Shell Summary for Feb. 10, 2017
2017-02-10 20:58 ET - Market Summary
by Stockwatch Business Reporter
The TSX Venture Exchange climbed 10.28 points to 836.16 Friday, ending the week up 16.88 points. Emprise Capital Corp.'s shell, Homeland Energy Group Ltd. (HEG), was the most active trader on the NEX today and the 10th most active on the TSX-V (including both TSX-V tiers and the NEX board). It closed unchanged at one cent on 3.3 million shares, after announcing a plan to roll back 1 for 75, which would leave it with 6,296,055 postconsolidated shares issued. The shell also plans to change its name to Sixonine Ventures Corp. It will hold a meeting on March 9 to seek shareholder approval for the rollback and the name change.
Homeland Energy used to be a coal miner in South Africa. It ended operations in 2012, sold its main assets in 2013, then sold the rest of its assets in 2014. In December, 2016, an Emprise Capital fund privately acquired 47.6 per cent of Homeland, or 225 million shares, at 0.0284 cent. The chief executive officer of Emprise, Scott Ackerman, then took over as the CEO of Homeland.
Emprise is a shell-repackaging operation in Vancouver. Typically, it picks up a significant percentage of cheap shares in a listed company that is no longer promotable, then it repackages this company as a saleable shell. It appoints a representative who will manage the shell, then it arranges a rollback, a financing and a deal. In the Shell Summary for May 24, 2016, we discussed Emprise's shell record, concluding that for seven completed shell deals, five turned out to be successes for the subscribers to Emprise-arranged private placements. Investors who bought shares in connection with the other two shell deals did not get sufficient opportunity to profit from their investment.
In May, 2016, Emprise closed its eighth shell deal. Its NEX shell, Quentin Ventures Ltd., launched a software developer, Identillect Technologies Corp. (ID: $0.10). Before becoming a shell, Quentin was an Internet promotion called Cinema Internet Networks Inc. In connection with the launch of Identillect, Emprise sold several private placements of Quentin shares at 20 cents. The subscribers to those private placements have had almost no opportunity to get out of their investment with a profit, so we consider this shell deal to have been a failure for them. Emprise's chairman, Jeff Durno, remains the chairman of Identillect.
In September, 2016, Emprise's NEX shell, Sky Ridge Resources Ltd., launched a gold junior, Japan Gold Corp. (JG: $0.355). Emprise had installed Mr. Durno as the president of Sky Ridge. In connection with the launch of Japan Gold, Sky Ridge sold a $300,000 private placement of shares at five cents and a $200,000 private placement of units at 12.5 cents. It also rolled back 1 for 2, so the adjusted break-even prices for the financing subscribers are 10 cents and 25 cents. Japan Gold traded up to 88 cents on its first day and has mostly been falling since then, but the subscribers to Sky Ridge's private placements are still up. For nine repackaged shells, Emprise Capital's record is now six successes, three failures.
Two weeks ago, Robert Allen's NEX-listed former Colombian gold explorer, Trident Gold Corp. (TTG: $0.02), announced a plan to roll back 1 for 6.5, which would leave it with 5,168,489 postconsolidated shares issued. Trident also plans to sell a $500,000 private placement of 10 million (postconsolidated) subscription receipts at five cents. It expects to sell eight million of these receipts to an Emprise fund, which would result in Emprise's becoming a 52.74-per-cent shareholder of Trident. The financing has not yet closed. Trident must first settle its debts, "on terms acceptable to the investors" (Emprise), and it must also agree to "certain changes to the company's management and board of directors."
Dale Styner's halted NEX shell, Top Strike Resources Corp. (TSR), has found a new medical cannabis deal to replace the one that it failed to close last year. The shell now plans to acquire an Israeli company called Phytopharma International Ltd. Top Strike, which has 16,431,428 shares issued, will issue a flood of 320 million shares to its target's shareholders.
Phytopharma is working on a method of producing cannabis-derived drugs that come not in the form of a pill or vapour, but in the form of honey. It calls its drug delivery platform CannaBeeZ. The idea is that a patient would eat one to three grams of cannabis-derived honey every day.
The CEO and controlling shareholder of Phytopharma, and presumably the chief recipient of the Top Strike paper deluge, is Zohar Ben Ner, an agronomic engineer in Israel. On closing of the acquisition, he will be the CEO and chairman of the resulting issuer. Mr. Ben Ner is the founder and chairman of the Agro Web Lab Group, which has developed an irrigation system called SupPlant. The system collects real-time data from sensors at a farm, then it uses the data to automatically change irrigation settings as needed. SupPlant also has a mobile app that farmers can use to view the data collected from their farms.
Joining Mr. Ben Ner on the board of the resulting issuer will be Oren Shuster, who co-owns a licensed Israeli cannabis producer called IMC Ltd. In 1999, Mr. Shuster co-founded the eWave Group, maker of the eWaveMD software program for health care organizations. The group has offices in Israel, New York and Sao Paulo. Mr. Shuster is also a technical director of Flawless Creations USA Inc., a cannabinoid research partnership between the University of California Davis and the Technion-Israel Institute of Technology.
Before the acquisition can close and Top Strike can issue its flood of paper, there is one small matter. Top Strike must sell a $10-million private placement of 80 million shares at 12.5 cents. The shell and its target expect to close the acquisition by April 30.
Mr. Styner is a securities lawyer and a chartered financial analyst in Calgary. He previously arranged for Top Strike to acquire two related companies: licensed Canadian cannabis grower United Greeneries Holdings Ltd. and Swiss cannabidiol pill manufacturer Satipharm AG. The shell did not say why this deal fell through, but United Greeneries and Satipharm eventually revealed that they had found a new shell to take them public: Anne Chopra's halted capital pool shell, Harvest One Capital Inc. (WON). The targets explained that they were drawn by Harvest One's connections to Potash One Inc., which in 2011 was acquired for $4.50 cash per share by K+S Canada Holdings Inc. Ms. Chopra, a lawyer, was Potash One's vice-president for corporate and legal affairs. As well, Potash One's promoter, Paul Matysek, was a founding director of Harvest One. He resigned from the shell in 2013. Currently, Harvest One is selling a $22-million private placement of subscription receipts at 75 cents. It expects to close this financing next week.
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