Shell Sum­mary for Jan. 11, 2019

Stockwatch Daily - - SHELLS - By Stock­watch Busi­ness Re­porter

THE TSX Ven­ture Ex­change closed up 4.84 points to 601.77 Fri­day, end­ing the week up 14.33 points. Steve Ba­jic’s 10th cap­i­tal pool shell, Huff­in­g­ton Cap­i­tal Corp. (HU: halted), has re­leased the terms of its qual­i­fy­ing trans­ac­tion, which is the ac­qui­si­tion of Nano Graphene Inc. (do­ing busi­ness as Grapheneca). The shell, which has 1,575,000 shares is­sued, will is­sue 60 mil­lion shares to its tar­get’s share­hold­ers.

Nano Graphene has a facility in Brook­lyn, N.Y., where in 2017 it be­gan pro­duc­ing graphene flakes, graphene paste and graphene com­pos­ites (with ti­ta­nium diox­ide or sil­i­con diox­ide, for ex­am­ple). As of Septem­ber, 2018, how­ever, the com­pany had not yet made any sales. In con­nec­tion with its launch on the TSX-V, Nano Graphene must sell a $4.5-mil­lion to $6.6-mil­lion pri­vate place­ment at 30 cents. Nano Graphene was co-founded in 2016 by Boris Gold­stein, who holds a PhD in ap­plied math­e­mat­ics. He has co-founded or founded more than a dozen com­pa­nies, mostly pri­vate and mostly tech firms. In 1989, while still liv­ing in Latvia, he founded a fi­nan­cial and en­ter­prise soft­ware com­pany called Soft­ware House High Tech­nolo­gies. In 1991, he moved to San Fran­cisco, re­main­ing the chair­man and chief ex­ec­u­tive of­fi­cer of Soft­ware House un­til 1995. Since 1999, Dr. Gold­stein has been the man­ag­ing direc­tor of Pa­cific Ven­ture Fund. Through this fund, he has worked with var­i­ous start-ups in­clud­ing web­site designers, app devel­op­ers and an Ecuadorean gold ex plorer. Among the web­sites be­ing de­signed is Lend In­dex, a blockchain-based web­site that will sup­pos­edly fa­cil­i­tate the loan ap­pli­ca­tion and ap­proval process be­tween bor­row­ers (specif­i­cally small busi­nesses) and lenders. Lendin­dex LLC, of which the chair­man and pres­i­dent is Dr. Gold­stein, ex­pects to launch the Lend In­dex web­site in June.

Dr. Gold­stein is the chair­man of a med­i­cal de­vice com­pany, Brain Sci­en­tific Inc. (BRSF), which has a portable EEG (elec­troen­cephalo­gram) de­vice that is ap­proved by the U.S. Food and Drug Ad­min­is­tra­tion. Brain Sci­en­tific had not yet gen­er­ated any sales as of Septem­ber, 2018. That same month, Dr. Gold­stein took the com­pany pub­lic on the pink sheets through an all-share deal with a dor­mant list­ing. Brain Sci­en­tific has not traded a sin­gle share since it listed. There are bids rang­ing from 0.1 U.S. cent to 10 U.S. cents; there are no of­fers. Dr. Gold­stein and his tech in­vest­ment fund, High Tech­nol­ogy Cap­i­tal Fund LP, hold a com­bined 7.42 mil­lion shares or 74.2 per cent of Brain Sci­en­tific.

Ev­i­dently a man of many in­ter­ests, Dr. Gold­stein used to be a yoga in­struc­tor. These days, he teaches a class on desert sur­vival. On clos­ing of the QT, the largest share­holder of the re­sult­ing is­suer will be Dr. Gold­stein’s High Tech­nol­ogy Cap­i­tal with about 23 mil­lion shares or 30 per cent.

Dr. Gold­stein will be joined on the board of the re­sult­ing is­suer by Irina Mi­galina and Dr. Ge­orge Anas­tassov. Ms. Mi­galina lives in Latvia and was a fi­nan­cial ad­viser for 12 years with the Europack Group, a Rus­sian man­u­fac­turer of in­dus­trial pack­ing equip­ment and stor­age sys­tems.

Dr. Anas­tassov lives in New York and is a med­i­cal doc­tor as well as a den­tist. He is the founder and chair­man of the OTCQB-listed Axim Biotech­nolo­gies Inc. (AXIM: $1.36 (U.S.)), which in Oc­to­ber, 2016, was trad­ing be­low 50 U.S. cents. In Jan­uary, 2017, the stock shot up to $19.80 (U.S.), after Axim re­leased pos­i­tive pre­clin­i­cal re­sults for its CanChew gum as a po­ten­tial treat­ment for symp­toms of ir­ri­ta­ble bowel syn­drome. CanChew con­tains cannabid­iol (CBD). In the two years since then, in­vestor ex­cite­ment has sub­sided. Axim is now con­duct­ing phase 2 clin­i­cal tri­als on CanChew. It is also work­ing on CanChew RL, a po­ten­tial treat­ment for rest­less leg syn­drome. Axim has an­other CDB gum, MedChew, which it says is a po­ten­tial treat­ment for pain and spas­tic­ity re­sult­ing from mul­ti­ple scle­ro­sis. MedChew is un­der­go­ing phase 1 clin­i­cal tri­als. Axim, a U.S. com­pany, also hopes to one day sell its prod­ucts (once they are ready) here in Canada with help from Re­vive Therapeutics Ltd. (RVV: $0.10) and pend­ing Health Canada ap­proval. Dr. Anas­tassov was the one who de­vel­oped Axim’s CBD gum for­mu­la­tion. Huff­in­g­ton Cap­i­tal listed in April, 2016, with a $200,000 ini­tial pub­lic of­fer­ing at 20 cents. It is Mr. Ba­jic’s 10th cap­i­tal pool shell. His first nine shells yielded six suc­cesses and three fail­ures for their IPO in­vestors, as we dis­cussed in de­tail in the shell sum­maries for Sept. 9, 2015, and Sept. 13, 2018. We con­sider a shell to have been a suc­cess for its IPO share­hold­ers if they had suf­fi­cient op­por­tu­nity to get out of their in­vest­ment with a profit, rea­son­ably soon after the shell closed its QT. At Huff­in­g­ton, since there is no pro­posed roll­back, the IPO in­vestors will need 20 cents to break even.


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