Quarterly report pursuant to Section 13 or 15(d)

6. Cancellation of Management Services Agreement and Sale of BRHC Assets

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6. Cancellation of Management Services Agreement and Sale of BRHC Assets
9 Months Ended
Sep. 30, 2018
Cancellation Of Management Services Agreement And Sale Of Brhc Assets  
Cancellation of Management Services Agreement and Sale of BRHC Assets

Note 6 – Cancellation of Management Services Agreement and Sale of BRHC Assets

 

All of our management fee income in 2017 resulted from our management services agreement with Black Ridge Holding Company (BRHC), a company formed in 2016 as a result of our restructuring and of which we continued to hold a small equity interest, the remainder being held by one of our former creditors. On April 3, 2017, BROG was notified by BRHC of their termination of our Management Services Agreement and that they had finalized the sale of BRHC’s oil and gas assets to a third party. On April 3, 2017, BRHC signed a Contribution Agreement that provided for the transfer of ownership and title of all oil and gas assets held by BRHC in exchange for preferred membership interest in the acquiring LLC (the “BRHC Sale”). Consistent with the terms of the Management Services Agreement, the Company was paid for our management services through June 30, 2017.

 

The Company, Chambers Energy Capital II, LP and CEC II TE, LLC (together with Chambers Energy Capital II, LP the “Chambers Affiliates”) as the members of Black Ridge Holding Company, LLC (“BRHC”) agreed to dissolve and wind up BRHC and filed a Certificate of Cancellation under the Delaware Limited Liability Company Act as of October 3, 2017. On October 2, 2017, the Company entered into an agreement with the Chambers Affiliates whereby certain assets distributed to the Company upon the dissolution and winding up of BRHC effective as of October 1, 2017 were sold to the Assignees in exchange for cash consideration of $1,078,394. Additionally, cash and receivables totaling $4,645 in value were distributed directly to the Company from BRHC.