Each one in plain English, with the numbers worked through for a shareholder.
2 Jan 2019capital raising announcement▼ Bad
On December 19, 2018 the company issued a $58,300 convertible note (funded December 21 for net $53,000, after a $5,300 original issue discount) at 10% interest, due September 19, 2019. After 180 days the lender can convert at 60% of the lowest recent trading price (a 40% discount), so conversions could dilute shareholders. Proceeds are for general corporate and working capital purposes. This is another small financing in the series since November 2018.
On December 6, 2018 the company agreed to a convertible note of up to $136,500, funded in three tranches; the first tranche of $45,500 closed December 7 for net proceeds of $41,500. Interest is 12%, each tranche matures 12 months after funding, and after 180 days the lender can convert at 50% of the lowest recent trading price. Each funded tranche also carries warrants for up to 227,500 shares at $0.20 over 5 years. Only the first tranche is funded, and the filing says there is no assurance the others will be. This is another small, heavily dilutive financing following the November 2018 note.
On November 1, 2018 the company issued a $380,000 convertible note (10% original issue discount, 12% interest, due May 1, 2019) for $342,000 of proceeds, plus 650,000 restricted shares and two 5-year warrant tranches (687,500 and 2,062,500 shares) at $0.20. The lender can convert at 50% of the lowest recent trading price, and the filing itself warns shareholders could be materially diluted and a change in control could occur. Proceeds are to retire certain loan obligations currently due, plus working capital. Separately, a subsidiary signed a letter of intent to buy producing natural gas properties in Wyoming (about 18,000 gross acres, mostly stripper gas production), subject to due diligence, definitive agreements and financing; no price is given. The company's address has moved to Los Angeles from Denver. The terms are much harsher than the 2017 notes (conversion at $0.665 and warrants at $1.00), a point the filing's own figures support.
The company borrowed on a $267,500 senior convertible note from an unaffiliated investor (named in the press release as FirstFire Global Opportunities Fund), receiving about $250,000 before costs. The note carries 8% interest and is due August 17, 2018, and the lender can convert it to shares at $0.665. The company also issued 60,000 restricted shares and warrants for 267,500 shares at $1.00 (18 months). Executive Chairman Sylla guaranteed the note, as he did the September 2017 $250,000 note. The company can avoid conversion by repaying 115% of principal within six months. The proceeds are for general corporate and working capital purposes. This continues the pattern of small financings with dilutive terms. The press release also says the company is working with a placement agent on a reserve-based financing and exploring options with its Hong Kong stakeholders; these are intentions, with no agreement stated.
On September 29, 2017 the company issued a $250,000 note to an unaffiliated investor, due January 2, 2018 (interest-free if paid on time, 15% afterward), along with warrants for 375,000 shares at $0.665 (to 2019), 375,000 at $1.25 and 185,000 at $2.00 (both to 2020). Executive Chairman Kevin Sylla personally guaranteed the note. Because of price-protection terms in earlier unit sales, it will also issue 136,015 shares and matching warrants to earlier investors (100,752 to Wilshire), with warrant prices reset to $0.665, which dilutes existing holders. The proceeds are for general operating purposes.
This is Amendment No. 2 to the original May 27, 2016 report on the Key Link / Foothills Petroleum share exchange. It restates the earlier facts (6,003,759 shares to Wilshire and Alternus, about 8,363,759 shares outstanding, 700,000 Wilshire warrants, ~$1,000,000 of 8% Alternus notes, 38,120-acre Springs Prospect) and business description. The visible text shows no new transaction, and the reason for the amendment is not shown in the excerpt.
On May 11, 2017 the company signed a purchase agreement with an undisclosed seller for Utah and Colorado assets: 67,330 gross acres (49,600 net), 85 wells (31 producing, 54 shut-in), of which it would operate 66. It expects to close by June 30, 2017 and says it would bring total Rockies acreage above 100,000 acres. The filing gives no price or financing details, and closing is subject to conditions with no assurance it will happen.
The company said it reworked two wells in the Duck Creek project (acquired with Tiger Energy Partners International on December 30, 2016) and sold 560 barrels of oil in January 2017. It plans to rework two more shut-in wells over the next 60 days and expects February production to at least match January. This is the first reported oil sales, following the Utah acquisition; the volume is small and the forecasts are management's expectations.
The company borrowed $1,000,000 from Full Wealth Investment Hong Kong (January 5, 2017) and $1,250,000 from Berwin Trading (January 6, 2017) on unsecured debentures at 9% interest, each due in 120 days (11% if overdue). Proceeds are meant for obligations under the Total Belief purchase, working capital and target drilling. This is the financing the Total Belief deal required, adds $2,250,000 of short-term debt, and Berwin is the same investor that bought shares in 2016.
On December 30, 2016 the company (through a subsidiary) bought Utah and related interests from Total Belief Limited, a subsidiary of Hong Kong-listed New Times Energy, for $10,750,000: $75,000 cash at closing, $675,000 cash within 10 business days, 2,083,334 restricted shares valued at $4,000,000 ($1.92 each), and a $6,000,000 no-interest note due in 18 months. It gets an entry into the Uinta Basin, six shut-in Natural Buttes wells it plans to rework, a 55.63% stake in Grey Hawk Exploration (non-operated interest in two producing wells), and the remaining 25% of Tiger Energy Partners International from Green Stone. The press release says the deal also lifts its Ladysmith interest from 35% to up to 75% and that it must raise at least $2,250,000 within 10 business days of closing, with only non-binding assurances of funding. This is the company's first producing-type asset after being pre-revenue, and it adds new shares and a large debt; a related party (Kevin Sylla, tied to principal holder Wilshire) introduced the deal.
