Each one in plain English, with the numbers worked through for a shareholder.
28 Nov 2011bankruptcy or receivership▼ BadMajor
On November 21, 2011 a federal judge appointed Mark E. Dottore as receiver over the company and Osborne's Great Plains Exploration and Oz Gas, as Charter One had requested. He takes control of the company's records and assets and may manage the company as he sees fit. The court declined to order immediate liquidation, found the defendants owe about $30 million in total, and set a hearing for February 15, 2012 on whether the receivership continues. The filing says nothing about what happens to common shareholders' stake.
The forbearance with Charter One expired July 1, 2011 without the $9.5 million line of credit being paid off. On October 3, 2011 Charter One sued in federal court to foreclose on the company's collateral and to appoint a receiver for the company and Osborne-owned companies. The company says it is still talking with Charter One and seeking other financing, with no guarantee a receiver will be avoided. This is the failure of the 2010 forbearance arrangement.
After Charter One won a judgment on August 20, 2009 for $9.5 million plus interest and costs against the company, Osborne and his trust, the parties signed a forbearance agreement on June 18, 2010 under which Charter One holds off enforcement until July 1, 2011. This follows the 2008 loan that matured August 1, 2009 unpaid. Conditions include $400,000 monthly payments (including a $40,000 fee), pledges of the company's interests in the Alpha and Panzica wells and in Kykuit, and Osborne pledging Energy, Inc. stock worth at least $9.6 million. The company says it has no cash to repay the line and there is substantial doubt it can continue as a going concern if it cannot pay or refinance. The filing also says the Painesville storage facility is held through a partnership in which the company has 29.9%, and that FirstMerit waived defaults on its note on May 11, 2010.
On May 22, 2009 the company amended the $600,000 Great Plains note from February 2009 so it is payable on demand instead of $100,000 a month starting May 25, 2009. Other terms are unchanged, including 8% annual interest. The filing does not say why; the change removes the fixed monthly repayment schedule.
On February 13, 2009 Osborne's Great Plains Exploration lent the company another $600,000 for ongoing capital needs. The note is repayable at $100,000 a month starting March 28, 2009, unlike the earlier demand notes. The filing states interest of 8.0% 'per month', which is probably a drafting slip for per year (inference; the May 2009 filing says 8% per year). It continues the company's reliance on Osborne-related financing.
On January 12, 2009 the company amended its 2006 oil and gas operations agreement with Osborne's Great Plains Exploration, raising the gas gathering charge it pays from $0.30 to $0.40 per mcf, effective November 1, 2008. The filing says the rise was due to higher pipeline construction and maintenance material costs, and that a majority of disinterested directors approved it. It is another related-party deal that raises the company's costs.
This filing (made July 9, 2008) reports several Montana lease and Kykuit deals. On May 1, 2008 Kykuit bought Hemus's remaining lease rights for $250,000, which ended the August 2007 joint venture development agreement with Hemus. On May 29, 2008 the company sold a 25% interest in Kykuit to Geis Coyne Oil & Gas, LLC for about $1.6 million (director Terence Coyne owns 10% of Geis), cutting its stake from 40% to about 19% while it stays managing member. On June 11, 2008 Kykuit agreed to buy about 35,000 acres of Montana leases from Macum Energy and other sellers for $2.5 million, subject to due diligence and not guaranteed to close. Osborne's Great Plains also lent the company $500,000 (May 23 and 27, 2008) on demand notes at 8% a year, continuing the series of loans from Osborne's company.
On June 20, 2008 the company gave Chairman/CEO Osborne a five-year warrant to buy 50,000 common shares at $1.00 each, in return for his providing collateral for the company's Charter One credit facility. If exercised it would dilute existing shareholders slightly.
On March 28, 2008 the company and Osborne replaced the Charter One facility with an amended and restated $9.5 million revolving loan due August 1, 2009, resolving the string of short extensions. Borrowing is capped at the lesser of $9.5 million or 65% of the net present value of the company's oil and gas properties plus up to $3.5 million until February 28, 2009. The company has drawn $5.7 million, interest is LIBOR plus 1.75%, and the loan is secured by substantially all company assets and Osborne Trust properties, with a Trust guaranty. Proceeds must go to equipment, drilling and exploration, and none may repay the Trust. Osborne must keep at least $2.0 million of unencumbered liquid assets, down from $10.0 million in the original loan.
On February 26, 2008 the company extended its up-to-$9.5 million Charter One revolving loan maturity from February 29, 2008 to March 31, 2008. It is another short extension of the same loan.
Effective February 12, 2008 the company sold 650 Series A Convertible Preferred Shares at $1,000 each ($650,000 total) to two accredited investors. The shares pay 8% annual dividends (10% if payments are missed), carry a $1,000 liquidation preference, and convert to common at $1.00 per share. A missed dividend lets preferred holders elect one director. This adds a class of stock ranking ahead of common shareholders and potential dilution. The filing does not state a use for the money.
Two items: Effective December 28, 2007 Charter One extended the company's up-to-$9.5 million revolving loan from December 28, 2007 to February 29, 2008. On January 30, 2008 the company's storage subsidiary agreed to sell its Ravenna, Ohio property to a trust owned by Chairman/CEO Osborne for $204,761.50, subject to adjustment. Osborne can terminate if title issues are not resolved, closing is due within 90 days, and the filing says completion is not guaranteed. This is another related-party deal, and Ravenna was not listed among the facilities in earlier context.
On November 30, 2007 Great Plains Exploration, LLC, owned by Chairman/CEO Osborne, lent the company another $120,000 on a demand note at LIBOR plus 1.75% for ongoing capital requirements. It is a small addition to the series of Great Plains loans.
On November 20, 2007 Great Plains Exploration, LLC, owned by Chairman/CEO Osborne, lent the company $800,000 on a demand note at LIBOR plus 1.75% for ongoing capital requirements. It continues the series of loans from Osborne's company.
On October 26, 2007 the company and Osborne agreed with Charter One (now RBS Citizens, N.A.) to extend the maturity of its revolving loan to December 28, 2007. The filing describes the loan as up to $9.5 million, up from the $7.5 million limit of February 2007, but this filing does not explain that increase.
On October 10, 2007 Great Plains Exploration, LLC, owned by Chairman/CEO Osborne, lent the company a further $1,000,000 on a demand note at LIBOR plus 1.75%. It is the largest single Great Plains loan so far in this series.
On September 12, 2007 Great Plains Exploration, LLC lent the company another $500,000 on a demand note at LIBOR plus 1.75% for ongoing capital requirements. It continues the string of Great Plains loans.
On August 28, 2007 Great Plains Exploration, LLC loaned the company $500,000 on a demand note at LIBOR plus 1.75%, to fund its capital requirements. This adds to the $880,000 Great Plains loan from earlier in August. The filing does not say Great Plains is owned by Osborne, though the August 9 filing did.
On August 3, 2007 Kykuit Resources, LLC, in which the company is managing member with a 40% stake, took over a purchase agreement from Great Plains Exploration, LLC (wholly owned by Chairman/CEO Osborne) and bought a 75% interest in oil, gas and mineral leases in Montana from Hemus, Ltd. for $2,476,721. Kykuit will develop and operate the leases under a joint venture agreement with Hemus. Part of the price was funded by an $880,000 demand loan to the company from Great Plains at LIBOR plus 1.75%. This is the first specific oil and gas asset disclosed, and Osborne, director Calabrese, president Gregory Osborne and Energy West, where Osborne is chairman, all have ties to the deal.
25 May 2007asset acquisition disposition● NeutralMajor
The sale of the Gahanna, Ohio self-storage facility closed on May 21, 2007, resolving the open question from October 2006. The price was $1,400,000, $50,000 lower than the original $1,450,000 after a December 2006 amendment, with $150,000 allocated to vacant land owned by Columbus Tile Yard, LLC, which is owned by Chairman/CEO Osborne. The filing gives pro forma financials but no statement of what the proceeds will be used for.
On February 20, 2007 the company, Chairman/CEO Osborne and Charter One agreed to raise the Charter One revolving loan limit from $5.0 million to $7.5 million until May 21, 2007, after which it reverts to $5.0 million. In return the company gave Charter One a lien on substantially all of its assets, and on default the bank can take or sell them. This changes the unsecured loan from September 2006 into one backed by company assets.
Effective October 5, 2006 the company agreed to sell its Gahanna, Ohio self-storage facility to Buckeye Storage of Gahanna LLC for $1,450,000 cash, with $150,000 allocated to vacant land owned by Columbus Tile Yard, LLC, which is owned by Chairman/CEO Osborne. The buyer can terminate during a 30-day due diligence period if the property is unsuitable or financing cannot be obtained. This is one of the two storage facilities kept after the 2005 sale.
On September 28, 2006 the company and Chairman/CEO Richard Osborne, as co-borrowers, entered an unsecured revolving loan of up to $5.0 million with Charter One Bank, running to September 28, 2007, at LIBOR plus 1.75%. The company says it intends to use the proceeds mainly to drill new oil wells and grow its oil and gas business. Osborne must keep at least $10.0 million of unencumbered liquid assets.
On June 30, 2006 the company issued 1,102,355 shares at $0.62 each to the Richard M. Osborne Trust, of which CEO and Chairman Osborne is trustee, to pay off the $683,460.50 balance on a revolving demand note dated January 1, 2006. The debt is cleared but existing shareholders are diluted, and the counterparty is the company's own chairman.
