Each one in plain English, with the numbers worked through for a shareholder.
6 Dec 2011asset acquisition disposition● Neutral
This amends the July 2011 Continental asset purchase report to add Continental's audited March 31, 2011 financial statements and pro forma information; the deal terms are restated unchanged (76,055,214 shares, 8-for-10 exchange, liquidation by July 1, 2012, the $2,000,000 advance to an unnamed third party). The text still says the registration needed for Continental to distribute the shares could not be filed until Continental completed its audit and restatement, and the warrant and option numbers remain unquantified. The filing does show the audit has now been delivered (the exhibit includes an auditor's report), which is progress on the earlier open thread, but the registration itself is not reported as filed. Financial figures were cut off in the text provided.
Between Nov 21 and Dec 1, 2011 the company sold 3,675,000 units at $0.40 for $1,470,000 gross, a lower price than the $0.50 units of September and October (each unit: one share plus a half-share warrant at $0.60). The holder of a 6% note converted $611,750 of principal into 1,529,375 units, and placement agents received $87,400 cash and 37,500 shares. It also settled with Shannon Briggs, a holdover from the sports business, ending all claims: it paid $37,500, ended his lockup on 400,000 shares and assigned its rights to certain future boxing proceeds. Separately, a holder agreed to cancel 450,000 shares and a 600,000-share option. New shares are cheaper than before, which dilutes existing holders; the Briggs settlement closes a leftover dispute from the Empire business.
On Oct 26, 2011 the company sold another 80,000 units at $0.50 ($40,000). It decided the unit sales together count as a 'Qualified Financing' under the $1,715,604 Frost Gamma note, so on Oct 31 it agreed with Frost Gamma to prepay $700,000 of principal, with Frost Gamma waiving prepayment of the rest and any default from the partial payment. Also on Oct 31, the conversion price on $600,000 of 5% convertible notes from February 2011 was cut from $1.00 to $0.65; the press release says five holders, including Chairman Barry Honig, converted them, with 957,692 shares issued for the $600,000 plus $22,500 of interest. Debt falls, but share count rises.
The company raised money three ways. On Sept 14, 2011 it sold a $1,715,604 secured 9% note to Frost Gamma (convertible at $0.50), with proceeds used to post additional Bureau of Land Management bonds for exploration and Phase One drilling at Relief Canyon. On Sept 29 it sold 3,284,396 Series C Preferred shares and two-year warrants on 9,853,188 shares ($0.60) to Frost Gamma for $3,284,396. It also sold 3,356,000 units at $0.50 (one share plus a half-share warrant at $0.60), $850,000 on Sept 8 and $828,000 in October. As a result, the conversion price on the $8 million August 2011 notes dropped from $0.55 to $0.50 under their anti-dilution terms, which adds dilution; the filing also confirms the Continental warrant cancellations behind the earlier settlement.
On October 3, 2011 the company settled the warrant buy-back claims by issuing 5,350,000 shares to the holders of the Continental warrants, at 2 shares per $1.00 they invested in Continental's offering, in return for cancelling those warrants and waiving anti-dilution protection from future offerings. This is how the dispute in the September release was settled; the cost to existing shareholders is the added shares.
On September 23, 2011 the company and Continental Resources Group settled a dispute with four investors who held Continental warrants the company had assumed, with mutual releases of all claims. One investor had sued on August 24, 2011 for about $128,000 plus fees after the company refused to buy back the warrants at Black Scholes value; the suit was dismissed. The company and Continental denied the allegation, and the filing states no settlement payment, though a later filing shows shares were issued to warrant holders.
On September 1, 2011 the company exited sports and entertainment, selling its Empire Sports & Entertainment subsidiary to Concert International, Inc. for $500,000 payable March 31, 2012 under a promissory note, and said it will focus exclusively on gold exploration. This closes the original business acquired in the 2010 reverse merger. The filing itself warns that payment depends on collecting from Concert International and on the profitability of the August 2011 event.
30 Aug 2011asset acquisition disposition● NeutralMajor
On August 30, 2011 the company bought the Relief Canyon Mine in Pershing County, Nevada, a previously operating gold mine from the Firstgold bankruptcy sale, for $12,000,000 cash plus $8,000,000 of senior secured convertible notes issued to Platinum Long Term Growth and Lakewood Group. The notes carry 9% interest, convert at $0.55 per share with full-ratchet anti-dilution protection, are secured by the acquiring subsidiary's assets, and begin payments the earlier of 3 months after gold production or 18 months after issue. The mine carries a 2% net smelter royalty to Battle Mountain Gold Exploration and includes about $2.9 million of reclamation bond rights. This is the company's first mine with prior operating history and adds secured debt and possible dilution. The filing text was truncated, so further terms are not seen.
28 July 2011asset acquisition disposition● NeutralMajor
On July 22, 2011 the company bought substantially all of Continental Resources Group's assets, including mineral claims, three subsidiaries and about $13.2 million of cash, paying 8 company shares for every 10 Continental shares (76,055,214 shares issued, based on 95,069,018 Continental shares outstanding). It also assumed Continental's warrants and options on the same ratio, and Continental is to liquidate by July 1, 2012, passing the shares to its own holders. The $2,000,000 note from days earlier became an intercompany obligation. The company also advanced $2,000,000 to an unnamed third party for a possible mining asset purchase. The shares cannot be distributed until Continental completes its overdue audit (it missed its March 2011 year-end 10-K and must restate a quarter) and a registration statement is filed. This is a large issuance that dilutes existing shareholders.
On July 18, 2011 the company borrowed $2,000,000 from Continental Resources Group, Inc. on an unsecured 6% note maturing six months after issue. The filing gives no stated purpose; a later filing shows Continental was about to sell its assets to the company.
On May 31, 2011 J.H. Cohn LLP, the auditor hired in October 2010, resigned, and on June 1, 2011 the company engaged KBL, LLP for fiscal 2011. The filing says there were no disagreements and no reportable events, and Cohn's reports had no adverse opinion or qualification.
31 May 2011asset acquisition disposition● NeutralMajor
On May 24, 2011 the company (now filing as Sagebrush Gold Ltd., the renamed Empire Sports & Entertainment Holdings) bought 100% of Arttor Gold, LLC, which holds ten-year leases on the North Battle Mountain and Red Rock gold prospects in Lander County, Nevada, plus about $2,000,000 of cash. It paid with 4,000,000 common shares to its president David Rector and geologist Arthur Leger (each about a 9.5% owner of Arttor), 8,000,000 new Series B Preferred shares and 9,000,000 more common shares (7,000,000 to investor Frost Gamma Investment Trust); the filing says this adds 21,000,000 shares on a fully diluted basis. This is the first mining asset in the story, a move away from the sports and entertainment business, and it dilutes existing holders; the leases come from an affiliate of Leger, a related party.
On May 6, 2011 the company sold 410,000 restricted common shares at $0.60 each to accredited investors, raising $246,000. The form of subscription agreement describes a $500,000 offering, so this appears to be part or all of that target, and it adds a small amount of new shares.
1 Mar 2011capital raising announcement● NeutralMajor
On February 23, 2011 the company and its subsidiaries signed a credit facility of up to $4.5 million with co-chairman Barry Honig and Michael Brauser, at 6% interest and maturing January 31, 2012, to be used only to fund specific sports and entertainment events. The lenders and CEO Finkel also get 2,250,000 Series A Preferred shares convertible one-for-one into common stock, and a fee of 15% of the $4.5 million commitment payable only out of net profits from the events. Finkel agreed to cover one-third of any net event losses, and the preferred conversions are capped at 4.99% ownership (9.99% if waived). Shareholders face possible dilution from the preferred shares, and the loan is from a company insider.
On October 19, 2010 the company dismissed Gumbiner Savett, hired only two and a half months earlier, and engaged J.H. Cohn LLP as its auditor for 2010. The filing states there were no disagreements and no reportable events, and Gumbiner had issued no report on the company's financials.
12 Oct 2010asset acquisition disposition● NeutralMajor
On October 8, 2010 the company moved its old web-consulting business into a subsidiary, Excel Global Holdings, and agreed to sell that subsidiary to the former officers and directors (Betty Soumekh, Jeremy Vernassal and Delia Vernassal). In return they will hand back 17,596,603 company shares to be cancelled, leaving 22,115,800 shares outstanding, with former Empire holders owning about 88.8%. This finishes the shift to Empire's live-events business as the company's only business and concentrates ownership with the Empire holders.
On September 29, 2010 the company bought The Empire Sports & Entertainment, Co., a private live music and sports events promoter, in a share exchange, issuing 19,602,000 shares to Empire's holders, who held about 49.4% of the 39,712,403 shares outstanding afterwards. It was renamed The Empire Sports & Entertainment Holdings Co., the old web-consulting business was replaced as its line of business, the old directors resigned, and Shelly Finkel (Chairman and CEO), Barry Honig and Gregory Cohen took over. The company also granted 2,800,000 options at $0.60 per share, and the filing says Empire had not yet generated material revenues.
