Each one in plain English, with the numbers worked through for a shareholder.
18 Apr 2012business combination● NeutralMajor
On April 3, 2012, the company sold the assets of its Delta Seaboard Well Service subsidiary to Delta Seaboard, LLC, owned by Derrick and Burleigh, for $1,600,000 cash plus a 5-year, 5% note for $1,400,000 secured on the business's 3.2-acre property. Derrick and Burleigh resigned as officers and directors and gave their 31,925,832 shares (about 45%, valued at $1,075,000) to American International Industries, which owned about 46.4%. The company says it is now a non-operating shell. The board cited the cash gain, funding American's stock buy-back, and Delta's continuing operating losses so it can explore new businesses. This reverses the February 2010 merger that made the company an operating business.
On June 29, 2011, the company (now Delta Seaboard International) agreed with Vision Opportunity Master Fund (VOMF) that VOMF would convert all 3,769,626 outstanding preferred shares into the same number of common shares and waive accrued dividends. The company pays $225,000 ($50,000 at signing, $175,000 if paid by September 30, 2011), or $250,000 if it pays at $20,000 a month instead. The company says this lifts stockholders' equity from about $2.2 million to $3.0 million (about 36%). This settles the open question of what happened to VOMF's preferred stock from 2006-2007, and it ends the preferred, though it adds common shares.
This amended filing (8-K/A, filed March 2011) re-describes the February 3, 2010 reverse merger with Delta Seaboard Well Service and attaches Delta's financials, which the filing text cuts off. The terms repeat the earlier report: American ends up with 32,859,935 shares (48.2%), Derrick and Burleigh 30,924,353 (45.4%), and all other holders 4,357,962 (6.4%) of 68,142,250. The company is to be renamed Delta Seaboard International, Inc. It adds no new deal terms. One inconsistency: Item 3.01 says 32,186,572 shares to American, while Item 2.01 gives 22,186,572 plus 10,000,000 (32,186,572 combined, against 32,859,935 total ownership).
On February 3, 2010 the company completed a reverse merger with Delta Seaboard Well Service, a Texas well-servicing business (workover, plugging and abandonment, well completion) 51% owned by parent American International Industries. After a 1-for-10 reverse split, shares will be issued to Delta's owners, giving American 32,859,935 shares (48.2%), Delta's other owners Derrick and Burleigh 30,924,353 (45.4%) and all other holders 4,357,962 (6.4%) of 68,142,250 total. The company stops being a shell, will be renamed Delta Seaboard International, Inc., and control passes to the Delta and American designees. This resolves the search for a business after the April 2009 asset sale and heavily dilutes existing minority holders. The shares remain outstanding, though diluted to 6.4%.
On April 16, 2009 the company sold all its assets, including the four operating subsidiaries (Hammonds Fuel Additives, Technical Services, Water Treatment Systems and ODV), to a new FabCorp subsidiary, Hammonds Technologies, LLC. In return FabCorp pays $2.6 million owed to Texas Community Bank, repays a $250,000 bridge note to VOMF, and assumes about $2.6 million of payables. The board cited failed efforts to raise capital, December 31, 2008 liabilities of about $7.3 million against assets about $460,000 lower (unaudited), and a view that it could not continue as a going concern. The company is left without operations and says it will look for a merger or other deal, with no counterparty identified. This ends the Hammonds business built since 2005.
On June 3, 2008 the board dismissed auditor GLO CPAs and engaged GBH CPAs for fiscal 2008, subject to shareholder approval. The filing says GLO's 2006 and 2007 reports were clean and there were no disagreements. Unlike the 2007 Braden-to-GLO change, which was a firm merger, this is a dismissal on the audit committee's recommendation.
Responding to SEC comments on the September 2006 quarterly report, the company said it restated the April 30, 2005 pro forma Hammonds acquisition statements: pro forma total assets went from $6,729,690 to $5,895,694 and equity from $812,320 to $3,094,720, with the acquisition goodwill of $3,845,815 replaced by $2,711,508 of other intangibles. It also restated the accounting for the VOMF preferred stock for Sept 30 and Dec 31, 2006 and March 31, 2007, adding a $1,290,898 deemed dividend, so the nine-month 2006 loss applicable to common shareholders went from $1,578,354 to $2,869,252. This adds to the earlier 2005 restatement and the late filings.
An amended filing (under the old name International American Technologies Inc.) re-describes the April 28, 2005 purchase of 51% of Hammonds Technical Services and the Hammonds business (water treatment, fuel injectors, Biobor JF additives, ODV utility vehicle). The visible text restates the 2005 deal terms ($1,000,000 cash, a $2,000,000 credit line, 145,000 parent shares against a $1,450,000 note); the text is cut off, so any changes to the financials are not shown. Likely linked to the SEC-prompted restatement of the 2005 pro forma figures reported the next day (inference).
On October 15, 2007 the company issued 7,142,857 restricted common shares to its parent, American International Industries, to convert a $1,000,000 note (6% interest, due April 30, 2009) at $0.14 per share. This removes that debt and increases the parent's shareholding, diluting other holders.
On September 20, 2007 the company and VOMF amended the 21,029,599 Series A, B and C warrants, cutting the exercise price from $0.18 to $0.10 and providing for 2,102,960 new Series C convertible preferred shares in place of the common shares. VOMF exercised all of them on September 21, paid net proceeds of $981,162 and cancelled the $1,000,000 August note, which resolves that loan. A press release the same day announced a larger U.S. Army contract order and "$2 Million in equity investment" (press release content not shown). The lower price and new preferred shares dilute existing holders.
On August 15, 2007 VOMF lent Hammonds Industries $1,000,000 on a short-term note due at the earliest of September 30, 2007, a proposed equity financing, or acceleration. If no financing occurred, $1,100,000 would be owed, with 15% interest on late payment. VOMF may convert the note into securities of the proposed financing. This is a new debt from the same investor that bought the 2006 preferred stock.
Amended report, now under the name Hammonds Industries, Inc.: John A. Braden & Co. merged into GLO CPAs, LLP effective January 1, 2007, and GLO, which issued the 2006 audit report, was engaged for fiscal 2007. The filing says there were no disagreements with Braden. This is a firm merger rather than a dismissal or resignation.
The company said its previously issued results for the quarters ended June 30 and September 30, 2005 should not be relied on, after errors in how the Hammonds acquisition was accounted for. Restated figures: the June 2005 quarter moved from a net profit of $125,806 to a net loss of $244,094, and the September 2005 quarter from a loss of $125,644 to a loss of $741,294. Total stockholders' equity fell from $967,933 to $598,033 at June 30, and from $719,983 to $104,333 at September 30. This follows the 2005 Hammonds purchase and the auditor turnover.
14 Aug 2006capital raising announcement● NeutralMajor
On August 10, 2006 the company agreed to sell up to 833,333 Series A convertible preferred shares at $1.80 each to Vision Opportunity Master Fund (VOMF), paying an 8% dividend, each convertible into 10 common shares, plus Series A and B warrants at $0.18 per share (each for $1,500,000 total consideration). Separately, Carl Hammonds agreed to swap his 49% stake in Hammonds Technical Services for 16,000,000 restricted common shares, making Hammonds a wholly-owned subsidiary. This will dilute existing shareholders; it completes the ownership of Hammonds begun with the 51% purchase in 2005.
Thomas Leger & Co. resigned as auditor effective June 28, 2006, only about six months after being appointed, and John A. Braden & Company, P.C. was engaged to audit fiscal 2006. The filing says Leger's 2005 report was clean and there were no disagreements. This is the second auditor change in about six months.
Auditor R. E. Bassie & Co. declined to stand for re-election effective December 28, 2005, and Thomas Leger & Co., L.L.P. was engaged to audit fiscal 2005. The filing states Bassie's 2004 and 2003 reports had no adverse opinion and there were no disagreements.
6 July 2005asset acquisition disposition● NeutralMajor
Amended report on the deal that closed April 28, 2005: the company (then named International American Technologies) bought 51% of Hammonds Technical Services, a Texas maker of fuel additives, fuel-handling equipment and water-treatment products. The price was $1,000,000 cash for working capital, a $2,000,000 secured revolving credit line, and 145,000 shares of parent American International Industries issued to the company against a $1,450,000 note, to be exchanged for two minority holdings in Hammonds that would be cancelled. Hammonds became a subsidiary. The shown text is truncated, so later sections (e.g. financial statements) are not visible.
