I've spend several hours yesterday, with the help of a securities lawyer and an accountant, unraveling HE-5 Resources Corps' recent history, from the moment on that Giuseppe Gentile took control of the company in october 2012.
Only weeks after taking control Giuseppe Gentile announces the acquisition of a 35% stake in XII Tribes Entertainment by Archeos Entertainment, an asset or brand of HE-5 Resources. In a press release Gentile puts a $48 million price tag on XII Tribes, so the 35% stake is valued at $16.8M. In the months following the acquisition a blur of press releases hits the market, most of them signed off by XII Tribes CEO Michel Zgarka. In july 2013 in another press release the full merger between Archeos and XII Tribes is announced by Gentile, followed by another press release in october 2013 saying that Zgarka has been kicked out as CEO, but that all acquired assets remained with the company. Now its gets interesting: where are the assets on the balance sheet? Never between october 2012 and october 2013 did we see a change in assets on the balance sheet.
Enter Gary P. Molinaro and Yervant Manoian with a new activity in HE-5 Resources Corp.
Lets go back a little while. FansFrenzy was developed by The Clubs Choice Holding Company, that merged with Milenia Hope, just before the latter lost its listing on OTC Markets. From the moment Molinaro and Manoian took over at HE-5 Resources Corp, they signed off all filings published at OTC markets. From that moment on the business description changed and Fansfrenzy is called a brand of HE-5 Resources Corp, so now its an asset of HE-5. Again something is wrong. Take a look at the consolidated balance sheet of Milenia Hope Inc of August 31st 2013 that was filed at the SEC. HE-5 says it now owns Fansfrenzy, so they must have merged with The Clubs Choice (f.k.a. Milenia Hope inc), but the balance sheet tells us that didn't happen. But Molinaro signs off on the filings at OTC, not Gentile anymore. Besides that, Molinaro is a shareholder, holding 18 million preferred shares. He can't walk away from HE-5, claiming (like Zgarka did) that things didn't work out and that he took Fansfrenzy back. No, Fansfrenzy is owned by HE-5, no doubt about it. I double checked with the securities lawyer. The consequence of it all is that the balance sheet does not represent the true state of the companies assets and liabilities. And Molinaro knows and will be held accountable if we see another XII Tribes scenario.
That leaves the question why a decent man like Molinaro gets involved in such a high risk venture? Maybe I'm wrong, but so far the facts speak for themselves. And maybe we will see the turnaround at HE-5 into Fansfrenzy in the next few weeks, but then why the silence? And why is the company not current in Nevada and at OTC? And why is it trading under a ticker symbol that is synonymous for fraud?
