1 July 2016listing compliance notice▼ BadMajor
HILLTOP ENERGY, LLC. suspended its duty to file periodic reports with the SEC.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
1 Mar 2016bankruptcy or receivership▼ BadMajor
The Chapter 11 plan confirmed on Feb 17, 2016 took effect on March 1, 2016. The filing states all common stock and other equity interests were cancelled without consideration and have no value, and the company was converted into a Delaware limited liability company with membership interests issued under the plan. This resolves the open question of when the plan would go effective; the filing does not itself restate who received the membership interests.
1 Mar 2016listing compliance notice▼ BadMajor
HILLTOP ENERGY, LLC. terminated the registration of a class of securities, ending its reporting obligation for them.
19 Feb 2016bankruptcy or receivership▼ BadMajor
On Feb 17, 2016 the bankruptcy court confirmed the Third Amended Prepackaged Plan, expected to take effect around March 1, 2016. On that date all common and preferred stock is cancelled, the company becomes a Delaware LLC, noteholders receive 100% of the membership interests plus new senior secured notes, and Wells Fargo receives 100% of Reorganized Cubic Louisiana. The company reported total assets of $68,883,516 against total liabilities of $119,194,680 at Dec 31, 2015.
14 Dec 2015bankruptcy or receivership▼ BadMajor
Cubic and its four subsidiaries filed Chapter 11 on Dec 11, 2015 in Delaware with a prepackaged plan backed by the noteholders, BP, Wells Fargo Energy Capital and Fossil Operating. Under the plan all existing equity, including the common stock, is cancelled with no payment to stockholders; the noteholders' affiliates get 100% of the reorganized company plus new senior secured notes, and Wells Fargo gets 100% of the reorganized Cubic Louisiana companies. The bankruptcy also accelerated the notes and the Wells Fargo debt, and ended the Oct 2013 Investment Agreement. This follows the failure of the 2014 Strategic Transaction path to avoid restructuring (inference).
17 Sept 2015auditor change▼ BadMajor
BDO USA, hired in July 2014, resigned as Cubic's auditor on Sept 11, 2015. The filing reports no disagreements, but notes its June 2014 audit report included a going-concern doubt and refers to material weaknesses in internal controls identified in Sept/Oct 2014 (financial reporting, asset retirement obligations, complex transactions).
30 Sept 2014financial restatement▼ BadMajor
Cubic said its quarterly reports for December 2013 and March 2014 can no longer be relied on, because the warrants issued with the October 2013 note financing (with full ratchet provisions) were wrongly booked as equity rather than as a liability at fair value, and the debt discount was too small. It plans to file corrected reports; the filing gives no restated figures. This relates to the Oct 2013 warrants and notes in the running history.
17 July 2014auditor change● Neutral
Cubic's audit committee picked BDO USA as its auditor for the year ended June 30, 2014 after a competitive process, replacing Philip Vogel & Co., which was told it would not be retained. The filing says there were no disagreements with Philip Vogel; its 2012 report had included a going-concern doubt.
14 July 2014debt financing▼ BadMajor
Cubic Energy signed an agreement with the holders of its $66.0 million senior secured notes (issued Oct 2013) in which they waived specified defaults and default interest and modified some covenants. In return, the interest rate on the notes rose from 15.5% to 20.5% after March 31, 2014, no longer payable in cash but added to the debt and compounded quarterly, and the company must complete (or sign a deal reasonably expected to complete by Dec 31, 2014) a 'Strategic Transaction' by Oct 17, 2014. The filing does not say which defaults were waived.
3 Oct 2013asset acquisition disposition● NeutralMajor
On October 2, 2013 the company completed a large restructuring: $66.0 million of 15.5% senior secured notes due October 2, 2016, plus warrants over 65,834,549 shares at $0.01 and 32,917,274 shares at $0.50 and Series C voting preferred stock issued to the note investors, who also get the right to name three directors. It also received about $35 million upfront from a call option derivative transaction. It repaid the $5 million Wells Fargo term loan and moved the remaining $20,865,110 Wells Fargo debt, along with its Northwest Louisiana assets, into a new subsidiary, Cubic Louisiana, with a new revolver of up to $10 million at Wells Fargo's sole discretion. It closed the Gastar purchase (about 17,400 net acres, $39,118,830), bought Navasota's interests (about 6,400 net acres, $19,400,000), and bought Cotton Valley interests in Louisiana from CEO Wallen's company Tauren (about 5,600 net acres, $4,000,000 cash plus $2,000,000 of Series B preferred). Wallen's Series A preferred ($12,047,000, held through Langtry) and his $2 million note plus accrued interest were swapped into Series B preferred convertible at $0.50. The warrants and convertible preferred could dilute existing common sh
7 Aug 2013listing compliance notice● NeutralMajor
HILLTOP ENERGY, LLC.'s exchange filed to remove a class of its securities from listing.
16 July 2013listing compliance notice▼ BadMajor
On July 10, 2013 NYSE MKT staff determined the company's stock should be delisted for failing the listing standards (Sections 1003(a)(i)-(iv)). The company does not plan to appeal, NYSE MKT trading ends at the open on July 17, 2013, and the stock is expected to trade on the OTCQB market instead. The company says it will keep filing its SEC reports. This ends the listing-compliance thread that began in 2012 with a delisting rather than a cure.
24 Apr 2013material agreement● NeutralMajor
On April 19, 2013 the company agreed to buy proven reserves, production and undeveloped leasehold in Leon and Robertson Counties, Texas from Gastar Exploration Texas, LP for $46,000,000 (subject to adjustments), with closing expected by June 5, 2013. The press release says the deal covers about 16,300 net acres and production of about 2,050 boe per day (97% gas), and CEO Wallen calls it a first step toward becoming a diversified oil and gas company. This is the acquisition the Wells Fargo extension referred to; the filing does not say how the $46 million will be funded.
3 Apr 2013material agreement▼ BadMajor
On March 28, 2013 Wells Fargo extended the due date of the $5 million term note and the revolver (about $20.87 million) again, to May 31, 2013, and the company paid the $260,000 loan fee that the prior amendment required. The term note's conversion price was not cut to $0.20 as the prior amendment contemplated; instead it is reduced to the lowest price in a common stock issuance of $10 million or more before May 31, or to $0.20 if the note is not repaid and no such issuance occurs. CEO Wallen's $2 million note was extended to June 1, 2013. The company's press release ties the extension to progress on a material acquisition. The debt is again deferred, not repaid.
12 Mar 2013material agreement● Neutral
On March 6, 2013 the board approved a separation plan for employees: if someone is terminated in connection with a change in control, they get a cash payment. CFO Larry Badgley would receive 12 months of base salary and other eligible employees 50% of 12 months' base salary. It does not cover employees who already have severance rights under an employment agreement. It only pays out if a change in control happens and the employee is terminated; the filing does not say a change in control is planned.
31 Jan 2013listing compliance notice▼ BadMajor
On January 25, 2013 NYSE MKT told the company its stock is subject to delisting, citing continued shortfalls in stockholders' equity and concerns about its financial viability with respect to maturing obligations. The company plans to request a hearing, which pauses the delisting until the panel decides, and says there is no assurance the appeal will succeed. This continues the listing-deficiency thread, and the 1003(a)(iv) viability concern flagged earlier is now part of the delisting determination.
7 Jan 2013material agreement▼ BadMajor
Effective December 31, 2012, Wells Fargo Energy Capital pushed the due date for the $5 million convertible term note and the revolver (about $20.87 million outstanding) from December 31, 2012 to March 31, 2013, for a $260,000 renewal fee. Wells Fargo's warrants over 8.5 million shares were repriced to $0.20 and now run to December 1, 2017. If the company does not complete a substantive oil/NGL acquisition by March 31, 2013, it owes another $260,000 fee and the term note's conversion price drops to $0.20. CEO Wallen's $2 million note was also extended, to April 1, 2013. The debt is deferred again, not repaid, and the cheaper warrants and conversion terms could dilute shareholders.
9 Oct 2012material agreement▲ GoodMajor
Effective October 2, 2012 the company, Tauren (owned by CEO Wallen), EXCO and BG settled their dispute over the pre-paid drilling credits with mutual releases. EXCO and BG will apply the company's drilling credits as set out in the agreement, put it in consent status on specified wells, and pay $12,179,853.40 in cash, of which $9,134,890.05 goes to Wells Fargo to reduce the revolver, as the Fourth Amendment requires. This resolves the EXCO/BG dispute thread; the filing does not state the remaining credit value.
13 Sept 2012material agreement● Neutral
On September 12, 2012 the company replaced CEO Wallen's $2,000,000 subordinated note (Dec 2009) with a new one for the same principal plus accrued interest. Interest (prime+1%) now accrues instead of being paid monthly, and the due date is January 1, 2013 rather than August 31, 2012. It remains subordinated to Wells Fargo. This is a related-party loan with a changed schedule.
20 June 2012material agreement● NeutralMajor
On June 18, 2012 Wells Fargo agreed in a Fourth Amendment to extend the required repayment date to December 31, 2012 (previously July 1, 2012). The borrowing base will be cut by 75% of any cash received from the arbitration award involving EXCO and BG, and the amendment limits some general and administrative spending and dividends. The debt is not refinanced, only deferred.
7 Mar 2012listing compliance notice▼ BadMajor
On March 2, 2012 NYSE Amex accepted the company's compliance plan and gave it until June 27, 2013 to meet the equity and loss-history standards. In the same letter it added a new deficiency, saying it is questionable whether the company can continue operations or meet obligations as they mature, with a shorter deadline of July 31, 2012. Delisting proceedings remain possible if progress lags; the company can appeal.
1 Mar 2012listing compliance notice▼ Bad
On February 24, 2012 NYSE Amex flagged a further deficiency: equity under $2M with losses in two of the last three fiscal years. No new plan is required because the plan already submitted (under review) covers it. Delisting remains possible if the plan is rejected or not followed.
3 Jan 2012listing compliance notice▼ BadMajor
On December 27, 2011 NYSE Amex said the company fails two listing standards: equity under $6M with losses in five consecutive years, and equity under $4M with losses in three of the last four years. The company plans to submit a compliance plan by January 27, 2012 (up to 18 months to comply) or face delisting proceedings, and has hired Donohoe Advisory Associates. This reopens the listing problem the exchange had declared resolved in March 2010. The press release also mentions a dispute with EXCO and BG over the company's drilling credits, a new thread.
18 Jan 2011material agreement● Neutral
On January 14, 2011 the company signed a 24-month employment agreement (effective October 1, 2010) with CFO Larry G. Badgley: $163,800 annual base salary and options on 288,667 shares. If he is terminated without cause or leaves for Good Reason, remaining salary through the term is owed. This is a routine management contract; Badgley is now the CFO named in place of James Busby in earlier context (inference).
1 Sept 2010capital raising announcement● NeutralMajor
On August 30, 2010 Wells Fargo raised the borrowing base from $25M to $30M in a Third Amendment, and the company borrowed the full $5M increase. Interest stays at prime+2%, maturity stays July 1, 2012, and Wells Fargo received new warrants for 1,000,000 shares at $1.00 expiring December 1, 2014. Debt rises by $5M and the warrants add potential dilution.
10 Mar 2010capital raising announcement● NeutralMajor
On March 5, 2010 NYSE Amex told the company it has resolved the continued-listing deficiency first raised in June 2009. On March 10 the company began issuing Langtry (controlled by CEO Wallen) 10,350,000 common shares and 103,500 convertible preferred shares (convertible at $1.20) in exchange for the pre-paid drilling credits, after the Exchange approved the listing on March 5. Authorized common shares were raised from 100M to 120M. This closes the listing thread and completes the Langtry issuance that dilutes existing holders.
23 Dec 2009capital raising announcement▲ GoodMajor
On December 18, 2009 the company signed a Second Amendment with Wells Fargo Energy Capital raising the revolver from $20M to $40M, lifting the borrowing base from $20M to $25M, and pushing maturity of the revolver and the $5M convertible term loan to July 1, 2012 (still prime+2%, secured on substantially all assets). It issued Wells Fargo new warrants for 5,000,000 shares at $1.00 (expiring Dec 1, 2014) and extended the existing 2,500,000-share warrants to the same date. Separately, CEO Calvin Wallen III lent the company $2,000,000 (prime+1%, due August 31, 2012, subordinated to Wells Fargo), and the proceeds repaid the Diversified Dynamics note held by director William Bruggeman. The filing does not say it settles the earlier $12.5M borrowing-base shortfall, but the new $25M base replaces the $7.5M base; the warrants add potential dilution.
1 Dec 2009asset acquisition disposition● NeutralMajor
On November 24, 2009 the company bought $30,952,810 of pre-paid drilling credits for Haynesville Shale wells from Tauren and Langtry, both controlled by CEO Calvin Wallen III (related parties; approved by a special committee of non-employee directors). In exchange it gave Tauren a ~2% overriding royalty below the Taylor Sand and agreed to issue Langtry 10,350,000 common shares plus $10,350,000 of 8% preferred stock convertible at $1.20, subject to NYSE Amex approval, which would dilute existing holders. Wells Fargo extended its waiver on the borrowing-base shortfall to January 1, 2010 to allow talks on a credit amendment, so that issue remains open.
1 Sept 2009capital raising announcement● NeutralMajor
In August 2009 the company sold 2,104,001 shares for about $1,788,400 ($0.85 per share), with warrants for 1,052,000 shares at $0.85 through July 31, 2014; $59,500 in commissions went to Avalon Group. Wells Fargo also extended its waiver on the $12.5M borrowing-base shortfall from September 1 to October 1, 2009, so the shortfall is still unresolved.
What it means for a shareholder
1.1m new shares at $0.850 to raise about $1.8m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
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30 June 2009listing compliance notice▼ BadMajor
Wells Fargo cut the borrowing base from $20.0M to $7.5M on June 29, 2009, leaving a $12.5M shortfall; it waived enforcement until September 1, 2009, and the company can prepay, pay in five monthly instalments, or add properties. Separately, NYSE Amex said on June 26 that the company's losses or financial condition make it questionable whether it can continue operations or meet obligations; the company plans a compliance plan by July 27 and must regain compliance by December 28, 2009 or face delisting proceedings. This reverses the 2008 borrowing-base expansion and is a serious warning for shareholders.