Aladdin was incorporated on January 17, 1997, has three full time employees and has yet to drill an oil well. As noted in a previous post, the company acquired "...certain exploration sub-surface easements with the Los Angeles Basin of California..."
These easements were acquired from the Metzenbaum Trust, a entity controlled by ADDN's President and majority shareholder, Meghan Robins, for 3,000,000 shares of the common stock of Aladdin. These shares have subsequently been exchanged for 3,000,000 common shares of ADDN, which, based on Friday's close, have a current value of $9.0 MM.
Per the PREM14C, "...the parties assigned a value of $1,500,000 to the oil and gas assets of the Metzenbaum Trust...The valuations were not based upon independent appraisals and were not the result of arms length negotiation...Ms. Robins commissioned two independent geologists to assess the merits of the subsurface easements owned by the Metzenbaum Trust and to compile background information relating to the Salt Lake Field, including both historical operating data and information regarding known productive hydrocarbon formations within the Salt Lake Field. The valuations which Ms. Robins ultimately assigned to these assets were based, in part, on the information and assessments provided by these independent geologists.
"Although a valuation of $1,500,000 was assigned to the oil and gas assets of the Metzenbaum Trust for acquisition purposes, for financial accounting purposes the transaction was required to be accounted for as an exchange between entities under common control. As a results, on the books of Old Aladdin, the assets were recorded at the cost basis of the Metzenbaum Trust which was determined to be $0." |
