Shell Sum­mary for Dec. 7, 2017

Stockwatch Daily - - SHELLS - by Stock­watch Business Re­porter

THE TSX Ven­ture Ex­change gained 3.96 points to 787.62 Thurs­day. Robert Hall’s cap­i­tal pool shell, Ab­cana Cap­i­tal Inc., has closed its qual­i­fy­ing trans­ac­tion, which was the ac­qui­si­tion of a Bri­tish Columbia min­ing ju­nior. The shell, which had four mil­lion is­sued shares, is­sued an­other 21,487,301 shares to its tar­get’s share­hold­ers. Ab­cana also sold a $183,000 pri­vate place­ment of 1.02 mil­lion flow-through units at 10 cents and 1.2 mil­lion non-flowthrough units at 6.75 cents. To­day, the re­sult­ing is­suer listed as Casa Min­er­als Inc. (CASA: $0.10). It did not trade.

Casa owns a min­eral ex­plo­ration prop­erty near Ter­race, B.C. It also holds an op­tion to ac­quire a 75-per-cent in­ter­est in an­other prop­erty near Swift River, close to the Yukon bor­der. The com­pany’s pres­i­dent and chief ex­ec­u­tive of­fi­cer is Far­shad Shir­vani, a ge­ol­o­gist in West Van­cou­ver. He is also Casa’s largest share­holder, with 8,199,000 shares or 29.6 per cent on clos­ing of the QT. Mr. Shir­vani is also the pres­i­dent and CEO of an­other B.C. min­ing ju­nior, Dou­ble­view Cap­i­tal Corp. (DBV: $0.065).

Ab­cana Cap­i­tal listed in Novem­ber, 2011, with a $200,000 ini­tial pub­lic of­fer­ing at 10 cents. It was founded not by Mr. Hall but by one-time shell-maker Shaun Masker­ine. The shell’s IPO share­hold­ers were made to wait six years for a QT, which should nor­mally take only two or three years to ar­rive, so they might well con­sider Ab­cana a failure. As well, the clos­ing of the QT has not yet given them an op­por­tu­nity to get out of their in­vest­ment with a profit. These days, Mr. Masker­ine is one of two cor­po­rate sec­re­taries at Strata-X En­ergy Ltd. (SXE: $0.025), an oil and gas ju­nior with prop­er­ties in Botswana, Illi­nois and Cal­i­for­nia.

Mr. Hall took over Ab­cana Cap­i­tal from Mr. Masker­ine in 2014. First-time shell pro­moter Mr. Hall ar­ranged Ab­cana’s QT and re­mains a di­rec­tor of Casa Min­er­als. From May, 2013, to July, 2017, he was the chief fi­nan­cial of­fi­cer, the sec­re­tary and a di­rec­tor of Mr. Shir­vani’s Dou­ble­view Cap­i­tal. Cur­rently, Mr. Hall is also a di­rec­tor of an in­ac­tive Namib­ian oil and gas ju­nior, Letho Re­sources Corp. (LET: $0.22).

Praveen Varsh­ney has filed a fi­nal prospec­tus to list his third cap­i­tal pool shell, AAJ Cap­i­tal 1 Corp. The shell plans to sell a $250,000 IPO at 10 cents, through Canac­cord Ge­nu­ity Corp. We dis­cussed AAJ Cap­i­tal in more de­tail in the Shell Sum­mary for Nov. 6, 2017. We also dis­cussed in that sum­mary Mr. Varsh­ney’s shell-mak­ing record. In April, 2016, he closed a hemp QT for his first shell. He man­aged to close a QT for his sec­ond shell much ear­lier; that QT was a med­i­cal de­vice deal, which closed in 2011. Mr. Varsh­ney’s first two shells yielded one suc­cess and one failure for their IPO share­hold­ers. We con­sider a shell to have been a suc­cess if its IPO share­hold­ers had suf­fi­cient op­por­tu­nity to get out of their in­vest­ment with a profit, rea­son­ably soon af­ter the shell closed its QT, and the shell should not have taken too long to close a QT. The IPO share­hold­ers of Mr. Varsh­ney’s first shell waited eight long years.

Mr. Varsh­ney is the pres­i­dent of two other shells. One is a cap­i­tal pool shell called Blue­rock Ven­tures Corp. (BCR: $0.18), which he did not list him­self and which does not have a QT in progress. The other is an NEX shell, West­bay Ven­tures Inc. (WEST), which is halted pend­ing a re­cently an­nounced deal. West­bay plans to ac­quire a Colorado soft­ware com­pany called Char­gaCard Inc. The shell, which has 7,006,669 shares is­sued, will is­sue 38,754,000 shares to its tar­get’s share­hold­ers.

Char­gaCard has a pay­ment pro­cess­ing plat­form that en­ables lawyers to col­lect le­gal fees from clients. Ac­tu­ally, lawyers al­ready have a mech­a­nism for col­lect­ing le­gal fees from clients. They will not re­lease a client’s file un­til he has paid. Char­gaCard launched its pay­ment pro­cess­ing plat­form last month. It is work­ing on an­other prod­uct, a pay­ment pro­cess­ing and fund trans­fer app, like Pay­Pal but for the lat est in b uz­zwords, cryp­tocur­ren­cies. Char­gaCard’s pro­mo­tional ma­te­ri­als from the last few months have re­ferred to the app by dif­fer­ent names, in­clud­ing Cryp­tonite, Cryptan­ite and CryptaCash. If the com­pany has not yet set­tled on a name, then it will prob­a­bly do so be­fore Fe­bru­ary. It ex­pects to launch the app in beta mode that month, and then the gen­eral launch will fol­low in March. (There is an ex­ist­ing app calle d Cryp­tonite, but it is a data en­cryp­tion app de­vel­oped by Ger­mans.)

Ac­cord­ing to West­bay, the re­sult­ing is­suer will have five di­rec­tors. It has iden­ti­fied one so far: John Ea­gle­ton, a co-founder of Char­gaCard. Mr. Ea­gle­ton will also be the CEO of the re­sult­ing is­suer. Pre­vi­ously, he was a fixed-in­come trader with BNP Paribas. In 1999, he co-founded the In­ves­tars web­site, which of­fers in­vest­ment re­search and an­a­lyt­ics to bro­kers and in­vestors. In an in­vestor pre­sen­ta­tion re­leased by Char­gaCard on Oct. 31, it listed the fol­low­ing five di­rec­tors: Mr. Ea­gle­ton, Mr. Varsh­ney, Maria Nosikova, Ja­son Sear­foss and Jose Vieitez. Ms. Nosikova is an in­for­ma­tion tech­nol­ogy project man­ager. She will be the chief prod­uct of­fi­cer of the re­sult­ing is­suer. Mr. Sear­foss is the CFO of a Colorado health and tech start-up fi­nancier called Boom­town Ac­cel­er­a­tor. From 2008 to 2013, he worked at Royal Bank of Scot­land in Con­necti­cut, man­ag­ing tech­nol­ogy in­fra­struc­ture in the Amer­i­cas. From 2012 to 2016, he was the CFO of a Chicago pri­vate eq­uity fund, Long­ford Cap­i­tal Man­age­ment LP. The fifth di­rec­tor, Mr. Vieitez, is a soft­ware de­signer who worked at Google for eight months from Septem­ber, 2012, to May, 2013. These days, he is a di­rec­tor and port­fo­lio man­ager at Boom­town.

Mr. Varsh­ney has been the

pres­i­dent of West­bay since 1995. At the time, the com­pany was a Colom­bian oil pro­mo­tion called Afrasia Min­eral Fields Inc. The stock peaked at $1.30 in 1996. Three years later, as In­ter­net stocks be­came the fad, the com­pany be­gan search­ing for an In­ter­net deal. By 2001, it had found none, and its stock had fallen to 15 cents. Mr. Varsh­ney later sought to use Afrasia to launch an Al­berta nat­u­ral gas ex­plorer, an Ari­zona cop­per pro­mo­tion, a B.C. se­nior care home op­er­a­tor and a Cal­gary mobile app de­vel­oper. Af­ter a long and sorry his­tory on the ex­change, Afrasia rolled back 1 for 4 in Jan­uary, 2017, and changed its name to West­bay Ven­tures. Be­fore halt­ing to an­nounce the deal with Char­gaCard, West­bay last closed at 47 cents. In con­nec­tion with the ac­qui­si­tion, West­bay plans to sell a $3-mil­lion pri­vate place­ment at 45 cents.


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