Xun Energy, Inc. (fka XNRG)

[Carsmax177]

For CM Research, per the debt settlement they need to be pre-paid for their services. They are in the same boat as Vencedor, that the agreement requires the money up front before services are performed. Per “Compensation” of the agreement for CM Research:

“For the services to be rendered and performed by Consultant during the term of the Agreement, Client agrees to pay the Consultant $365,000 upon signing the Agreement. Additional months of services rendered beyond month 13 would be compensated at $30,000 per month paid in advance of the month of services. All payments to be made by wire transfer or ACH payment”

http://civilinquiry.jud.ct.gov/DocumentInquiry/DocumentInquiry.aspx?DocumentNo=8154974

Additionally, from the 10K:

“On May 1, 2014, the Company entered into a twelve month Investor Relations and Marketing Agreement (IRMA) for $365,000 with a third party payable in cash. The IRMA requires the fees to be pre-paid prior to services rendered. The Company has been invoiced for the pre-payment and recorded the invoice in our accounts payable and recorded the expense as a prepaid charge which will be amortized as the work is completed. The Company may terminate the IRMA without penalties or damages and is only liable for work completed by the Consultant. As of May 31, 2014, the Consultant has not commenced work on the IRMA.”

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=10203336

Two things to note here. 1. Services will not be provided unless fees are pre-paid. 2. The company was invoiced for the agreement and put in their Accounts Payable. Meaning, this was on the books prior to the debt settlement.

Now, under Part D of the agreement, it says

“The client agrees that the above monthly expenditure are estimates and may vary from month to month. Consultant agrees not to exceed expenditures of $365,000 for the 13 month period unless approved in writing by the Client.”

http://civilinquiry.jud.ct.gov/DocumentInquiry/DocumentInquiry.aspx?DocumentNo=8154974

I take based on this, they are prepaying for $365,000 worth of services, and that they have not already performed services. IMO think of the $365,000 as the budget for expenses and anything over need to be approved in writing by XNRG.

Looking again at the services in the agreement, it looks more like complimentary services rather than primary PR services. Per the agreement under Engagement of Consultant part A:

“The consulting services to be provided by Consultant shall include, but are not limited to, the development, implementation and maintenance of an ongoing program to increase the investment community’s awareness of Clients activities and to stimulate the investment community’s interest in Client. Client acknowledges that Consultant’s ability to relate information regarding Clients activities is directly related to the information provided by the Client to the Consultant”

http://civilinquiry.jud.ct.gov/DocumentInquiry/DocumentInquiry.aspx?DocumentNo=8154974

IMO, Sounds more like they are there to get the most awareness out of PRs or 8Ks, not to write and handle shareholder questions.

Further, looking at part C of the agreement, with the exception of the third bullet, they relate to getting awareness, not writing PRs.

Bullet point three, IMO, sounds like a catch-all for miscellaneous things that come up.

To sum this up, it is an agreement which needs to be paid up front for services to begin, and the amount is the budget for services provided. I do not see how this is a bad thing, this will provide more attention when the company puts PRs out.

I don’t see how this is encumbering shareholders, XNRG is giving a way to get some debt paid off. Further, I do not see how this is fraudulent or a hijacking of the debt settlement.