HILLTOP ENERGY, LLC.

HILLTOP ENERGY, LLC. suspended its duty to file periodic reports with the SEC.

listing compliance notice

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.

bankruptcy or receivership

HILLTOP ENERGY, LLC. terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

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.

bankruptcy or receivership

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).

bankruptcy or receivership

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).

auditor change

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.

financial restatement

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.

debt financing

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

asset acquisition disposition

HILLTOP ENERGY, LLC.'s exchange filed to remove a class of its securities from listing.

listing compliance notice

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.

listing compliance notice

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.

material agreement

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.

material agreement

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.

listing compliance notice

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.

material agreement

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.

material agreement

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.

material agreement

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.

listing compliance notice

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.

listing compliance notice

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.

capital raising announcement

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.

capital raising announcement

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.

capital raising announcement

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.

asset acquisition disposition

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.

capital raising announcement

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.

listing compliance notice

the American Stock Exchange certified HILLTOP ENERGY, LLC.'s securities for listing, clearing them to begin trading.

listing compliance notice

On May 6, 2008 the company borrowed $2,000,000 on a subordinated note from Diversified Dynamics, controlled by William Bruggeman (over 5% owner), giving it a 0.375% net profits interest in Louisiana properties once the debt and Wells Fargo are repaid. On May 8 an amendment to the Wells Fargo agreement raised the revolver borrowing base to $20,000,000 until the next review (scheduled September 1, 2008) and bars prepaying the term loan before March 1, 2010. The extra borrowing funds completion of four Johnson Branch wells and two more Bethany Longstreet wells; this raises debt considerably.

material agreement

On March 5, 2007 the company signed a credit agreement with Wells Fargo Energy Capital: a $20M revolver plus a $5M convertible term loan, at prime plus 2%, maturing March 1, 2010, secured on substantially all assets. About $5M was used to retire the Petro Capital V debt, ending that dispute-ridden loan. Wells Fargo also got 2.5M warrants at $1.00 (five years) and a promised 5% net profits interest in certain Louisiana properties after repayment; the press release says the term loan converts at $1.00 per share and the revolver's initial borrowing base is $4M.

capital raising announcement

On December 15, 2006 the company sold 7,880,000 new shares for $3,940,000 ($0.50 per share), with warrants for 3,940,000 shares at $0.70 through November 30, 2011. Investors included William Bruggeman (about 23.0% owner beforehand) and director Bob Clements. The press release says proceeds will go to completing the three S.E. Johnson wells, reworking three western wells, more acreage and general purposes; this adds to the share count and is the financing the company had been seeking, so existing holders are diluted.

capital raising announcement

Petro Capital V, the $5.5M senior lender, wrote on December 4, 2006 that the fixes for its September 19 title-default claim (S.E. Johnson 20 #1 and 29 #1 wells) are not enough, and demanded default interest of 17.5% (5 points above the current rate). Management says it was never in default and that any default was cured in time; the lender also claims a default for lacking a third-party June 30, 2006 reserve report on the Texas properties, on which the company has taken no position. This continues the title dispute and puts the senior loan under pressure.

debt financing

On July 28, 2006 the company raised $2,100,000 from unaffiliated investors for 3,000,000 shares plus warrants for 1,500,000 shares, exercisable at $0.70 through July 31, 2011. The placement agent gets 2% of the proceeds in cash plus 150,000 shares. The press release says proceeds fund its share of the S.E. Johnson 19 No. 1 Cotton Valley well and working capital, and that more capital is still being sought. This adds dilution at $0.70 per share, below the $0.80 paid in December 2005.

capital raising announcement

On February 6, 2006 the company borrowed $5,500,000 from Petro Capital V, L.P. at 12.5% interest, due February 6, 2009, secured by substantially all its assets. About $1.8 million repaid its prior senior debt, and warrants for 1,833,334 and 250,000 shares at $1.00 went to the lender and its affiliate. It also bought Cotton Valley leasehold (about 5,000 net acres in DeSoto and Caddo Parishes, Louisiana) from Tauren, owned by CEO Calvin Wallen III, for $3.5 million cash, 2,500,000 shares, a $1.3 million convertible note at $0.80, and a $2.1 million drilling credit. A special committee excluding Wallen negotiated it and obtained a fairness opinion. This is the Tauren deal flagged in December 2005.

asset acquisition disposition

On December 16, 2005 the company sold 2,500,000 shares at $0.80 each (about $2 million) plus five-year warrants for 1,000,000 shares at $1.00. The press release says the money funds its share of two Cotton Valley wells, and that a larger $10-$12 million financing is being pursued, subject to a deal with Tauren (owned by Calvin Wallen III) and several approvals including shareholder approval to raise authorized shares. That larger deal is not yet agreed.

capital raising announcement

On October 6, 2004 the company issued $2,585,000 of 7% senior secured convertible debentures due September 30, 2009, convertible at $0.50 per share, with warrants for 2,585,000 shares at $1.00. Proceeds are for a 25% interest in the Kraemer 24 #1 well in the Bethany-Longstreet play in northern Louisiana and for drilling two more wells. For shareholders this adds secured debt and potential dilution from conversion and the warrants. The attached press release gives the amount as $2.575 million, which differs from the filing's $2,585,000.

capital raising announcement

The company (filing under the name Cubic Energy, Inc.) completed an exchange offer on April 27, 2001, acquiring 15%-45% working interests in 14 wells plus all units in four LLCs and about 9.85% of a fifth, in Texas and Louisiana. The LLCs hold interests in about 5 producing properties with proved reserves of about 3.984 Bcfe. It paid with about 11,141,256 new shares, valued at $0.50 each for the offer, bringing shares outstanding to about 29,878,203. The wells are operated by Tauren and Fossil, both owned by director and officer Calvin Wallen III, a related-party link the filing says disinterested directors approved. Financial statements were promised by later amendment.

asset acquisition disposition