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19. Subsequent Events
6 Months Ended
Jun. 30, 2017
Subsequent Events [Abstract]  
Subsequent Events

Promissory Note

On July 7, 2017 the Company entered into a $500,000 Promissory Note (the Note) issued to Cadence Bank, N.A. (Cadence) and a Security Agreement by the Company in favor of Cadence. The Note bears interest at 4.5% per annum payable monthly and is due on October 7, 2017. The Note may be repaid at any time without penalty. The Note is secured by the Company’s deposit account at Cadence and all of the Company’s rights, title and interests in and to the contractual rights of the Company to receive payment from Chambers Energy Management for the purchase of the Company’s interest in Black Ridge Holding Company, LLC.

 

Rights Offering

On August 3, 2017, the Company’s offering of subscription rights (the “Rights Offering”) became effective with the SEC. The Company intends to distribute, on a pro rata basis, one Right for each share of common stock owned by shareholders as of the close of trading on August 2, 2017 (the “Record Date”). Each Right will permit a shareholder to purchase up to nine shares of common stock at a subscription price of $0.012 per share. If all of the shares are sold in the Rights Offering, the Company expects to realize total gross proceeds of approximately $5.182 million.

 

The Company intends to use the net proceeds of the Rights Offering for the sponsorship of a special purpose acquisition company (SPAC) focused on effecting a merger or similar business combination with a target business in the energy or energy-related industries (although the SPAC’s efforts to identify a prospective target business will not be limited to a particular industry or geographic region).

 

The Company intends to use the Company’s wholly-owned subsidiary, BRAC, as the entity to become the SPAC. In particular, presuming that the SPAC that we sponsor raises $100 million, we intend to purchase units in the SPAC equal to between $3 million and $3.3 million in a private placement that will occur simultaneously with the closing of this SPAC initial public offering. Any proceeds from the Rights Offering that remain following the SPAC sponsorship will be used for general corporate purposes which may include other investments and acquisitions.