Each one in plain English, with the numbers worked through for a shareholder.
1 Mar 2013debt financing▼ Bad
Infinity repaid in full a $250,000 note issued August 28, 2012 on Feb 28, 2013, funded by new 8% unsecured 60-day subordinated loans of $125,000 and $150,000 taken Feb 26-27 (the filing says 2012, apparently meaning 2013, which is an inference). The new lenders got warrants for 125,000 and 150,000 shares at $2.50 for two years, rising to 1,250,000 and 1,500,000 shares at $0.10 if the notes are not repaid on time. This continues the pattern of short-term borrowing rolled over from the February 13 loan.
On February 13, 2013 Infinity borrowed $250,000 from a private lender on an 8% unsecured subordinated note due in 60 days, for the Nicaragua concessions and working capital. The lender got a warrant for 250,000 shares at $2.50 for two years; if the note is not repaid on time, the warrant grows to 2,500,000 shares at $0.10, which would heavily dilute shareholders.
On April 13, 2012 Infinity closed its deals with Amegy and Off-Shore: Amegy received 130,000 Series A Preferred shares and 2,000,000 common shares and cancelled a 968,000-share warrant, while Off-Shore received 15,016 Series B Preferred shares. This settled all debt owed to both, and the company cancelled debt, interest, fees and warrant liability totaling $21,322,922 at Dec 31, 2011. This resolves the long-running Amegy forbearance and the Off-Shore note, but common holders now rank behind preferred holders (6% dividends, convertible at $6.50) and Series A gets voting control from Jan 1, 2014 if not redeemed or converted.
On March 23, 2009 Infinity signed a deal with Off-Shore Finance, LLC for a subordinated secured note of up to $1,275,000 and sold it a 1% revenue sharing interest in the Nicaragua Tyra and Perlas concessions. The note is 6% interest, due March 23, 2012, secured by second-lien claims on substantially all domestic assets and ranking behind Amegy; proceeds are for developing the concessions, general expenses and settling concession-related claims. This looks like the subordinated loan funding that the Amegy forbearance required, though the filing does not say so. It gives up a small share of any future Nicaragua revenue.
On March 5, 2009 Infinity signed two contracts with Nicaragua for its Tyra and Perlas offshore blocks, each with a six-year exploration period split into four sub-periods and a 30-year exploitation period. It must provide a guarantee, expected initially to be a $950,000 letter of credit through Amegy, and is seeking partners to fund the substantial capital spending required. The filing also notes the company's ability to continue as a going concern as a forward-looking risk. This follows the government-approval condition in the October 2008 forbearance agreement, and the company's address has moved to Overland Park, Kansas.
Wellington Management Company, LLP reported a AMERICAN NOBLE GAS, INC. shareholding of 1,156,450 shares (6.47% of votes) in a periodic institutional filing.
On October 16, 2008 Infinity signed a Third Forbearance Agreement with Amegy covering breaches of financial covenants for March and June 2008. The borrowing base stays at $3.806 million, leaving a $6.104 million deficiency, and forbearance runs from June 1, 2008 to May 31, 2009. Ross and Hutchins had to exercise options for 350,000 and 200,000 shares, the company must raise at least $1.5 million of subordinated loans by October 31, 2008, and it must obtain Nicaraguan government approval of its Tyra and Perlas offshore concessions by December 31, 2008. This continues the Amegy forbearance and shows the company now has offshore Nicaragua concessions.
On April 30, 2008 NASDAQ rejected Infinity's compliance plan and decided to delist its common stock, with trading suspended at the open on May 9, 2008. The company does not intend to appeal. The stock may trade on another market such as the OTC Bulletin Board if a market maker applies. This resolves the bid-price and stockholders' equity deficiencies by loss of the NASDAQ listing.
On April 3, 2008 NASDAQ said Infinity's year-end 2007 stockholders' equity of $7.725 million was below the $10 million minimum and began reviewing its continued listing. The company had to submit a compliance plan by April 18, 2008, failing which NASDAQ would delist. This adds an equity-based problem to the earlier bid-price deficiency.
