FRONTIER ENERGY CORP. (ASX:FHE) company history: the story so far

History

A small technology shell turned to Alberta oil and gas prospects, paid for in new shares, and was later left tangled in unresolved deals and a 2008 debt-for-shares conversion.

2001-2005: From technology to minerals

In April 2001 the company, then called World Internetworks, sold its Internet business to Steven K. Hansen and Wiworks, Inc., who also took on about $125,000 of payables. That left it focused on data storage. In May it signed a non-binding letter of intent to merge with Trace Affex, Inc., a private optical data storage firm, hired Canaccord Capital as fiscal agent, and took an option to license the Starlite 3590 tape drive. The record does not show whether the merger or the licence went ahead, and it then goes quiet for almost four years.

In January 2005, as GTData, the company bought a 20-claim copper, gold and platinum prospect in central British Columbia, next to the Mount Polley mine, from Frontier Explorations Corp. It paid 9,858,434 new shares valued at $80,000.

2005-2006: Alberta oil and gas

Renamed Frontier Energy Corp., it agreed in October 2005 to take an 80% working interest in the Bindloss Project in southeastern Alberta from Angels Exploration Fund, paying with up to 5,100,000 restricted shares. Days later it signed a deal to earn a 90% interest in the Nisku Reef Project in north central Alberta. Both were exploration-stage, with no known reserves.

On April 5, 2006 it issued 50,000,000 shares to Sol-Terra Energy, Inc. for all of that company's assets, a large dilution. The auditor was to review their value, with excess shares cancelled if they were worth less. Sol-Terra's president, Fred DaSilva, became President and a director. The board also ended the contracts of two senior officers, cancelled a Regulation S share offering before any money was taken, and cancelled two consulting arrangements. The assets themselves were not described.

2008-2016: Debt conversion and catch-up

The record is quiet until December 2009, when the company reported that in December 2008 it had converted four creditors' debts into 128,544,000 shares at $0.00125 each, cutting liabilities by $160,680. The creditors resold the shares, but management said the buyers had not paid and it intended to support the creditors' claims. Richard Shykora was by then President and CEO.

In April 2016 the company, based in Edmonton, Alberta, engaged GBH CPAs to audit all outstanding periods. Shykora was President, COO and director. The Sol-Terra valuation, the Trace Affex merger and the status of the Bindloss and Nisku Reef projects remained unresolved, along with going-concern doubt.

Written from the 6 story beats below (2001 to 16 Dec 2009), 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.

2009

16 Dec
Effective December 8, 2008 (reported in December 2009), Frontier converted four creditors' debts into 128,544,000 new shares at $0.00125 each: Sam Aiello (40,000,000), Dyron Watford (20,800,000), Phillip Russel (22,800,000) and Mark Genesi (44,944,000). The company says this cuts liabilities by $160,680 in its 2008 financial statements, but it dilutes existing shareholders. The creditors resold the shares to investors who, per management, have not paid them; management believes some investors sold the stock without handing over proceeds and intends to support the creditors' claims. Dyron Watford was earlier named as a consultant whose arrangement was cancelled in 2006; the filing shows Richard Shykora as President/CEO.
capital raising announcement

2006

11 Apr
On April 5, 2006 Frontier issued 50,000,000 new common shares to Sol-Terra Energy, Inc. (an Alberta company) in exchange for all of Sol-Terra's assets, a large dilution for existing holders. The company's auditor will review the assets' value, and if they are worth less than the shares, the excess shares will be cancelled. Sol-Terra's president and controlling shareholder, Fred DaSilva, was made a director and President (salary $48,000 a year) in the same filing, so this is a deal with an insider. The board also terminated the contracts of COO Jeffery Cocks and Chief Exploration Officer Kevin Tattersall as part of a re-evaluation of management and overhead, cancelled a Regulation S offering before taking any subscriptions or funds, and cancelled consulting arrangements with Dwain Brannon and Dyron Watford. The Sol-Terra asset details are in an exhibit to be filed later, so the text does not say what the assets are.
asset acquisition disposition

2005

27 Oct
Frontier signed a farm-in agreement with 1097885 Alberta Ltd. on the Nisku Reef Project in north central Alberta, under which it can earn a 90% working interest in the 100% interest held by the other party, subject to a 15% gross overriding royalty. The filing states no purchase price or share consideration in the text provided, and the 90% interest is something it can earn, not yet held. It adds a second Alberta oil and gas prospect after Bindloss, and repeats the same risk factors, including that the properties are exploration-stage with no known reserves.
asset acquisition disposition
17 Oct
Now named Frontier Energy Corp. (formerly GT Data Corp.), the company closed a farm-in agreement with Angels Exploration Fund, Inc. on the Bindloss Project in southeastern Alberta, giving it an 80% working interest in Angels' 100% interest, subject to a 10% gross overriding royalty. It will pay with up to 5,100,000 restricted common shares, which would dilute existing holders. The filing says the properties are exploration-stage with no known reserves, and the text provided cuts off partway through the risk factors.
asset acquisition disposition
24 Jan
On January 22, 2005 GTData acquired a 100% interest in a 20-claim copper, gold and platinum prospect in central British Columbia, next to Imperial Metals' Mount Polley mine. It was bought from Frontier Explorations Corp. for 9,858,434 common shares valued at $80,000, a share issue that dilutes existing holders. This is the company's first mineral property in the filings so far, a departure from its earlier technology businesses.
asset acquisition disposition

2001

24 May
Effective April 30, 2001, World Internetworks sold all of its Internet business assets to Steven K. Hansen and Wiworks, Inc., who also took on about $125,000 of payables, leaving the company focused on data storage. It also signed a non-binding letter of intent (May 3, 2001) to merge with Trace Affex, Inc., a private San Jose optical data storage firm, subject to due diligence and shareholder approval. It hired Canaccord Capital as fiscal agent to help with that merger and a private placement (no terms set, no firm commitment), and took a licensing option from Mountain Engineering II for the Starlite 3590 tape drive, with an exclusive license only if it meets the funding requirements.
business combination