Each one in plain English, with the numbers worked through for a shareholder.
3 Jan 2014asset acquisition disposition● Neutral
Daleco closed a partial sale of undeveloped oil and gas deep leasehold rights in Burleson County, Texas on December 17, 2013, selling 280 net acres and receiving $488,038, which it will book as a gain and use for general working capital. The sale agreement was dated October 6, 2013 (effective September 30, 2013), and closing was delayed several times over title issues raised by the buyer. A second amendment extends the closing date to January 16, 2014 for the remaining properties, so part of the sale is still unfinished. This follows the March 2012 sale of other undeveloped leasehold rights. The buyer is not named and has no material relationship with Daleco. The rights sold produced no income.
On August 28, 2013 Daleco settled all obligations with Stephan V. Benediktson, a former officer, by issuing him 2,169,400 new shares and releasing 1,000,000 shares held in escrow as collateral for his note to the company. This wipes out $915,887 of accrued bonus owed to him, $37,448 owed by him, and a note receivable of $444,559 (principal and interest) that had already been impaired. Daleco recognises no gain or loss. The new shares dilute other holders.
Daleco's board and Audit Committee engaged Mayer Hoffman McCann P.C. as its new independent auditor on May 6, 2013, replacing Vasquez & Company, after talking with several candidate firms.
Daleco's Audit Committee dismissed Vasquez & Company LLP, its auditor since December 2004, on May 6, 2013. Vasquez's reports for fiscal 2012 and 2011 had no adverse opinion but included a going-concern modification, and the filing reports no disagreements with the firm. Vasquez's letter agreeing with the disclosure is filed.
27 Mar 2013capital raising announcement● NeutralMajor
On March 25, 2013 Daleco agreed to sell 15,000,000 shares for $1,500,000 plus a five-year warrant for up to 18,000,000 shares at $0.20 to Far East Investments LLC and DTE Investment Ltd. Far East also becomes exclusive sales and marketing agent for Daleco's natural resource products in Asia (excluding India and excluding ZeoSure products). As a condition, major creditors agreed to hold off demanding payment for two years, with accelerated payment if Daleco gets revenues or investments above stated amounts or an event of default goes uncured; $350,000 of proceeds pays past-due amounts to certain debt holders. While the investors hold 51% or more of the shares bought, they can ask Daleco to nominate two directors. The deal significantly dilutes existing shareholders.
The leasehold sale agreed in January 2012 closed on March 28, 2012 (later than the February 15 date first set), and Daleco received $898,355, which it will record as a gain. The leases sold were undeveloped and not producing income. Proceeds go to general working capital. The filing says the buyer has no material relationship with Daleco, and notes about $25 million of tax loss carryforwards at September 30, 2011.
On January 20, 2012 Daleco agreed to sell certain oil and gas leasehold rights for $898,355 cash, with the price subject to adjustment for uncured title defects. Closing is set for February 15, 2012 or another agreed date. The buyer is not named and no exhibit is filed because of a confidentiality clause.
Daleco received a notice from FINRA on January 20, 2012 that it is late filing its annual report for the year ended September 30, 2011, and an 'E' was added to its ticker on January 18. Unless the report is filed by 5:30 p.m. EST on February 16, 2012, its shares will be removed from the OTC Bulletin Board. Daleco says it intends to file by then. This continues its history of late filings.
On February 25, 2011 Daleco hired The Musser Group, a four-principal advisory firm, under an agreement running to February 24, 2013. It is paid only in stock, totalling 2,400,000 shares, plus pre-approved out-of-pocket costs. Daleco also issued warrants for 2,500,000 shares at $0.15, exercisable to February 24, 2016 but only once the stock's average bid/ask price has been above $1.00 for 30 consecutive trading days. The scope covers managed services, strategic planning and help carrying out board-approved strategies; the press release says the aim is to commercialise its mineral holdings. The new shares and warrants would dilute existing holders.
Daleco's board extended the September 2005 placement warrants a second time: participation warrants now expire September 16, 2007 (previously December 31, 2006) and contingent warrants September 16, 2008 (previously December 31, 2007). It also extended a warrant held by Terra Silex Holdings Ltd to September 16, 2007. Other terms are unchanged; the filing does not say how many shares the warrants cover.
15 Sept 2006security holder rights change● Neutral
Daleco's board pushed back the expiry of the participation warrants from the September 2005 $1,625,000 private placement, from September 16, 2006 to December 31, 2006, and the contingent warrants from September 16, 2007 to December 31, 2007. All other terms are unchanged. Holders get more time to exercise.
Daleco signed an agreement on May 23, 2006 to buy 119 producing wells and oil and gas leases covering about 17,000 acres in Athens, Morgan, Center and Washington Counties, Ohio. It also gets a gas gathering system, a saltwater disposal facility, two drilling rigs, two well servicing rigs and support equipment. Closing is due within 60 days, or later if due diligence needs more time. The filing states no price, and the schedules are still to be filed.
Daleco restated its filing of December 6, 2005, confirming it will restate its March 31 and June 30, 2005 quarterly reports and that investors should no longer rely on the originals. The issue is how it accounted for the stock and warrants received in the sale of its I-Squared and I-Top software to PSNet (later Ostara/Rheologics): it had carried them at cost, but after an SEC comment letter it will now account for them at fair value from January 13, 2005. The effects are non-cash: the March quarter shows available-for-sale securities up $3,092,973 and net income up $40,402, and the June quarter shows securities down $3,125,411 with no change in net income. Daleco still says its disclosure controls are effective.
Daleco agreed with the SEC staff to restate its quarterly reports for March 31 and June 30, 2005 because of how it presented the sale of software programs to Rheologics Technologies (formerly Ostara). Investors should not rely on the old figures once restated reports are filed, due by December 12, 2005. Daleco says it and its auditors believed the original presentation was proper.
Daleco closed a private placement on September 21, 2005 of 6,500,000 common shares at $.25, raising $1,625,000 gross, with warrants attached; it was sold by officers and directors with no commissions. The money is to retire its Class A Preferred Stock (tied to the Kane litigation) and for general working capital, and the new shares dilute existing holders.
What it means for a shareholder
6.5m new shares at $0.250 to raise about $1.6m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
Daleco's subsidiary C.A. Properties signed the formal Operating License for Sierra Kaolin with Tecumseh Industrial Minerals, LLC (TIML), following through on the November 2004 Memorandum of Understanding. Terms: three-year primary term and continuing while TIML produces commercially, profits 65% TIML and 35% Daleco, TIML pays first-year costs. The counterparty is named TIML rather than TPA, as in the earlier memorandum.
Daleco signed a market and product development agreement with EEC North America, Organica Biotech and Enviro/Sci Corporation, approved by its board on February 24, 2005. The parties will share intellectual property under non-disclosure agreements extended to February 21, 2010 and explore a bundled product approach; the filing states no payments or financial terms.
Daleco's subsidiary C.A. Properties signed an agreement with Tecumseh Professional Associates to run and market its calcium carbonate interests in Cibola County, New Mexico, similar to the Sierra Kaolin deal. Profits split 65% TPA and 35% Daleco (the first $200,000 split 50/50), and TPA pays all first-year costs; the term is three years and continues as long as TPA produces commercial quantities.
This amendment adds detail to the September 2004 auditor departure: Shapiro had audited through the fiscal 2003 report, had been confirmed by shareholders for fiscal 2004, and resigned on his own. It also states his audit reports for the past two years included going-concern uncertainty statements, and that there were no unresolved disagreements.
Daleco and its subsidiary Clean Age Minerals signed a non-binding-style Memorandum of Understanding with Tecumseh Professional Associates (TPA) to run and market its Sierra Kaolin property in Sierra County, New Mexico. Profits would split 65% TPA and 35% Daleco, TPA would pay all first-year costs, TPA could get warrants for up to 1,500,000 shares at $.50, and TPA could buy the property at fair market value in the first year of each term, though Daleco need not sell.
Daleco's Audit Committee picked Vasquez & Company, LLP as its new auditor, replacing Jay J. Shapiro who stepped down in September 2004; the firm had never audited Daleco before. The company says it expects to file its annual report on Form 10-KSB on time.
Daleco and Sumitomo Corporation of America (the holder of a 4.39% stake disclosed in 2001) amended their November 2001 marketing agreement on September 14, 2004. Sumitomo's exclusive marketing and buyout rights were removed, the agreement now runs to June 30, 2005 unless both sides agree to renew, and Sumitomo's warrants for 2,240,000 shares ($2.00 to $3.00) were cancelled. Daleco says this removes a potential anti-takeover provision and gives it more freedom to market its mineral and timber products.
Auditor Jay J. Shapiro, CPA told Daleco on September 13, 2004 that he is ending all public-company audit work, citing the cost of public accounting and Sarbanes-Oxley compliance; he reports no disagreements with Daleco. The Audit Committee is looking for a new auditor for the year ending September 30, 2004.
Daleco changed its legal home from Delaware to Nevada by merging into Daleco Resources Corporation of Nevada, effective March 26, 2002, after shareholders approved it on February 28, 2002. The company kept its name and September 30 fiscal year-end, and the same directors (chaired by Dov Amir) and officers carry over.
