A recap of the ADDN reverse merger:
Buffalo Capital V, Ltd.
Aladdin Oil Corporation (ADDN), a company that was originally established in February 1953, merged with Buffalo Capital V, Ltd., a manufactured shell. The company subsequently changed its name to Aladdin Oil Corporation. The merger closed on June 28, 1999.
According to the company’s 8-K filed on May 10, 2001, Aladdin Oil “…is an independent oil and gas company engaged in the acquisition and exploration of oil and gas properties within the United States.”
Buffalo Capital V was incorporated on September 19, 1997 and filed its initial 10SB12G with the SEC on March 4, 1998, describing itself as a “blank check” or “blind pool” company.
Buffalo Capital V was initially capitalized with $7,500 in cash. Adjusted for a two-for-one stock split, there were originally 1,020,000 shares issued and outstanding. The three insiders were issued 990,000 of these shares for services valued at $9,900. An additional 30,000 shares were sold at $.25 each. The company also issued 1,020,000 Class A warrants to purchase common shares at $2.00 per share and 510,000 million Class B warrants to purchase common shares at $4.00 per share.
The S-8 filed on June 3, 1998 registered an additional 115,000 shares, valued at $11,500, that were issued for consulting services. There were now 1,135,000 shares outstanding. The stock was split four-for-one on July 17, 1998 and an additional 80,000 shares, valued at $4,000, were issued for consulting services on July 20, 1998. As of July 20, 1998, there were 4,620,000 shares outstanding.
The transaction was first announced in an 8-K filed on August 17, 1998 and closed on June 28, 1999. Prior to the close, the company completed a 1-for-2 reverse split, reducing the number of outstanding shares to 2,310,000. Certain of the old Buffalo shareholders agreed to surrender a total of 1,903,901 shares, further reducing the number of outstanding shares to 406,099. 3,718,320 shares, representing a 90.15% interest, were issued to the Aladdin Oil shareholders. The principals of Buffalo Capital V received a cash payment of $125,000.
Certain of the Aladdin shareholders also received 1,677,000 shares of Series A Convertible Preferred Stock with a liquation preference of $.75 per share ($1,257,750 in total). The preferred shares were convertible into common shares on a one-for-one basis.
Most of the details surrounding the transaction can be found in the 8-K filed on May 10, 2001:
sec.gov
On June 22, 1999 a thread was set up on SI in a half-hearted attempt to pump the stock. The thread was started by OilDiva. It was her only post on SI. An ADDN thread was started by Raging Bull by OilDiva2. I have always assumed that the threads were started by one of the company’s promoters, perhaps Meghan Roberts, the President of ADDN.
Subject 29054
Subsequent to the close of the transaction, the shares of ADDN, which were very illiquid, traded as high as $3.00 per share. The old shareholders of Buffalo Capital V had agreed to lock up their shares for a twelve month period, which meant that the float approximated 80,000 shares. At $3.00 per share, the stock held by the old shareholders had a paper value of approximately $1.2 million.
The company’s revenues for 1998 were only $19,000. For the nine months ending September 30, 1999, revenues were only $21,000. No other financial statements are available.
The company needed to raise $5.0 million to develop its properties. There is no evidence that this money was ever raised. The last SEC filing, an 8-K announcing a change in accountants, was filed on May 14, 2001.
The company appears to have raised some cash subsequent to the merger through the sale of stock but there are no details available.
On January 8, 2001, the company announced that it had sold 6.5 million shares of the company, equal to a 36.275% interest in the company. The purchase price was not disclosed.
sec.gov
On March 19, 2001, the company filed an 8-K disclosing that the company had become aware of some irregularities that needed further investigation:
sec.gov |
