07 Dec Dominovas Energy Corp (DNRG) – stock research report
Dominovas Energy Corp (DNRG) caught my attention this weekend. A closer look at DNRG revealed some interesting details that has led me to consider DNRG a ticker to keep an eye on in the future for possible paid promotion activity. In the past DNRG would not have been a ticker that would have even warranted a second glance, but because of the recent trend of tickers with long histories being used for paid promotions like ALKM and ECRY and others, the game has changed. That means we have to start adjusting the way we hunt for future paid promotion tickers.
It used to be easy to find tickers being set up for future good paid promotions. They were usually fresh ticker recently taken public as part of some shell factory scheme with an obvious set-up for a future paid promotion that involved the seed shareholders and a large forward split. Now with so few good paid promotions and many of the shell factory promoters out of business, the pre-promotion research business has changed.
Why DNRG should be considered a potential future paid promotion ticker
I'm going to skip the part about why DNRG got my attention in the first place. Instead I'm going to just jump right into what particular filing/corporate event locked me in to the ticker.
This S-1 filing from July 28, 2014 is what locked me into the ticker and sparked this research report.
The S-1 filing used Frederick C Bauman as the attorney providing the legal opinion. Frederick C Bauman also did legal opinions for Pingify International Inc (PGFY) as well as some other fresh tickers that have yet to get paid promotions.
The S-1 was to register 21,944,635 shares previously owned by around 104 different investors for resale in a private transaction. According to the S-1 filing the shares will be offered at a privately negotiated rate. Basically the door is left open for one individual or organization to acquire all 21,944,635 shares at pretty much any price. It is very possible that one individual or organization could end up with all of those shares for very cheap then split up those shares in foreign accounts to avoid having to report their share ownership. That individual or organization could be a stock promoter or somebody that often hires a stock promoter to facilitate the dumping of their shares into the market.
Some brief history for DNRG
DNRY went public as Comtrix Inc (CMRX) way back in 2005. After going public it would do a 25:1 forward split and name change to Lusora Healthcare Systems Inc (LHCS). LHCS would get some paid awareness in 2007 including from Quality Stocks (Michael McCarthy) and Red Chip (Joe Blankenship). In September of 2007 LHCS ended up doing another 1.5:1 forward split to go with a name/symbol change to Western Standard Energy Corp (WSEG) which was followed by more paid awareness by the Red Chip companies.
By 2010 the ticker had been played out and a 1:1000 reverse split was done bringing the outstanding share count down to 192,136 shares and resetting the ticker for future use.
After the reverse split everything started over for the ticker.
The first big even happened in October of 2012. WSEG sold 2,500,000 shares to BRL Consulting Inc (Gladys Jenks) for $3,125 giving them control of the shell. Later filings would reveal that the 2,500,000 shares were issued to pay off $3,125 in past debt owed to BRL Consulting Inc. The company also issued BRL Consulting Inc/Gladys Jenks a new $250,000 debt Note convertible into 50% of the outstanding share count at the time of conversion. That means no matter what the outstanding share count is for WSEG, BRL Consulting Inc/Gladys Jenks would get a number of shares upon conversion equal to 50% of the outstanding share count assuring them of keeping voting control of the ticker no matter what. WSEG had previously had a CEO by the name of Peter Jenks who may be related to Gladys Jenks. Peter Jenks took over as the CEO of WSEG in December of 2009. A few days later, WSEG signed its first loan agreement with BRL Consulting Inc. So in reality BRL Consulting Inc has had control of the DNRG shell since 2009 well before the reverse split and fresh start for the ticker took place.
I could only find Gladys Jenks involved with one other publicly traded company, Enertopia Corp (ENRT) as a 5% shareholder back in 2011. She is from British Columbia, Canada. There was also some weird reference to [email protected] in the WSEG filing for the BRL Consulting Inc share distribution. That email belongs to Brent Lokash. BRL could be the initials for Brent Lokash. Brent Lokash who has a law degree has been an officer/director of several TBX listed companies including Clearly Canadian Beverage Corp, Strata Minerals Inc, Jemi Fibre Corp, and Avanti Energy Inc. Lokash has a link to Mike Jenks (possibly related to Gladys Jenks) through Jime Holdings and is very closely tied to Bobby Genovese through Clearly Canadian Beverage Corp, Strata Minerals Inc, and Jemi Fibre Corp. Lokash also worked with Genovese on the Adventure Capitalist production. Bobby Genovese who now resides in the Bahamas and splits time between the Bahamas and Florida has a very colorful history with penny stocks and paid promotions but we won't go into that in this report. For more information about that please read our old USTU report.
With the change of control came a change of CEO. Dallas Gray (aka Walter Dallas James Gray) the general manager for a radio show in British Columbia took over as the new CEO. I was unable to determine if Dallas Gray was related at all to Jason Gray, the CEO of Pingify International (PGFY). Jason Gray is also from British Columbia, but that was the only real link I could find between the two.
At this time Clark Wilson LLP was the legal counsel for WSEG. Clark Wilson LLP has done legal work for dozens of paid promotion tickers including WTER, TFER, and BGBR.
WSEG would do a private placement right after the change of control selling 33,269,857 shares at the super low price of just $.00125/share for proceeds of $41,587.32.
15,000,000 of those shares went to Dallas Gray. The other 18,269,857 shares were split up between 17 other investors. 16 of those investors would remain unnamed in the WSEG filings, but one of them would end up being named. 100,000 of those shares were issued to Monaco Capital Inc which used a Belize address linked to Robert Bandfield and Andrew Godfrey at 7 New Road, Belize City, Belize. Bandfield and Godfrey were busted earlier this year for a money laundering scheme that involved several paid promotion tickers including ENIP, CANA, TGRO, NHUR, NGRC, KRED, WTER, and PGFY. Monaco Capital Inc shows up in a filing for American Paramount Gold Corp (APGA) from May of 2010. The signatory for Monaco Capital Inc in that filing is Robert Bandfield. Voting control of those APGA shares held by Monaco Capital Inc were said to belong to a "K. Kaffa", but with such a vague name (assuming it is even real) I was unable to track this person down. "K Kaffa" acquired those shares in February of 2010 from Karl Kottmeier, the original CEO of APGA when it went public. Erwin Speckert was another major shareholder in APGA through his company Ostras Group Ltd the same time as Monaco Capital Inc. Erwin Speckert who is from British Columbia was busted by the regulators in 2013 for his role in helping launder money through foreign bank accounts for stock promoters and financiers. APGA had one insider the same as DNRG - Peter Jenks. The same Peter Jenks mentioned above that took over as the CEO of the DNRG shell in December of 2009 the same time that BRL Consulting Inc first got involved. Peter Jenks was a director for APGA at the same time Monaco Capital Inc was involved there. APGA got a newsletter/email promotion in June of 2010. The CEO for APGA at this time was Wayne Parsons who was a broker for RBC Dominion Capital and later become the CEO of Yappn Corp (YPPN) which also got a paid promotion.
WSEG remained pretty quiet until December of 2013 when it entered into two separate share exchange agreements both involving Pro Eco Energy Ltd. WSEG signed an agreement with C.A.B Financial Services Ltd. (Chris Bunka) to acquire his 41% ownership of Pro Eco Energy Ltd in exchange for 4,000,000 shares of WSEG stock. The transaction also involved 2,000,000 shares being issued to some anonymous foreign entity. WSEG also signed an agreement with Enertopia Corp (ENRT) to acquire their 8.25% ownership of Pro Eco Energy Ltd in exchange for $40,000 cash. What is interesting is that we already determined that Gladys Jenks was a pretty big shareholder in ENRT so the business transaction with ENRT isn't all that surprising. Chris Bunka was also a director for ENRT. At the same time of the acquisitions, WSEG also issued 2,000,000 shares to Dallas Gray, 250,000 shares to Darren Jaclin (new director for the company), and 2,000,000 shares to two unnamed consultants for their roles in helping put together the transactions.
Pro Eco Energy Ltd. is the combination of two private related companies - Swiss Solar Tech (SST) Ltd. and Pro Eco Energy Ltd both located in British Columbia. The company provides energy efficient and environmentally friendly heating and cooling HVAC systems for commercial buildings.
It was around this time that Frederick Bauman took over as the legal counsel for the ticker.
Merger/Name and Symbol Change
On February 20, 2014, WSEG would enter into a Equity Purchase Agreement with Dominovas Energy LLC. In exchange for 45,000,000 shares of WSEG stock, Western Standard Energy Corp acquired Dominovas Energy LLC.
Dallas Gray cancelled all but 2,250,000 of his shares and for the time being remained on as a director. He would later resign on November 6, 2014.
Neal Allen took over as the new CEO. Other new officers included Spero Plavoukos and Michael Watkins.
Dominovas was founded in 2012 and is part of the fuel cell and sustainable/alternative energy industry. Dominovas Energy believes that it has identified a marketing opportunity for fuel cells in emerging markets, where electricity supply is frequently unreliable and expensive compared to the United States. Dominovas Energy currently has active projects in the Caribbean, South America, Asia – Pacific and Africa. In each case, Dominovas Energy is working with a local partner, as well as the host nation government. Initial project sizes range from 1.5 to 10 Megawatts (MW), with eventual project size of 200 to 395 MW per project. Project cost projections range from $7.5 million to $50 million. Dominovas Energy plans to provide power to the local utilities under power purchase agreements (PPA’s), and it intends to require bonding or other credit support where the local utilities do not enjoy strong credit ratings.
The Dominovas Energy fuel cell system, called RUBICON, is a modular solid oxide fuel cell (SOFC) system that operates at high temperatures (up to 1,000 C). Dominovas Energy believes that this technology has the following advantages: (1) all solid components, (2) accelerated electrochemical kinetics proceed without the need for expensive noble metals such as platinum, (3) internal fuel reforming is possible and carbon monoxide may be used as a fuel and (4) more tolerant of fuel contaminants, including sulfur, because these components burn off very quickly before deposition onto the fuel cell components.
Dominovas Energy is presently headquartered at 1395 Chattahoochee Ave., Atlanta, GA 30318. It leased an office and plant facility of approximately 20,000 square feet in which it plans to have final assembly carried out by some time in 2014. An additional manufacturing facility is projected in a free trade zone on the Caribbean island where one of its initial projects is located.
The financial records for Dominovas Energy showed only $10 in cash and no revenues at the time of the merger into WSEG. Obviously all of its business plans are forward looking and their is no guarantee any of them will ever be achieved.
In April of 2014, FINRA approved a name and symbol change to Dominovas Energy Corp (DNRG).
In October of 2014, DNRG signed an MOU with Delphi Automotive Systems LLC to help with their forward looking business plans.
In October of 2014, DNRG also signed a Equity Purchase Agreement with Kodiak Capital Group for Kodiak to provide up to $3,000,000 in funding for future projects. The agreement requires the approval of an S-1 filing. The large majority of financing agreements done between Kodiak and public traded companies never end up happening. Most never see an S-1 filing and the ones that do usually do not get SEC approval. It will be interesting to see if this S-1 filing that was filed on November 1st goes through. If it does we are looking at Kodiak getting up $3,000,000 worth of discounted free trading stock in the future which would kill any chance of a big name paid promotion. That would instantly put DNRG on the level with lower level paid awareness or even silly message board pumps instead.
The DNRG website can be viewed here.
The S-1 filing for the registration of the 21,944,635 shares that sparked this report was approved by the SEC August 11, 2014. That means that we might see those shares become free trading as early as February 11, 2015 making that a good time frame to start watching for possible future paid promotion activity. DNRG currently pays Quality Stocks (Michael McCarthy) for Investor Relation services but that doesn't mean it couldn't see another paid promoter get involved in the future.
As long as the Kodiak registration doesn't go through we'll keep DNRG on watch to possibly receive a pretty good paid promotion come mid-February or later. If it does get a good paid promotion the main focus will be those 21,944,636 S-1 shares even though the float might be as large as around 40 million shares.
So far DNRG has been very quiet with only lots of very very odd tiny tiny blocks of shares (usually under 10 shares per day) going through since 2013. I'm not sure I have ever seen so many single digit trades in one ticker's price history ever before.
As February approaches or new events occur for DNRG we'll keep our members updated about the ticker's potential.