22 Nov Bold Energy Inc (BOLD) – research report – now Lot78 Inc (LOTE)
Bold Energy Inc (BOLD) took a little bit longer path to a future paid promotion, but it followed all the most common steps along the way and is nearing the end of its journey, a journey which started as an online rewards company to a potential energy shell to a real clothing and accessories company (HHWW style).
BOLD used not one, but two of the top attorneys on our list - Thomas E Puzzo, and Luke C. Zouvas (long time partner of Luis Carrillo and Wade Huettel)
BOLD went public as an empty shell with no address and no business operations - just forward looking plans.
BOLD did a 150:1 forward split.
And recently BOLD began a major change of control.
BOLD started out as Global Club Inc - incorporated in Nevada on June 27, 2008. The entity had no address of its own (using the Resident Agent address instead) and had just one officer, Orlando Junhiti Narita, who had spent the previous 5 years in Brazil running a restaurant that he owned.
Mr. Narita owned all the outstanding shares at the time that Global Club Inc filed to go public - 4,750,000 shares.
Global Club Inc had no real business operations, just the plan to offer some kind of rewards program website. The domain for the site was going to be globalclubloyalty.com, but the site never got developed. The plan was obviously just to take the shell public using the forward looking statements then change control as a way of setting up seed shareholders/insiders for future enrichment.
The attorney helping to take shell public was Thomas E Puzzo. When you find foreign officers used by Thomas E Puzzo in S-1 filings the chances of the ticker becoming a future promo increases significantly. Other tickers that combined Thomas E Puzzo and an original foreign officer were RAYS, NSRS, and STNT among others.
The Seed Shareholders
The S-1 was approved on February 27, 2009. 150,000 shares were then sold to some anonymous seed shareholders for $.04/share ($6,000).
Change in Control #1
$6,000 cash doesn't last very long, and towards the end of 2009 all the cash was used up.
On November 10, 2009, Eden Clark bought control of the BOLD shell by purchasing all 4,750,000 shares from Orlando Narita for $9,500. That was an awfully cheap rate for 96% equity in a publicly traded shell. Eden Clark replaced Orlando Narita as the sole officer and director of the shell.
Eden Clark's career path digressed from being the founder of a successful NASDAQ company in 1997 (Onvia.com Inc) to being the founder of a fairly successful media company in 2002 (Be Jane, Inc) to being the president of a not so successful technology company starting in 2008 (eDivvy.com Inc).
The Forward Split
Eden Clark cancelled all but 151,000 of her shares after gaining control. That gave her 51% of the outstanding shares thus maintaining control of the shell.
On March 2, 2010, Ms. Clark disclosed the 150:1 forward split.
The 150:1 forward split gave Ms. Clark 22,650,000 shares which only cost her $9,500 ($.0004/share), but more importantly it gave the seed shareholders 22,500,000 free trading shares which only cost them $6,000 ($.00027/share).
On April 6, 2010, the company issued another 5,000,000 shares (now free trading) to more anonymous insiders for $.001/share ($5,000).
BOLD was now set up to give the insiders some major profits at some point in the future.
Re-arranging the Insider Enrichment shares
Apparently BOLD didn't have the free trading stock in the right hands so the shell did some insider enrichment musical chairs via a 1:25 reverse split followed by a fresh new issuance of 25,000,000 free trading shares to insiders.
On March 21, 2011, the name of the shell was changed to Bold Energy Inc and a 1:25 reverse split was effected.
The reverse split took Ms. Clark's ownership down to 906,000 and the ownership of the seed shareholders down to 900,000, but immediately following the reverse split new shares were issued to better arrange which insiders would get rich down the road.
Eden Clark issued herself 15,048,388 new shares for services rendered giving her 15,954,388 shares, and various anonymous insiders were issued 25,000,000 now free trading shares to pay off $25,000 of $30,000 owed in loans ($.001/share).
$20,000 of those loans came from Olive Limited and $10,000 of those loans came from Colorado Limited.
On February 17, 2010, the Company entered into a loan agreement with Colorado Limited in the amount of $10,000. The loan carries an annual interest rate of 5%.
On March 10, 2010, the Company entered into a loan agreement with Olive Limited in the amount of $20,000. The loan carries an annual interest rate of 5%.
Both Colorado Limited and Olive Limited appear to be UK companies. Colorado Limited was registered on March 4, 2008 and dissolved on October 19, 2010 after the loan arrangements were made. Olive Limited was registered in 2003 and is still active with Wayne Barnett, Gemini Shah, and Paul Bishopp listed as officers.
In April of 2012 another 15,000,000 shares were issued to the company's secretary, Patrick DeBlois, for services rendered.
The share count now sat at 57,053,138
Eden Clark - 15,954,388 shares
Patrick DeBlois - 15,000,000 shares
Anonymous UK debt holders - 25,000,000 free trading shares ($.001/share)
Seed shareholders - 900,000 free trading shares
Anonymous investors - 198,750 free trading shares
Recently BOLD has announced a bunch of new changes.
BOLD changed accountants to MaloneBailey LLP.
Patrick DeBlois resigned (indications are that he got to keep his 15,000,000 shares).
And BOLD announced the acquisition of Anio Ltd which does business as Lot78 Inc. in a Pre14A filing.
As part of the acquisition, the name of the shell will be changed from Bold Energy Inc to Lot78 Inc. and the head of Anio Ltd, Oliver Amhurst, will be eventually take over the BOLD shell - initially he'll just be added as a director until the acquisition and other corporate changes are complete.
Lot78 which was a private company before the acquisition had 11,510 shares outstanding. Those 11,510 shares will be exchanged for 30,954,388 newly issued shares of BOLD stock (the exact same number owned by Eden Clark and Patrick DeBlois combined). The 30,954,388 shares will be distributed as follows:
Ollie Amhurst - 18,018,482 shares
David Hardcastle - 9,964,032 shares
Emma Davis - 1,473,762 shares
Iceberg Investment Management Group Limited - 1,436,112 shares
Acting as the attorney for the exchange for the BOLD side was long time Carrillo Huettel associate, Luke Zouvas.
The acquisition and all corporate changes are set to close on December 17, 2012. Prior to the acquisition, BOLD had yet to make any progress with its forward looking business operations.
Following the acquisition, BOLD will have 88,007,526 shares outstanding.
More about Lot78 Inc
The Lot78 Inc website can be found here.
The business description is as follows:
Lot78 originated in London in 2008 and designs, markets, distributes, and sells apparel under the brand name "Lot78" to fashion-conscious consumers on six continents, including North America, Europe, Asia, Australia, Africa and South America. Lot78 seeks to be a trend-setting leader in the design, marketing, distribution and sale of luxury street apparel. Its current collection is a full men’s and women’s contemporary ready-to-wear line which includes leather jackets, t-shirts, sweats, knitwear, accessories, jeans, chinos, home ware, and wool coats. Lot78 operates in three distinct but integrated segments: Wholesale, Consumer Direct and Core Services. The Wholesale segment sells product to industry-leading high-end global department stores, specialty retailers and boutiques. The Consumer Direct segment consists of e-commerce sales and will be expanded as Lot78 opens branded retail stores. The Core Services segment provides product design, production, distribution, marketing and other overhead resources to the other segments. Over the past four years, Lot78 has developed a recognizable brand, expanded its product offerings, and initiated a growth strategy to expand both its Wholesale and Consumer Direct segment sales.
Lot78 can be found sold in the United States at around a half dozen Barneys locations as well as at least one Selfridges location in London. Lot78 apparel is also available worldwide via the internet.
The balance sheet for Lot78 Inc over the past year isn't particularly pretty with £960,969 in liabilities (including £335,000 in debt) versus only £154,363 in assets. Lot78 Inc did, however, £355,469 in sales, but that was down nearly 19% from the previous year and operating expenses resulted in a net loss for the year of £79,586 which is not terribly high.
The name change to Lot78 Inc and future symbol change are still a little ways off. It is interesting that all the previous insiders look like they will get to keep all of their shares. The debt arrangements with those two (probably UK entities) giving them 25,000,000 shares for just $25,000 in debt is the most fishy part.
With the involvement of people like Puzzo and Zouvas and the wheeling and dealing with the share count numbers to set up anonymous insiders with lots of cheap shares, all signs point to BOLD being a future promoted stock.
Lot78 Inc is a real business, but it isn't a particularly successful business and since the 25,000,000 super discounted debt shares went to some UK entities it appears that the Lot78 Inc insiders may be in on whatever future promotional plans are in the ground work for this shell.
Lot78 Inc wouldn't be the first clothing company to be the focus of a big paid promotion. Horiyoshi Worldwide (HHWW) was a McDonald Tuskey shell that turned into a successful promotion back in December of 2010 led by Capital Financial Media (CFM) - Eric Dickson and Brian Sodi. The stock went from under $.80/share to a peak of $3.25/share before crashing back down eventually ending up sub-penny and doing a reverse split to continue bilking investors with share dumping.
BOLD should be kept on watch for a possible future paid promotion.