010 quarterly report overstated warrant and option expense, so the results would be restated. It was also late filing its annual report for the year ended March 31, 2011.

On July 22, 2011 the company sold substantially all its assets to a subsidiary of Sagebrush Gold Ltd. (now Pershing Gold Corporation) in return for 76,095,214 Pershing shares. Sagebrush took over the warrants issued in February 2011. Four investor funds then demanded that Sagebrush buy those warrants back, and one, AQR Offshore, sued for about $128,000 plus costs. On September 23, 2011 all parties signed a mutual release and the lawsuit was dismissed. Sagebrush and the company denied the allegation.

The record does not say what became of the uranium and Arizona interests after the sale, and it leaves open what the company was once its assets had gone. Share numbers did not change between the end of 2011 and the end of 2012. On March 5, 2013 the company deregistered its securities, ending its obligation to file reports with the SEC.

Written from the 10 story beats below (2011 to 5 Mar 2013), which come from the company's own announcements and filings.

Beat by beat

The events that changed the company's story, in plain English, each written against everything known about the company at the time. The dot shows whether it was good, bad or neutral for shareholders.

shares on issue market cap (log scale)

201395.1m shares · US$8.37bn market cap

5 Mar
Continental Resources Group, Inc. deregistered its securities, ending its obligation to file reports with the SEC.
listing compliance notice
95.1m shUS$8.37bn

201195.1m shares · US$5.32bn market cap

27 Sept
On September 23, 2011 the company, Sagebrush Gold and four investor funds signed a mutual release of all claims. The filing says that on July 22, 2011 the company sold substantially all its assets to a Sagebrush subsidiary, which assumed the warrants the funds bought in the February 28, 2011 offering; the funds demanded Sagebrush buy them back at Black Scholes value, and AQR Offshore sued for about $128,000 plus costs. The lawsuit was dismissed and the claims are released; Sagebrush and the company deny the allegation. This reveals the July 2011 asset sale, a major change not covered earlier, and ends the warrant dispute.
material agreement
95.1m shUS$5.32bn
15 July
On July 14, 2011 the company's auditor told management that the December 31, 2010 quarterly report overstated warrant and option expense, so those results cannot be relied on and will be restated. The company also said it was late filing its annual report for the year ended March 31, 2011. This is a negative sign about financial reporting quality; the filing does not give the size of the correction.
financial restatement
94.9m shUS$6.16bn
23 Mar
On March 17, 2011 the company bought 75.67774% of the membership interests in Secure Energy LLC, a North Dakota company holding uranium leases and an exploration data package, from Prospect Uranium Inc. and Gordon Haworth. It paid $60,000 cash, assumed about $80,000 of obligations, and issued 3,700,000 restricted shares (2,725,000 to Prospect, 975,000 to Haworth) under a 24-month lockup with limited quarterly sales. This is the Prospect Uranium North Dakota data acquisition mentioned in the March press release, now completed, and adds to the company's uranium holdings.
capital raising announcement
8 Mar
On March 4, 2011 the company sold another 11,689,980 units at $0.50 for $5,844,990, each a share plus a five-year $0.50 warrant, bringing the offering to about $18 million including the $12,225,391.50 from earlier closings (the company's press release says approximately $18 million). It paid placement fees of $584,500 plus warrants for 1,159,000 shares (a figure later corrected, see the May 2 amendment). It must file a resale registration statement within 60 days, with cash penalties of 1% a month up to 6% for delays. This completes the financing begun in December 2010 and adds further shares and warrants outstanding; the press release lists intended uses including the Coso, Blythe and Artillery Peak projects and the pending Arizona, American Nuclear Resources and Prospect Uranium deals, which remain subject to due diligence and definitive documents.
capital raising announcement
28 Feb
On February 28, 2011 the company sold another 7,990,000 units at $0.50 for $3,995,000, each with a share and a five-year $0.50 warrant. It paid placement fees of $399,514.60 plus warrants for 1,718,000 shares. The filing states earlier closings in this offering totalled 16,460,783 units for $8,230,391.50, so the offering now stands at about $12.2 million, with much more dilution from shares and warrants.
capital raising announcement
23 Feb
On February 15, 2011 the company and its subsidiary Green Energy Fields signed an agreement with Dr. Karen Wenrich to buy the Arizona Breccia Pipes Project mining claims, but only if a 2009 federal land withdrawal is lifted within five years and leaves more than 50% of the claims open. If it completes, the total price is $225,000 in cash (of which $25,000 was due at signing) plus $8,540 of fees already advanced, a 2.5% royalty and 250,000 warrants at $0.45, with at least $1.5 million of exploration spending over three years. There is no assurance the withdrawal will end.
material agreement
23 Feb
On February 22, 2011 the company signed a non-final memorandum of understanding with American Nuclear Resources LLC to acquire interests in seven uranium exploration properties in Colorado and Utah. The contemplated price is $400,000 cash, 4,000,000 restricted shares and two-year warrants for 4,000,000 shares at $0.50. It depends on definitive agreements and due diligence that has not started, and the MOU lapses after 30 days unless extended. This moves the company into uranium exploration.
material agreement
23 Feb
On February 18, 2011 the company sold a further 12,159,950 units at $0.50 for $6,079,975, each with a share and a five-year $0.50 warrant, continuing the financing begun in December 2010. It paid placement fees of $400,497.50 plus warrants for 2,431,990 shares. It must file a resale registration statement within 60 days, with cash penalties for delays.
capital raising announcement
5 Jan
On December 29, 2010 the company sold 4,000,000 units at $0.50 for $2,000,000, each unit being one share plus a five-year $0.50 warrant. Bridge notes of $50,000 plus interest converted into 100,833 more units. It paid placement fees of $200,000 plus warrants for 800,000 shares and must register the shares for resale. This is the larger financing that the earlier bridge notes were designed to convert into, and it adds to the shares and warrants outstanding.
capital raising announcement