Each one in plain English, with the numbers worked through for a shareholder.
14 Oct 2022capital raising announcement▼ Bad
On October 10, 2022 GulfSlope signed an agreement to sell up to $650,000 of 8% convertible notes, of which only $55,000 was bought at signing; further tranches need later agreement. The note matures April 8, 2023 and, from six months after issue, converts at 65% of the lowest 10-day trading average price. This is small new funding on terms that could produce many new shares if the share price is low (inference). The filing does not say what the money is for.
On September 30, 2020 GulfSlope paid Delek GOM Investments $1,220,548 in cash to settle the debenture issued in October 2019, plus 17,500,000 shares in place of $129,211 of unpaid interest. This clears the Delek debenture ahead of its October 17, 2020 maturity and resolves the October 2019 debt thread. It costs some dilution through the new shares.
On July 27, 2020 GulfSlope settled its well-control insurance claim for the May 2019 re-drilling of a Tau well, receiving $6,575,000 for its 25% working interest. It also agreed with YA II to pay off the remaining $1,900,000 of the 2019 debentures with $50,000 at signing, $700,000 by August 21, $750,000 by September 30 and the balance by November 30, 2020, after which interest and fees are extinguished. YA II's warrants for 50,000,000 shares were repriced from $0.04 to $0.02 in exchange for removing anti-dilution provisions. The company plans to use part of the insurance money for the debenture payments.
On November 1, 2019 GulfSlope dismissed its auditor BDO USA and engaged Pannell Kerr Forster of Texas for the fiscal year ending September 30, 2019. The filing reports no disagreements with BDO. It notes material weaknesses in internal controls (contract review as of September 2018, and valuation of accounts receivable as of March and June 2019) and going-concern doubt in BDO's 2017 and 2018 reports. The receivables weakness fits with the September 2019 restatement (inference).
On October 22, 2019 GulfSlope and Delek GOM Investments signed a post-drilling agreement: GulfSlope issues 38,423,221 shares to Delek as compensation tied to insurance proceeds from drilling the Tau well, and replaces its $1,220,548 owed under the March 2019 term loan with a 12% convertible debenture due October 22, 2020, convertible at $0.05 into up to 24,410,960 shares. The term loan is terminated and Delek's liens are released except those attributable to the Tau well. This closes out the March 2019 Delek loan and adds more shares and a new debt owed to Delek.
On September 24, 2019 the company said its results for the quarter ended March 31, 2019 should not be relied on because bad debt expense was recorded in error. The correction is expected to be $672,500, which would lower the reported net loss and raise assets and equity by that amount (preliminary), and a corrected 10-Q/A will follow. This changes the $5.3 million quarterly loss reported in May 2019 and the company is assessing fixes to its accounting controls.
On July 24, 2019 GulfSlope and YA II PN, Ltd. agreed a letter removing the 'Coverage Failure' provisions of the June 2019 debenture purchase agreement as they apply to the third closing. The filing does not explain what those provisions were or why the change was made.
27 June 2019capital raising announcement▼ BadMajor
On June 21, 2019 GulfSlope agreed to sell up to $3.0 million of 8% convertible debentures, with $2.1 million bought at signing and $400,000 and $500,000 more tied to filing and SEC effectiveness of a resale registration statement. The debenture matures June 21, 2020 and converts at the lower of $0.05 or 80% of the lowest 10-day trading average price, and the buyer also got warrants for 50.0 million shares at $0.04. The buyer is not named in this filing. The variable conversion price means the number of new shares depends on the future share price (inference: it could dilute existing holders). This is new funding after the March 2019 Delek loan was converted to shares.
On March 25, 2019 GulfSlope signed a registration rights agreement with Delek GOM, as promised in the March 2019 term loan, under which it must register Delek's shares and warrants for resale if asked. The filing deadline is 30 days after a written request from Delek, and the agreement also gives Delek piggyback and underwritten-offering rights. It gives Delek a route to sell its holdings, but the filing does not say whether it will.
7 Mar 2019capital raising announcement● NeutralMajor
On March 1, 2019 GulfSlope entered a Delek GOM term loan facility of up to $11.0 million at 5% interest, due six months after closing and secured by substantially all its assets, and had borrowed $10.0 million by March 6. Delek was issued warrants for 238,095,238 shares at $0.042, and by March 6 it exercised them in full by cancelling the company's outstanding debt to it, so the $10.0 million was converted into shares rather than repaid in cash. CEO Seitz agreed to subordinate his loans to Delek's. This deepens the Delek relationship from the 2018 farm-out and adds a large number of new shares for existing holders.
12 Jan 2018capital raising announcement▲ GoodMajor
On January 8, 2018 GulfSlope signed a participation agreement with Delek GOM Investments and Texas South to farm out its Gulf of Mexico prospects: the parties commit to drill the Canoe and Tau prospects, and Delek can take part in further drilling phases, earning a 75% working interest by paying 90% of well costs while GulfSlope keeps 20% and pays 8%. Delek also pays about $1.1 million per exploration plan filed (the press release says $1.5 million, split 73% GulfSlope and 27% Texas South) and can buy up to 20% of GulfSlope's stock; GulfSlope issued 80 million shares to Hi-View for consulting, to be returned if Delek does not fund the roughly $1.1 million payment within six months. This follows the 2015 Texas South farm-out and brings in a large new partner for drilling, expected from mid-2018.
GulfSlope's auditor Mantyla McReynolds merged into BDO USA on July 1, 2016 and told the company it would not stand for reappointment; BDO was appointed on July 20, 2016 for the year ending September 30, 2016. Mantyla's reports for fiscal 2014 and 2015 contained a going-concern doubt, and the filing reports no disagreements with Mantyla.
On September 16, 2015 GulfSlope completed its March 2014 farm-out with Texas South Energy: Texas South paid the final $1.8 million of the $10 million total and now holds a 20% working interest in five prospects. GulfSlope stays operator, and Texas South pays its share of the net annual rentals. This resolves the Texas South funding thread from 2014.
On August 13, 2015 CEO Seitz lent the company a further $90,000, bringing his loans during July and August 2015 to $250,000. The notes are non-convertible demand notes, substantially like his earlier ones, so he can ask for repayment at any time. This continues the related-party funding thread.
On June 30, 2015 GulfSlope borrowed another $1,000,000 from CEO and Chairman John Seitz on a promissory note with the same terms as his earlier notes, except without the convertible feature. This continues the pattern of funding the company through related-party loans from Seitz.
25 July 2014capital raising announcement▲ GoodMajor
On July 22, 2014 GulfSlope sold 33,448,335 new shares at $0.24 each to 43 accredited investors for gross proceeds of $8,027,600, paying placement agents $388,000. The new shares add to the share count, and the company must file to register them for resale within 30 days; late filing costs it up to 5% of the purchase price in penalties.
What it means for a shareholder
33.4m new shares at US$0.240 to raise about US$8.0m. That's 5.1% dilution: every existing holder's slice gets 5.1% smaller. If you held US$1,000 of shares (4,167 at the issue price), your slice goes from 0.000666% to 0.000632% of the company. To keep it you'd need 223 more shares - about US$54 at the issue price.
19 June 2014asset acquisition disposition▲ GoodMajor
On June 17, 2014 GulfSlope completed the last two awarded leases from the March 2014 sale (Vermilion South Addition 375 and South Marsh Island South Addition 187) for $964,359, with $70,000 in annual rent, 10,000 acres, expiring June 2019. The government regulator (BOEM) rejected its bid on Ship Shoal Block 282, so the company now holds all 21 blocks it was awarded; this resolves the open thread about completing the remaining sale blocks. A press release says the company controls 98,941 acres and expects to begin exploration drilling in 2015, and its own internal estimate is about 2 billion barrels of oil equivalent (speculative, not reserves).
On June 13, 2014 the company borrowed $1,160,000 from John Seitz, its CEO and board chairman, through a promissory note. The note has the same terms as his earlier notes except that it has no convertible feature. This is a related-party loan, and the filing does not state the interest rate or due date.
16 June 2014asset acquisition disposition▲ GoodMajor
On June 16, 2014 GulfSlope completed leases on nine more blocks from the March 2014 sale for $3,108,514, with $331,165 in annual rentals, 40,731 acres, expiring June 2019. It has now completed 19 of the 22 blocks it was apparent high bidder on.
10 June 2014asset acquisition disposition▲ GoodMajor
On June 6, 2014 GulfSlope completed leases on six more blocks from the March 2014 sale (Ship Shoal South Addition 328 and 336 and Ewing Bank 870, 904, 914, 948) for $1,843,330, with $266,590 in annual rentals, 28,210 acres, expiring June 2019. That makes 10 of the 22 blocks it was apparent high bidder on. It was also awarded two more blocks (Vermilion South Addition 375 and South Marsh Island South Addition 187), to be completed by June 20, bringing awards to 21 of 22.
GulfSlope completed another lease, Ship Shoal South Addition Block 348, on May 27, 2014 for $159,409, with $35,000 annual rent, 5,000 acres, expiring June 2019. It also said it was notified on May 22 of awards on six more blocks (33,210 acres) and intends to complete them by June 10, 2014; those are not yet finalised.
14 May 2014asset acquisition disposition▲ GoodMajor
After the federal ocean energy regulator (BOEM) awarded it leases, GulfSlope completed three Gulf of Mexico leases in May 2014 (Eugene Island South Addition 371, Ship Shoal South Addition 335, Grand Isle South Addition 103). The three together cost $1,119,910, with annual rentals of $105,000, cover 15,000 acres and expire in May 2019. This is the first lease ownership after the earlier cost write-off, which was tied to not yet owning properties. It also agreed to buy $3 million of seismic reprocessing before May 2015, $1.5 million in cash and the rest in 2 million shares, and a registration for resale of 63,240,335 shares became effective.
On March 10, 2014 the company signed a farm-out letter agreement with Texas South Energy: Texas South can acquire up to a 20% working interest in five prospects for up to $10 million, payable by April 11, 2014, and shares rental costs. GulfSlope must refund all or part if it cannot obtain the leases and cannot substitute similar prospects, and stays as operator. Director James Askew (8.8% holder) is CEO and a 10%+ holder of Texas South, so this is a related-party deal.
The company said its earlier quarterly results for March and June 2013 should no longer be relied on. Previously capitalised seismic-related costs were written off as impairments of $12,582,927 for the March quarter and $14,542,055 for the nine months to June 30, 2013, increasing the reported net loss by the same amounts. The filing says the cost was reclassified because the company did not yet own the properties the costs related to; it is an accounting correction, not a statement about cash.
Now named GulfSlope Energy and incorporated in Delaware, the company held an initial closing of a new private placement on June 1, 2012, issuing 16,500,000 shares at $0.01 for gross proceeds of $165,000, for general corporate purposes. More shares in issue dilutes existing holders; the filing calls this an initial closing, so more may follow.
What it means for a shareholder
16.5m new shares at US$0.010 to raise about US$165,000. That's 41% dilution: every existing holder's slice gets 41% smaller. If you held US$1,000 of shares (100,000 at the issue price), your slice goes from 0.423% to 0.249% of the company. To keep it you'd need 69,767 more shares - about US$698 at the issue price.
Plan A Promotions held the final closing of a private placement on October 21, 2011, issuing 13,650,000 new shares at $0.01 for gross proceeds of $136,500, to be used for general corporate purposes. This adds to the share count, so existing holders own a smaller share of the company.
The company, then a shell called Plan A Promotions with no operations, told shareholders its control had changed. On June 22, 2011 a group of investors led by John Preftokis paid $400,000 for 9,700,000 shares (97% of the stock), of which 8,800,000 were newly issued. The three existing directors and officers (Anthony, Heieren, Doolin) are resigning and Preftokis is expected to become President and CEO. This explains the earlier insider sales and the private placement notice.
