Each one in plain English, with the numbers worked through for a shareholder.
10 Nov 2015asset acquisition disposition● NeutralMajor
The company bought a 15% working interest in the Twin Lakes San Andres Unit in New Mexico, plus equipment, for $196,875: $50,000 cash and a $146,875 note due December 31, 2015 at 10%, secured by 1,000,000 shares. It also acquired a $1.3 million defaulted note (from a bankruptcy trustee, owed by Canyon E&P) for six million shares, and becomes field operator November 15, 2015. The unit has 130 wells, only 6 online. It also sold 28 units ($168,000) in the new offering, including to directors and the CEO's affiliate, set director pay and options, and adopted a 4,000,000-share incentive plan. This extends the company's move beyond Texas and adds dilution and debt.
The company bought a 10% working interest in the SUDS field in Creek County, Oklahoma from SUDS Properties LLC (owned by Jovian Resources) for 10,586,805 restricted shares, 33% of its outstanding stock, adding about 151,000 barrels of proven reserves. The new CEO and President, Zel Khan, is a former manager of Jovian; he gets a $160,000 salary (deferrable, with warrants) and 1,000,000 restricted shares. The shares were priced at $0.06 and the May 2015 offering was closed early because of lower oil and share prices. A new unit offering at $6,000 per unit began September 1. The company has moved to Houston, and the share issuance heavily dilutes existing holders.
20 Feb 2014capital raising announcement● NeutralMajor
The company began a private placement of units at $10,000.20 each (33,334 shares at $0.30 plus a warrant for 33,334 shares at $0.75, exercisable to August 5, 2019). The first sales were 22.5 units for about $225,000, with more expected on the same terms by August 5, 2014. One buyer already held about 8.8% (1,319,045 shares) and runs a consulting firm the company has a contract with; this matches the Mercadyne/David Baker holding disclosed earlier, though the filing does not name him (inference). New shares and warrants will dilute existing holders.
What it means for a shareholder
33,334 new shares at $0.300 to raise about $10,000. That's 0.235% dilution: every existing holder's slice gets 0.235% smaller. If you held $1,000 of shares (3,333 at the issue price), your slice goes from 0.0235% to 0.0235% of the company. To keep it you'd need 8 more shares - about $2 at the issue price.
The company hired Mercadyne Advisors LLC for one year to help it plan access to capital markets, cut costs, and handle investor relations, paying with 800,000 shares issued in the name of David Baker (who already owned about 3.7%). Half of those shares (400,000) must be returned if the company ends the agreement for non-performance by April 27, 2014, or if the consultant doesn't invest $125,000 in the company by then. This adds shares to the count.
3 Jan 2014capital raising announcement● NeutralMajor
The company restated its financing with Rick Wilber: the September 2013 $100,000 note and warrant were replaced by a $200,000 secured note (6%, due September 30, 2016, convertible at $0.30) and a warrant for 570,000 shares at $0.80. The filing also widens the security for his earlier $350,000 note, so his collateral now covers the two-acre tract around each well. The new note is secured by one Milam County well and its two-acre tract. This continues the Wilber financing and puts more of the company's assets behind it.
30 Oct 2013material agreement termination▲ GoodMajor
The company signed a new lease with Noack Farms on the same 623.29 acres in Milam County where all its current wells sit, and released its earlier lease (which carried a 25% royalty) so the new one could take effect. The new lease cuts the royalty to 1/6th, and the company paid $3,116.45 and issued 100,000 shares to Noack, and also agreed to defend and indemnify Noack. The company says the new terms suit its business plan and economic situation better.
The company raised another $100,000 from Rick Wilber through a 6% convertible note due September 30, 2016 (convertible at $0.30 per share), plus a warrant for 285,000 shares at $0.80 per share. This adds to the June 2013 Wilber financing; unlike that note, this one is not described as secured in this filing.
