International Gold Resources, Inc. company history: the story so far

History

A reverse-merger gold explorer in Brazil raised fresh cash in 2007, then disclosed possible fraud, lost its auditor, filed no accounts after January 2007, and deregistered in 2010.

2005-2007: Merger and fundraising

In August 2005 Montpellier Group, Inc., a Delaware company, merged with International Gold Resources, Inc., a Nevada corporation. Montpellier survived and took the IGR name. IGR shareholders received the same number of new shares as they held before. The company held interests in Brazil's State of Amapa, including the Cupixi claim block and rights to tailings (leftover material from past mining) held through a cooperative called COOGAL.

The record is quiet until 2007, when the company raised money several times. In April it sold 4,300,000 shares at $0.25 for $1,075,000, and CEO Tim Acton exercised 500,000 warrants for $125,000. Convertible debentures of $416,850 turned into 833,700 shares. A December 2006 loan of up to $1,150,000, meant to start production, was repaid because the company decided not to go ahead with production in the near term. Interest of $162,280 was paid in 649,118 shares. On October 2 it sold 10,000,000 shares at $0.25, raising $2,500,000. Each issue left existing holders with a smaller slice.

2007-2010: Fraud disclosure and silence

On October 26, 2007 the company said earlier financial statements could no longer be relied on. A review under Acton found possible fraud before his appointment. The 2004-05 Uniworld acquisition, paid for with $2,000,000 of preferred stock, was never transferred to the company. The company was in default on its COOGAL agreement because $1,000,000 of bonus payments allegedly never reached COOGAL, though a new agreement was signed. Title to equipment bought for Brazil was also in question. Losses were not quantified, a forensic audit was planned, and statements since the 2005 merger were likely to be restated. The company said Cupixi was unaffected.

Money still came in. On November 20, 2007 it closed a placement of 1,083,334 shares at $0.60 ($650,000) and another of 4,500,000 warrants at $0.60 ($2,700,000). The second fully vests only if authorised stock is raised to 200,000,000 shares.

On November 17, 2008 the company reported that its auditor, MacKay LLP, had declined re-election from October 31, 2008. No replacement had been hired, and no financial statements had been filed since the quarter ended January 31, 2007. In October 2010 the company deregistered its securities, ending its obligation to file reports with the SEC.

Written from the 7 story beats below (2005 to 18 Oct 2010), 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.

2010

18 Oct
International Gold Resources, Inc. deregistered its securities, ending its obligation to file reports with the SEC.
listing compliance notice

2008

17 Nov
MacKay LLP declined to stand for re-election effective October 31, 2008, and no replacement auditor had been hired as of November 17, 2008. The filing says the company has filed no financial statements since the quarter ended January 31, 2007, and that MacKay's earlier reports carried a scope limitation on $710,000 of expenditures lacking documentation. It states no disagreements. This continues the unresolved restatement and filing gap from the 2007 fraud disclosure.
auditor change

2007

26 Nov
On November 20, 2007 the company closed two private placements: 1,083,334 shares at $0.60 ($650,000) with one-year $1.50 warrants, and 4,500,000 warrants at $0.60 ($2,700,000), each exercisable into a share plus a $1.50 one-year warrant. The second placement fully vests only when authorised common stock is raised to 200,000,000 shares. Also issued: 500,000 warrants to Armada Capital for consulting and 1,000,000 warrants to Rodolfo Michels. Adds fresh cash after the fraud disclosure, with further dilution.
capital raising announcement
26 Oct
The company says earlier financial statements can no longer be relied on. A review under CEO Tim Acton found possible fraud predating his appointment: the 2004-05 Uniworld acquisition (for which $2,000,000 of preferred stock was issued) was never actually transferred to the company; the company is in default under its COOGAL tailings agreement because $1,000,000 in pre-production bonus payments allegedly never reached COOGAL (a new agreement has been signed); and title to equipment bought for Brazil is in question. Losses are not yet quantified, a forensic audit is planned, and statements since the August 2005 reverse merger will likely be restated. The company says the Cupixi claim block is not affected.
financial restatement
4 Oct
On October 2, 2007 the company sold 10,000,000 unregistered shares at $0.25 each, raising $2,500,000 from accredited investors. New cash for the company, but more shares outstanding for existing holders.
capital raising announcement
5 July
A catch-up list of unregistered share and warrant issuances in 2007. The main items: $1,075,000 raised from 4,300,000 shares at $0.25 (April 30); $125,000 received when CEO Tim Acton exercised 500,000 warrants at $0.25; $416,850 of 24% convertible debentures converted into 833,700 shares; and many warrants issued to executives, a director and consultants. A December 2006 loan of up to $1,150,000 intended to start production was repaid, with interest of $162,280 paid in 649,118 shares, because the company decided not to go ahead with production in the near term. These issuances dilute existing holders.
capital raising announcement

2005

19 Aug
Montpellier Group, Inc. (a Delaware company) agreed on August 19, 2005 to merge with International Gold Resources, Inc. (a Nevada corporation), with Montpellier surviving. Each IGR shareholder gets the same number of Montpellier shares, issued with a restrictive legend; IGR's old shares are cancelled. Financial statements of the business acquired were promised in a later amendment.
business combination