Each one in plain English, with the numbers worked through for a shareholder.
18 Oct 2021bankruptcy or receivership▼ BadMajor
On October 6, 2021 Fortem filed a voluntary Chapter 11 bankruptcy petition in the US Bankruptcy Court for the District of Nevada and says it will keep operating as a debtor-in-possession. A plan of reorganization is being negotiated but not yet filed or signed, and a debtor-in-possession loan of undetermined size is expected to be sought. Creditor collection actions are automatically stayed. OTC Pink halted trading on October 7, 2021, and the filing says the stock remains suspended pending a review of continued listing on the NEX Exchange in Canada. This follows the cease trade order and the repeated Utah payment deferrals, though the filing itself does not state the cause. The filing is signed by Marc A. Bruner as CEO, replacing Michael Caetano, and the address has moved to Vancouver. What happens to existing shares is not yet determined.
On May 22, 2020 Fortem signed further amendments to the Utah purchase agreements (Black Dragon/WEM Dragon, fifth amendment; Rolling Rock/Rockies Standard Oil, sixth amendment). The remaining US$3.8M (Moenkopi) and US$5.3M (Mancos) are still payable only out of 12.5% of financing proceeds, and the payment, drilling, bond-replacement and Wellington Flats workover deadlines (plus a US$300,000 workover payment on Mancos) move from May 2020 to August 1, 2020. The attached press release says the Alberta Securities Commission cease trade order, in place almost a year, has still not been revoked, that work on the audit of the year ended February 29, 2020 has started, and lists inability to raise funds to close the purchases as a risk. This continues the pattern of repeated deadline extensions with no payments reported.
On September 19, 2019 Fortem signed a non-binding term sheet to farm out part of its Mancos interest in Grand County, Utah (held via Rolling Rock) to an unnamed arm's-length party. The party would commit up to US$15M in up to ten tranches to re-enter wells, starting with three wells, in exchange for a 100% operating interest in those wells. Fortem would get 20% of income after payout, rising to 25% after a 2.0x return. This depends on a definitive agreement not yet signed, and the press release cites the cease trade order issued against the company as a risk. It is a possible route to funding Utah work, but nothing is committed yet.
On September 16, 2019 Fortem and the seller extended closing of the Alberta heavy oil lease purchase (20,719 hectares) to on or before November 19, 2019, after the June 15, 2019 date passed without closing. The filing gives no reason and does not say whether another deposit was paid. The deal is now a year past its original November 2018 closing date and still open.
On July 11, 2019 Fortem said its financial statements from the May 2017 quarter through the November 2018 quarter, including the audited years to Feb 28, 2018, should no longer be relied on. It had wrongly reported that Colony Energy, Black Dragon, Rolling Rock and City of Gold were not 'variable interest entities', and some shares issued for fees and property purchases were valued at the private placement price rather than market value. Corrected 10-Q and 10-K filings are expected by August 9, 2019. The 10-K for the year to Feb 28, 2019 was late; the Alberta Securities Commission granted a management cease trade order on July 4, 2019 restricting trading by the CEO and CFO until it is filed. This is the larger follow-through on the 2018 non-reliance and open amended-10-Q thread, and corrected figures are still not shown.
On June 13, 2019 Fortem signed two more investor relations agreements: Atlanta Capital Partners (US$5,000 on TSXV approval plus US$3,000 in each of months two and three, and 10,000 options at $2.11 for 24 months) and AMW Public Relations (US$18,000 a month for six months, with US$54,000 up front). It also ended the Oilprice.com agreement on June 12, 2019, replacing the arrangement that drew the unauthorised article. These are marketing costs, not asset deals.
Fortem disclosed a US$220,000 one-year investor relations deal with Oilprice.com (signed April 18, 2019; US$55,000 due by June 14, then US$15,000 a month), subject to TSX Venture Exchange approval. Oilprice published a promotional article on May 20 before approval; Fortem says it learned of it May 24 and retracted it, and says no funds have been advanced. It also says the Paradox Public Relations agreement (March 2019) was terminated. The Alberta heavy oil purchase closing was extended again, to on or before June 15, 2019, for a CDN$100,000 payment credited to the price. This is the third closing date for that deal (Nov 15, 2018, Mar 15, 2019), and it has still not closed.
On May 16, 2019 Fortem signed further amendments to its two Utah purchase agreements. The remaining US$3.8M (Moenkopi, Black Dragon/WEM) and US$5.3M (Mancos, Rolling Rock/RSOC) are now payable only from financings, at 12.5% of each financing's proceeds (down from 25% under the earlier amendments), with final payment dates pushed to May 1, 2020. Drilling deadlines move to May 1, 2020 (Moenkopi) and May 31, 2020 (Mancos), and Fortem must re-enter and work over the Wellington Flats Well by May 1, 2020. Rolling Rock's interest to be acquired rises from 50% to 75%, the US$300,000 workover payment is due by May 1, 2020, bond replacement is due by July 1, 2019, and Fortem will issue 300,000 shares each to WEM and RSOC, with Fortem guaranteeing both subsidiaries' obligations. Subject to TSX Venture Exchange approval, it also plans to issue 600,000 shares to two accredited investors (purpose not stated). This continues the Utah payment-extension thread; it delays cash payments but adds shares.
On March 1, 2019 Fortem signed an investor relations agreement with Paradox Public Relations Inc.: CDN$5,000 for the first two months, then CDN$500 a month, plus 300,000 options at CDN$3.05 for 24 months, vesting quarterly over 12 months. It is subject to TSX Venture Exchange approval, and the options will be granted only after that approval. The CDN$3.05 exercise price is above the US$2.00 used in recent share sales (comparison is an inference as currencies differ).
On January 25, 2019 Fortem signed a six-month broadcast advertising contract with Nevada Radio LLC (USA Radio Networks) for US$60,000, subject to TSX Venture Exchange approval. This is a marketing expense, not an asset deal; the filing's new Calgary address (Suite 1020, 909 11th Avenue SW) is also a change from earlier filings.
On December 17, 2018 Fortem and the seller agreed to extend closing of the September 2018 Alberta heavy oil lease purchase from November 15, 2018 to on or before March 15, 2019. The filing does not give a reason or say whether any extra deposit was paid. The deal has not yet closed.
On November 5, 2018 Fortem issued 300,000 shares to Robert Da Cunha, its Chief Financial Officer, on exercise of options at US$0.10, raising US$30,000. This confirms Da Cunha's role as CFO, which was unconfirmed before.
On October 16, 2018 Fortem issued 1,000,000 shares at a deemed US$2.00 to Grassy Butte, LLC as the second tranche of 4,000,000 shares for the Colony Energy purchase (the 16.7% membership interest). This is one of the deferred Godin share payments already owed, so it adds shares without bringing in cash.
