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Washer This is somebody else's opinion of the RTO read it and digest. "Forte Energy – a seven month wait for an appalling RTO – SELL!" ’ve been following the Forte Energy (FTE) RTO story since prior to suspension last December and, after seven months, the admission document relating to the acquisition of BOS Global finally came out on Friday and thought I would give it a review; the one word version of which is: SELL! As ever there are complexities in the 90 page admission document so I will try to set out the facts first before adding my concerns. For reference, it should be noted that Forte’s share price was suspended around the 0.007p level giving a market cap of approximately £800,000. Prior to suspension, the business had been funded by a £1 million Darwin convertible note, £700,000 of which has been converted, a decent chunk of which during December 2015, leading to an astonishing 9 billion shares being issued in short order and driving the total shares in issue to over 13 billion. As part of the RTO, there is an 1824:1 share consolidation, so that the existing 13 billion shares will become 7.5 million shares. The acquisition is of a Fintech business called BOS Global that has a couple of pieces of software (although the IP is owned jointly with another independent company) related to meetings and timesheets. The document states that the business is pre-revenue at the moment. Yes, pre-revenue The consideration for such an attractive business is 42.5 million shares in Forte Energy, so the existing shareholders end up with 15% of the business. Half of BOS Global is currently owned by the founder and CEO, Michael Travia, so he ends up with 43% of the share capital following admission although will be diluted potentially by the performance shares referenced below. For completeness, there is further dilution as there are also a million of shares being issued to Capresi for advisory services and a further 6.45 million “performance shares” being provided to key employees, so total shares post-deal will be 57.5 million. So what are my concerns? Well, I’ve touched on the fact that the business is pre-revenue. It is a start-up and, being frank, a start-up dealing with meeting notes and timesheets doesn’t get me overly excited. I’m of the view that the public markets isn’t really the appropriate home for start-ups but, what do I know. Secondly, it doesn’t have any money. Surely, the whole point of a start-up coming to AIM is to raise funds; however, despite the exciting Fintect tag, I am assuming that the various parties involved here have been running around the City trying to drum up interest to raise funds and have come up empty. I wonder why!

Accordingly, the business will be being funded in the short-term by the convertible notes from Michael Travia’s family trust, DJFT, and Capresi, of which £700k can still be drawn down, but what with fees related to the deal of over A$800,000, the business actually starts its life with net liabilities and although it has managed to get its working capital statement signed off that it has funds for 12 months, it must be close. To reemphasise the point, the proforma net assets of the combined business (page 62) estimates a net liability position as at 31 December 2015 of A$760,000 and the position won’t have improved since then. In any event, starting life under the pressures of death spiral financing from Darwin, DJFT and Capresi is hardly an auspicious start, particularly as £600,000 of that funding is from the Travia, who will be an Executive Director of the enlarged group. All feels a bit messy. Thirdly, and readers will know this is a bugbear of mine, the pricing. Apparently, the consideration shares are being issued at 8p, valuing the start-up that Forte is buying at £3.4 million. That seems toppy, but it’s also nonsense. There is no new money coming in here so that price is meaningless, it is an arbitrary figure agreed between two groups incentivised to come up with a high number. Let’s take a step back and have a think about valuing a business with net liabilities, no revenues, operates in an unexciting area, in need of additional funding shortly and awash with convertible debt. Personally, £2 million would be a push, which using the 57 million shares in issue at admission gets me to a share price of 3.5p, which pre-consolidation is a share price of around 0.002p. On Friday, the share price closed at 0.006p – three times my valuation. In addition, it’s hard to know how many shares Darwin still have. I struggle to believe that it managed to sell all 9 billion that it received in December, pre-suspension, so I suspect that there will be plenty of selling pressure around. If I was a shareholder, I would be doing the same as Darwin - SELL.

Uk2nigeria- "I took a gamble in FTE before suspension and may as well see it out. This is a gamble, this is not a researched, studied investment it is a gamble" No it is not a gamble and I have had this argument with many people before. A gamble suggests there is risk meaning it can go either way. You gamble on the national lottery, the horses, a game of cards and you gamble at casinos. They are genuine gambles the odds may be stacked against you but you can win. FTE/BGL is not a gamble. Other people have a 100% control over the direction of the share price. When you invest in the stock other people take a substantial part of your money by lowering the share price and pocketing the cash you invested. If you had invested in FTE just before the suspension these people have taken 50% of your money. nipknot said the stock is has levelled off at 0.003p - 0.004p. He is correct it does seem to me these people have taken a pause because the share price is so low. When FTE share price has consolidated into BGL at 8p they will return to take another 50%. FTE is not a gamble it is a certain loss.

deltalo - "How much time does it take for potential investors to see the chance for a multi bag share. Its crazy really,as we can see it but mabe its just overlooked on the market" No the market overall is a lot more greedier than you and understands a lot more about investments than you. As a private investor you will always be the last person to learn of any real value in a stock. You don't need to be looking around for support elsewhere the fact that Darwin are converting and selling their stock at 0.003p tells you all you need to know about BGL Some people say 'oh just ignore Darwin they only want their cash asap'. I say don't ignore Darwin for if Darwin could double their money from 300k to 600k by holding onto their stock for another two weeks until the RTO is complete they would. What's two weeks to Darwin when they've been here since March 2015. Darwin are getting rid of their stock now at 0.003p because they know for a FACT that it will be worth even less when BGL is admitted to trading.

nipknot - "But since its come back to market all its doing is bouncing between 30 and 40!!! Roll on the RTO" That's not true. When it came back to market on 22/07/16 it was bouncing around 70 and 80. People picked up shares in the believe they bought a bargain then it bounced around 60 - 70 then 50- 60 then 40 -50 then 30 - 40. Basically what is happening is that the bid price is always kept below where 95% of people have bought. This ensures that nobody but 5% of PIs and the professionals can sell at a profit. People say oh well when Darwin is gone these will rocket. Wrong again. Markets makers run open books. This means that if there is a surge in demand they forward sell shares that do not exist. They then square their books when the company issues new equity. For those of you that followed the New Oil story this is what happened. Billions were forward sold. Unbeknown to the MM the company had already reached its allocation for the year so they could not issue any more shares. The company approached the shareholders to seek permission to issue more shares and they said no. The regulators stepped in and said the company would be allowed to issue more shares irrespective of no vote or the MM would simply not be able to square their books. This is all documented history now. The moral of the story is that more buys than sells does not always equal a higher share price.

Shardster In these tough economy times there are no new PIs to investing in risky investments like shares. Today you are either an investor already or you don't invest at all. I would also hazard a guess that '77' was the year he/she was born. That would make him/her 39 today. Believe me he/she is no spring chicken to shares investment. Gone.

Costa77 Thank you for your response but please do not treat me like an idiot. You state - " AIM is extremely high risk and that is why I minimise my portfolio risk with on 5% of my total investment in AIM." Now how the hell would you know the AIM is extremely high risk unless you like the rest of us had lost **** loads in it. When people first invest they normally pick just one share they like. You claim you have just starting investing yet you already have a portfolio with only got 5% of your holding in the AIM. If that is the case then where is the remainder 95% of your money? There are sum real dummies on this BB but please be advised that I am not one of them. Speak Later

deltalo - "We must remember that 58.4% will not be in public hands on Admission" The 58.4% holding not in public hands is a meaningless figure and I will explain why. 58.4% of a company worth 4 million is 2.3 million. On admission it does not mean that the MT and Co will all be 2.3 million richer. The 4 million is a meaningless figure plucked out of the air. You will note from information held on the London Stock Exchange website the company is not raising any capital on admission. What that means is that there is nobody but themselves to endorse 4 million market cap or the 8p share price. The reality will be you can buy as many shares as you like so long as you stump up the money. http://www.londonstockexchange.com/companies-and-advisors/aim/aim/aim.htm

Costa77 - "Hi All, I have just recently decided to play the stock game," No you have not recently decided to play the stock game. Had you recently decided to play the stock game you would not and could not have heard of FTE so soon.

Bugerboy - " But why did they allow this go for a RTO. Surely there has to be something positive?" For a start the new rulings from 01/01/2016 state that new companies must come to the market with a mcap of 6 million. That is written in stone in the London Stock Exchange AIM regulations. I can only assume with the state of the economy, the uncertainty caused by Brexit and that fewer and fewer companies are listing the ruling has been relaxed and as BGL has paid the listing fees that's why they are here. There is nothing that has been hidden from the AIM regulators. Everything is in the admin doc. The market has already spoken this is why FTE has halved since its return to suspension and I also believe the BGL admission price will also halve. Speak Later.

deltato - "The potential is massive and with the FTE mkcap of 500k well its just a steal." You don't understand what is going on. The FTE market cap is 15% of BGL. That puts a value on the BGL of GBP3.8m. Can a company that has no assets, no revenue, loss making and net liabilities be worth GBP3.8m? In my opinion you will all be surprised at how quickly BGL share price drops. But it will not come as a surprise to the markets or the directors for they are fully away PIs will not fund BGL at a price of 8p. The funding from PIs will come when you have one or two zeros after the decimal point. Just like Darwin and other PIs here.

deltato - "The death spiral is not happening. Darwin, as I have to mention again is almost out" The death spiral is not happening because it is now over and that is why the share price is at 0.003p. The new death spiral starts on 31/08/2016. You are already aware of two death spiral conversions. 1. DJFT 2.Capressi The admin doc has advised you of further potential equity issues to be used for working capital. The admin doc and notice to meeting doc have both advised you that BGL does not generate any significant revenue, is loss making and is coming to market with net liabilities. BGL have quoted an admission price of 8p. In my opinion this is likely to halve on flotation day and will go into a permanent decline as DJFT and Capresi convert their outstanding loans and the company issues equity to fund itself. BGL is FTE MKII with only more directors mouths to feed and new set of bubbly and enthusiatic PIs.

Shardster - "...he leaves for the day just after 9am so we won't have to bare him too much longer" That's correct. I have to go to work. Stacking shelves at *****. And do you know why I'm still stacking shelves at my advanced age? Invested in too many companies like FTE. See you all this afternoon (if I'm not ordered to do a late shift.)

Shardster Nothing to do with buys at all. Tens of billions have been bought since 22/07/2016 has any of the buys stopped the 50% collapsed in the shareprice?. As I stated yesterday Darwin is now irrelevant. The real dilution starts when the RTO is complete. Furthermore FTE/BGL have advised you in the admin doc further dilutive equity issues may be required to provide working capital. Watch and learn.

The MM trick is to bring it back to 'unchanged'. PIs now think that's the end of Darwin and in they pile.

tidd83 That's correct. Everybody knows thicko PIs will get stuck on the 100k figure when the admin doc clearly states less than a 100k. As per my previous post given Darwin's history the standstill agreement will kick in at GBP1.00

Washers - "GBP 100k as per admin doc will be a standstill agreement and not converted at this time." Washers read the admin doc very carefully. It does not say GBP100k it says less than GBP100K. That is very very important.. If Darwin's past performance on other stocks is anything to go by the standstill agreement is likely to start at GBP1.00 However I will agree with deltato Darwin is old news., The stock is where it is on the fundamentals of BGL not on any further conversion loan notes that may or may not be exercised.

Shardster - "Bloch, he could have just held and wouldn't have lost a thing at all. As you said in a previous post, you only lose once you sell!" No I said the opposite. If a share price is lower than what you bought it for then you have lost money whether you sold at the price or still holding. Speak Later

KNIGELK - "Yet you only need to be in one share that multi bags (like AST atm) to wipe out a years losses or return a decent profit hence why so many stick with AIM. The trick is not to put all your eggs in one basket imho" So true but you can't make the type of gains where you can stick two fingers up at your boss unless all your eggs are in the one basket that multibags.

Shardster - "so people who have lost money are better off?....." YES. You would be financially better of for losing £700 as opposed to losing £1400. When FTE returned from suspension you could have sold for 0.008p. For 98% of holders that would have been selling at a loss. But if you sold today you'd only get about 0.0035p for same shares. If he so desired Thechukkers can return to FTE and purchase twice as many shares for the same amount of money. If all still holding could get into a time machine back to 22/07/2016 you would all sell knowing what you know today.