Each one in plain English, with the numbers worked through for a shareholder.
27 Oct 2011financial restatement▼ BadMajor
On Oct 17, 2011 management concluded that fiscal 2010 financing and equity transactions needed restating for non-cash changes in the value of warrant and derivative liabilities, so the June, September and December 2010 quarterly reports should not be relied on; amended reports are to follow. The press release reports fiscal 2011 (to March 31) oil sales of $1,103,227 against $124,815, and a net loss of $14,662,555 against a restated $12,176,826, with non-cash warrant and derivative charges of $8,731,562 (2011) and $6,931,936 (2010). It says production was 40-50 net barrels a day, that it expects to raise more capital, and that the office has moved to Houston. This is another restatement in a long series.
12 July 2011capital raising announcement● NeutralMajor
Under agreements dated June 24, June 28 and July 4, 2011, the company sold 4,292,990 common shares to non-U.S. investors for about $1,931,810 (about $0.45 a share), plus two-year warrants for the same number of shares at $0.45. A further 373,430 shares went to ABG Sundal Collier as an advisor fee. This adds to the share count after the January 2011 raise.
On June 20, 2011 the audit committee ended the engagement of auditor Jonathon P. Reuben CPA and appointed BDO USA, LLP. Reuben's reports for fiscal 2010 and 2009 included going-concern doubt, and the company reports no disagreements or reportable events. The filing gives no reason for the change.
On March 18, 2011 the company agreed that Point Capital Partners would take over its accounting and administrative functions, including cash management, bill paying and financial reporting. Either side can end it on 45 days' notice, and it is to be reviewed in 90 days. No fee is stated.
25 Jan 2011capital raising announcement● NeutralMajor
On Jan 21, 2011 the company sold 7,000 Series D convertible preferred shares to non-U.S. investors for $2.1 million, with two series of warrants (7,000,000 shares at $0.40 and 7,000,000 at $0.60) and a fee package to ABG Sundal Collier. The preferred converts into 7,280,000 common shares once authorized common stock is raised to at least 125 million, from the 20 million currently authorized; this is significant dilution. Because of the sale, the warrants held by the March 2010 Iroquois convertible note investors reset to 23,333,334 shares at $0.30, and Iroquois waived defaults tied to the 20 million share limit. The press release says the company produced an average of 85 barrels a day in late 2010 from about 30 reworked wells and plans up to 10 delineation wells. The company now trades on the OTC bulletin board and is based in Katy, Texas.
On Jan 7, 2010 Nasdaq told the company its bid price was below the listing minimum and its shares would be delisted on Jan 18, 2010 unless it asks for a hearing, which it intends to do. Nasdaq noted that panels have generally seen a reverse stock split within 30-60 days as the only acceptable plan, though a panel can allow up to 180 days. This escalates the bid price deficiency open since 2008; if delisted, the stock could not be quoted on the OTC Bulletin Board or Pink Sheets until a market maker files and clears a Form 211.
This is a second copy of the same Jan 5, 2010 8-K: Nasdaq's Dec 31, 2009 notice about an unpaid $5,000 fee, paid and closed on Jan 4, 2010. It adds no new information.
Nasdaq told the company on Dec 31, 2009 that it had broken a listing rule by not paying a $5,000 fee; the company paid and Nasdaq closed the matter on Jan 4, 2010. The company says Nasdaq's emails were going to mistyped addresses, so it had not received them on time. This is a minor, resolved matter, separate from the open audit committee and bid price deficiencies.
On Oct 8, 2009 Nasdaq said the company no longer meets the three-member audit committee rule after director Franz Skyranz resigned (reported Aug 26, 2009). It has until the earlier of its next shareholder meeting or Aug 25, 2010 (or Feb 21, 2010 if the meeting is held by then) to fix this, or face a delisting notice it can appeal.
On Aug 11, 2009 the company received $250,000 from Dr. Howard Berg in return for a three-month senior secured note at 1.5% per month, plus warrants for 250,000 shares at $0.33 (expiring Jan 30, 2011) and 250,000 shares at $0.67 (expiring July 30, 2012). The note is secured by company assets, and the warrants could dilute shareholders.
This is an amended 8-K on a financial restatement (Item 4.02), but no text came through, so the content and any figures cannot be stated. It likely relates to the February 2009 restatement (inference).
In its December 31, 2008 quarterly report the company restated the six months to Sept 30, 2008 because some lease operating costs should have been capitalized. The six-month loss shrank from $1,532,131 to $1,372,317 and equity rose from $3,396,858 to $3,556,672.
The company fired Hein & Associates on Sept 25, 2008 and hired Jonathon P. Reuben CPA for the year ending March 31, 2009; Hein reported a material weakness in internal controls and no disagreements. It also swapped former CEO C. Scott Wilson's 500,000 options for 62,500 restricted shares with mutual releases. Nasdaq separately gave a new 180-day period on the $1.00 bid price rule; the filing's stated deadline of 'March 23, 2008' appears to be a typo for 2009 (inference).
With its June 30, 2008 quarterly report, the company restated the quarter ended June 30, 2007, moving a gain on related-party debt forgiveness into equity. Net result for that quarter changed from income of $118,866 to a loss of $195,006; total equity was unchanged at $1,018,460.
The company (now Glen Rose Petroleum, Delaware) agreed on July 23, 2008 to sell WHL Energy of Australia a 50% interest in 2,560 acres of its Wardlaw Field (Edwards County) for $2.5 million, with options on two more 2,560-acre phases for $3.0 million and $4.0 million. This is the financing partner sought for the Edwards County project. The company keeps a 50% carried interest in amounts WHL advances. It also ended its Chadbourn Securities placement agreement with mutual releases and 25,000 restricted shares to Chadbourn. A press release notes Hein's going-concern opinion on the March 31, 2008 10-K.
Auditor Weaver & Tidwell resigned on Feb 25, 2008, and on March 28 the audit committee engaged Hein & Associates to audit the year ending March 31, 2008. Weaver & Tidwell's report on the year to March 31, 2007 included a going-concern warning and the company disclosed a material weakness in internal controls; no disagreements were reported.
On March 11, 2008 the company sold $300,000 of common stock to majority shareholder Blackwood Ventures at $0.53 per share, the closing price that day. This is new cash for the company and adds to Blackwood's stake, diluting other holders.
On Jan 31, 2008 Nasdaq told the company its share price had closed below the $1.00 minimum for 30 straight business days, giving it until July 29, 2008 to get back above it. If it cannot, it may get a further 180 days if it meets other listing criteria, otherwise delisting. This adds to the listing problems already open from the Dec 2007 hearing process; this filing does not mention that earlier hearing's outcome.
The company agreed on Dec 19, 2007 to pay its law firm Richardson & Patel $237,485.16 of unpaid legal fees with 296,856 shares plus a seven-year warrant for 222,642 shares at $1.40. It also agreed to cancel $39,000 owed to majority shareholder Blackwood Ventures for 48,750 shares and a warrant for 36,563 shares at $1.40. The shares are to be issued after an information statement is filed (due by Jan 11, 2008) and a waiting period passes, so existing holders face dilution once issued.
After the company filed a plan in August 2007 and received an extension, its Sept 30, 2007 quarterly report (shareholders' equity of $2,254,444) still showed non-compliance, and Nasdaq said on Nov 30 that trading would be suspended Dec 11, 2007 unless appealed. The company appealed, with a hearing set for Jan 17, 2008. It cites a $600,000 placement of stock and warrants (announced Nov 29, 2007) and says it hired two Calgary professionals and aims to line up financing for Phase 1 of its Edwards County pilot, hoping this satisfies Nasdaq. The filing is signed by Joseph F. Langston as Interim CEO and gives a new address (1310 West Wall, Midland), which shows leadership and office changes from the context.
Nasdaq notified the company on July 19, 2007 that it fails the Capital Market equity/market value/net income requirement ($2.5M equity, or $35M market value, or $500,000 net income). It had until Aug 3, 2007 to submit a compliance plan and said it did not yet have one and was not certain it would. This adds a second listing deficiency to the June bid-price notice.
Nasdaq told the company on June 15, 2007 that its stock closed below $1.00 for 30 consecutive business days; it has until Dec 12, 2007 to regain compliance, with a possible further 180 days or delisting. Separately, the filing says Lothian, the largest shareholder that funded operations, filed for Chapter 11 on June 13, 2007, and the company does not know what effect this will have on its operations. This is a new listing issue and the failure of the funder behind the Lothian merger thread.
The filing explains that Lothian's Cato Loan (raised from $4M to $8M, $6,554,000 drawn) was cut to $2,156,000 principal after $4,398,000 of sale proceeds were applied. On June 6, 2007 the company and UHC New Mexico agreed to hand the Cano shares to Lothian as full and final payment of the loan, which stood at $2,009,917 principal plus $434,111 interest, with Cano shares closing at $5.27. This ends the Cato loan and uses up the Cano shares from the New Mexico sale.
On March 30, 2007 UHC New Mexico sold all its assets (the Permian Basin leases, including the Cato San Andres Unit area) to a Cano Petroleum subsidiary for $7 million cash and 404,204 restricted Cano shares, with $800,000 of the cash held back for 120 days. About $4.4 million went to Sterling Bank, curing the Jan 31 default; the press release says the company and UHC New Mexico were released from the Sterling loan. The rest went against the Lothian Cato loan, with the Cano shares pledged for the balance. Pro forma Dec 31, 2006 figures show total assets of $9.3 million, shareholders' equity of $5.4 million, and unproved oil and gas properties of $5.8 million. This resolves the Sterling default thread and removes the New Mexico leases that were the company's main assets in the context.
The Sterling Bank forbearance expired with Lothian out of compliance, and the borrowers missed a $1,500,000 payment due Jan 31, 2007, which the bank declared an Event of Default (Feb 5, 2007 letter, also sent to guarantors UHC Petroleum Services and UHC Petroleum Corp). If accelerated, about $4,600,000 would be owed, excluding a $500,000 letter of credit, late fees and default interest; the company is negotiating a limited waiver to Feb 15, 2007 but no deal exists. The company says its board never approved the Jan 12 Second Amendment (the bank says it is enforceable), and that Lothian, which has funded operations since Nov 2005, may no longer be able to do so. This worsens the Nov 2006 forbearance thread.
Director Larry W. Wilton resigned, leaving the audit committee with two independent directors instead of the three Nasdaq requires. Nasdaq gave a cure period running until July 18, 2007 (because the annual meeting is set for Feb 20, 2007), and the company says it will start a search for a qualifying director. This reduces the three-member independent audit committee noted in the context.
UHC New Mexico, the company's subsidiary, signed an Agreed Compliance Order with the New Mexico Oil Conservation Division (signed by the OCD Dec 4, 2006; effective Sept 1, 2006), replacing the Dec 7, 2005 order. It must bring at least 220 inactive wells into compliance (restore to production, plug, or approved temporary abandonment), with at least 40 by March 15, 2007 and at least 36 per six-month extension after that. Missing the quota triggers a penalty of $1,000 per well not brought into compliance, and plugged-well sites must be remediated (penalty of $1,000 per full month out of compliance).
On November 10, 2006 Sterling Bank agreed not to act on defaults under the $20,000,000 credit agreement: Lothian missed the current ratio covenant at September 30, 2006 and was late with financial statements for periods ended March 31 and June 30, 2006. The bank waived the late-statements default, agreed to forbear on the ratio breach, and gave Lothian until December 1, 2006 for its September quarter statements. The bank could have demanded full repayment but did not; the facility is secured by company subsidiary assets, so this matters to the company's shareholders. The filing says no more about the ratio breach beyond the forbearance.
The company filed an S-4 registration/information statement for the Lothian merger, reflecting the Sept 21 terms (0.80 share per Lothian share; $3.00 warrants for holders of record April 26, 2006). It also describes approved actions: reincorporation in Delaware, a possible one-for-two reverse split if the board deems it necessary, and a 2006 equity incentive plan. Shareholders are told their vote is not needed because majority holders already consented. The stock closed at $2.65 on Sept 28, 2006. This continues the pending merger and adds the Delaware and reverse-split steps.
