Each one in plain English, with the numbers worked through for a shareholder.
12 Apr 2011material agreement● NeutralMajor
On April 8, 2011 the company signed a merger agreement with American Eagle Energy Inc. (a different company from the filer's later name), which will merge into a new Eternal subsidiary, with Eternal surviving. After closing, American Eagle holders will own 80% and Eternal holders 20%, an outcome an investment bank called fair to Eternal. A reverse split and a listing application on a senior exchange are planned, and closing is expected in early summer, subject to share registration and American Eagle shareholder approval. The press release also references the Spyglass prospect in North Dakota and the Hardy project in Saskatchewan.
On October 14, 2009 the company issued 6,500,000 restricted shares to its three directors and two senior managers in exchange for them giving up their outstanding stock options. The shares are booked at $117,000 ($0.018 per share), cannot be sold for two years, and are forfeited if officers leave within one year (or directors fail to serve one year). The company will also lend the officers about $30,000 for tax withholding. This adds shares and replaces the earlier option awards (including Colby's 1,443,800-share option, inference).
On December 4, 2006 the company signed a first amendment to CEO Bradley Colby's November 2005 employment agreement. The filing does not describe what changed; the terms are only in the attached exhibit, so the effect on shareholders cannot be stated.
On August 28, 2006 the company signed a letter agreement to buy Zavanna Canada Corp., which owns oil and gas leases, royalty interests and production in Alberta, for an expected Cdn $11,125,000, with a Cdn $250,000 deposit paid. The deposit is refundable if the deal is cancelled by September 30, 2006, due diligence ends October 1, 2006, and closing is expected by November 15, 2006. Up to Cdn $1,000,000 of the price would be returned from escrow if Zavanna's monthly cash flow misses Cdn $275,000 (Nov 2006-Mar 2007) or Cdn $300,000 (Nov 2006-Jun 2007). This is the company's first Canadian asset deal, outside the Nevada and North Sea projects, and it is not yet closed.
This second amendment to the December 2005 report on CEO Bradley Colby's employment agreement still states the signing bonus as $165,000, although the June 21, 2006 amendment had stated $125,000. Salary ($60,000), the 1,443,800-share option at $1.00, the two-year term, the repurchase right on his 3,250,000 shares (2,500,000 held of record, 750,000 held beneficially) and one year's salary as severance are as before. The filing does not explain the bonus discrepancy, so which figure is right is unresolved.
This amends the December 9, 2005 report on CEO Bradley Colby's employment agreement. The signing bonus is now stated as $125,000, not the $165,000 reported earlier, so this corrects that figure. Salary ($60,000), the 1,443,800-share option at $1.00, the two-year term, the repurchase right over his 3,250,000 shares, and one year's salary as severance are unchanged. The filing adds the split of his shares: 2,500,000 held of record, released 25% every six months, and 750,000 held beneficially, released after one year.
1 June 2006capital raising announcement▲ GoodMajor
The private placement's fourth and final closing, on May 31, 2006, sold 440,000 units for $220,000. In total 13,124,000 units were sold for $6,562,000 at $0.50 each, each with a two-year warrant at $1.00. The press release says proceeds will fund exploration in the North Sea and Nevada and general corporate purposes. This ends the financing thread and leaves the company funded for now, with more shares and warrants outstanding.
What it means for a shareholder
13.1m new shares at US$0.500 to raise about US$6.6m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
On May 19, 2006 the company signed a revised North Sea Quad 14 letter agreement with International Frontier, Palace, Oilexco and Challenger Minerals, with Oilexco to be operator. The company will now fund 12.50% of drilling costs instead of 15%, and its working interest after drilling falls to 9.1875% from 10%. The Laurel Valley #1 well is to start by December 31, 2006, which replaces the earlier second-quarter 2006 target. It still needs UK Department of Trade and Industry approval and definitive agreements.
A third closing of the private placement, on May 8, 2006, sold 808,000 units at $0.50 for $404,000, on the same terms as before (share plus two-year $1.00 warrant). Together with the earlier closings, 12,684,000 units had been sold, adding modestly to the dilution already disclosed. The press release calls this the 'second closing' in one sentence, which looks like a typo, since the filing itself says third.
What it means for a shareholder
808,000 new shares at US$0.500 to raise about US$404,000. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
Effective April 17, 2006 the company agreed with Eden Energy that it can join the Cherry Creek Project, about 77,000 gross and net acres in central eastern Nevada, on the same terms as the earlier Nye County deal. The company says that of its two Nevada prospects it intends to focus first on Cherry Creek. This adds a second Nevada prospect alongside Big Sand Spring Valley and shifts initial exploration focus toward it.
29 Mar 2006capital raising announcement● NeutralMajor
The company completed a second closing of its private placement on March 29, 2006, selling 8,666,000 units at $0.50 for $4,333,000, bringing the total to about $5,938,000 per the press release. Terms are the same: each unit is one share plus a two-year warrant at $1.00, with the same registration deadlines and penalty. More shares and warrants are now outstanding, which dilutes existing holders.
What it means for a shareholder
8.7m new shares at US$0.500 to raise about US$4.3m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
8 Mar 2006capital raising announcement● NeutralMajor
The company closed the first part of a private placement on March 2, 2006, selling 3,210,000 units at $0.50 each for $1,605,000. Each unit is one share plus a two-year warrant to buy another share at $1.00. It must file a resale registration statement within 120 days and get it effective within 180 days or pay investors 1.0% per 30 days, and it owes finders 8% of proceeds. More closings were expected through March 17, 2006. This is the first outside money raised since the $1,126,000 placement at the time of the November 2005 Nevada deal, and it adds shares and warrants, so it dilutes existing holders.
What it means for a shareholder
3.2m new shares at US$0.500 to raise about US$1.6m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
3 Feb 2006capital raising announcement● NeutralMajor
On January 30, 2006 the company took an option, via a letter agreement with International Frontier Resources, to join drilling of a test well in North Sea Quads 41 and 42, for a ten percent working interest. It paid $75,000 up front, will pay 15% of test well, testing and completion costs, and must provide a $1,500,000 letter of credit for Palace Exploration. It also pushed the Quad 14 letter-of-credit deadline from February 5 to March 3, 2006 with no other changes, and agreed to issue 350,000 shares to finder Taverham Company Ltd. only when the Quad 14 and Quad 41/42 acquisitions close. This adds a second North Sea project beyond the Quad 14 deal from November 2005; the press release says drilling is tentatively set for the third or fourth quarter of 2006, subject to rig availability.
The company signed the final employment agreement with CEO Bradley Colby (effective November 7, 2005), settling terms first outlined in the November 9 filing. It provides a $165,000 signing bonus, a $60,000 annual salary, and an option over 1,443,800 shares at $1.00 vesting over three years. Colby's 3,250,000 shares are subject to a company repurchase right that lapses over time, and he gets one year's salary as severance if terminated without cause or for good reason.
On November 29, 2005 Eternal Energy agreed with International Frontier Resources to take a 10% working interest in a North Sea exploration project in Quad 14 (a 255 square kilometer block). It pays $90,000 up front plus 15% of the costs of the first exploratory well, and provides a $1,500,000 irrevocable letter of credit in favor of Palace Exploration Limited. The press release says drilling is scheduled for the second quarter of 2006, subject to rig availability. This adds a second exploration area beyond the Nevada project.
An amendment to the November 10 auditor-change report. It extends the 'no disagreements' period to November 4, 2005 instead of June 30, 2005; the dismissal of Franklin Griffith and the appointment of Kelly & Co. are unchanged.
Eternal Energy reported that on November 4, 2005 it dismissed Franklin Griffith and Associates as auditor and appointed Kelly & Co. The filing says the board approved the change, the 2004 audit report had no adverse opinion, and there were no disagreements. This is the second auditor change of 2005.
This information statement explains the change in control around the Nevada deal. On November 7, 2005 there was a 35-for-1 forward split, and Bradley Colby took beneficial ownership of 26,250,000 post-split shares from Fisher and Murdoch, of which 23,000,000 were cancelled, leaving him 3,250,000. Colby and John Anderson joined the board and Colby became President, CEO, Treasurer, CFO and Secretary; Fisher, Murdoch and Sturdy resign from the board ten days after filing. A private placement raised $1,126,000 for 1,126,000 shares plus warrants at $1.20, and 28,876,000 shares were outstanding.
On November 7, 2005 Golden Hope merged with its new subsidiary and renamed itself Eternal Energy Corp. Through the merger it took over a purchase agreement with Merganser Limited, giving it Merganser's rights to a 50% working interest in leases of about 82,184 gross acres in the Big Sand Spring Valley Prospect, Nye County, Nevada, partnered with and operated by Eden Energy. Merganser is to receive 1,000,000 shares for each 10,000,000 barrels of net proved oil reserves in a calendar year, and the filing says the company will need more funding, which may dilute shareholders. It also reports a private placement (Item 3.02, details truncated in the text provided). This turns a shell-like company into a Nevada oil and gas exploration company.
A second amendment to the same auditor-change report. It corrects the period covered by Clyde Bailey's earlier audit report to July 25, 2003 (inception) to December 31, 2003, keeps Franklin Griffith & Associates as the new auditor, and files the former auditor's letter as Exhibit 16.
An amended version of the March 8 auditor-change report. It changes the new auditor from Jason Griffiths, CPA to Franklin Griffith & Associates of Las Vegas, to audit the 2004 financial statements. The reasons for Clyde Bailey's resignation and the 'no disagreements' statement are unchanged.
The company, then named Golden Hope Resources Corp., reported that its auditor Clyde Bailey, PC resigned on March 4, 2005 for health and other reasons, and that Jason Griffiths, CPA was appointed on March 5, 2005 to audit the year ended December 31, 2004. The filing says there were no disagreements and the earlier audit report had no adverse opinion.
