Each one in plain English, with the numbers worked through for a shareholder.
7 Feb 2018capital raising announcement● NeutralMajor
On February 1, 2018 PetroShare signed a $25 million secured term credit agreement with Providence Wattenberg, LP and 5NR Wattenberg, LLC, made up of the $5 million advanced in December 2017 plus $20 million funded at closing. This is the second funding expected in the earlier context, and it completed. It is due February 1, 2020, with interest at 14% plus the greater of 3-month LIBOR or 1% (capped at 17%), and is secured on all assets. The lenders can convert it to stock at $1.15 (20% of principal) and $1.55 (the rest), and received 1,500,000 penny warrants, rights to buy up to 50% of future offerings through 2018 (25% after), and an option to buy up to $25 million of stock from the maturity date. The company also agreed to lender board seats and consent rights over equity, debt, asset sales and key hires. Proceeds repaid the PEO line ($5.5 million) and part of the PEP III line ($1.5 million plus $500,000 interest), leaving $2.1 million due June 30, 2018, and $1.25 million commitment fee was paid with another $1.25 million underwriting fee due before February 1, 2019. The press release says the Shook pad wells are drilled, cased and cemented and completion plans are being finalised
On December 21, 2017 PetroShare borrowed $5 million from Providence Energy Ltd. (an affiliate of its existing Providence lender), secured on all its assets, at the greater of 3-month LIBOR or 1% plus 14%, and used it to pay overdue accounts payable. The lenders also got warrants for 1,500,000 shares at $0.01 and can name up to three directors, and the company needs their consent for new equity or debt, mergers, asset sales or key hires or firings. A further $20 million loan is expected around January 28, 2018, but is not certain; if it fails the $5 million is due by February 16, 2018 and a $250,000 fee is payable if the failure is not the lenders' fault. This is a significant shift of control toward lenders and the penny warrants could dilute shareholders.
1 Nov 2017capital raising announcement● NeutralMajor
The Series B offering ended with a final closing on October 26, 2017 ($405,000 from six investors), for $4,724,900 in total, of which ten officers and directors bought $570,000; commissions to GVC Capital totalled $204,203. The company also says it converted $5,166,800 of principal and $137,706 of interest into about 4.82 million shares at $1.10 when the stock was worth $1.38, and will book a loss in Q4 2017 for the cheaper conversion price. This completes the raise and conversion described earlier, and the figures differ slightly from the October 20 filing (4,936,799 and 4,488,000 shares).
20 Oct 2017capital raising announcement● NeutralMajor
On October 17, 2017 PetroShare sold another $2,624,900 of 15% Series B convertible notes to 53 investors, with a final closing expected October 23. Holders of the earlier 10% notes could convert twice their Series B purchase at $1.10 per share (instead of $1.50) by October 15; $4,936,799 of those notes were converted into 4,488,000 shares. This continues the Series B raise, and the conversions cut the 10% note debt but add shares for existing holders.
On September 25, 2017 PetroShare sold $1,695,000 of new 15% unsecured convertible notes (due December 31, 2018, convertible at $1.50) to 27 investors, including five officers and directors who bought $380,000. The Providence lenders consented and waived any default over the offering; in exchange the company must use the money only for drilling costs and upkeep on wells securing the Providence loans, issue 250,000 shares to Providence Energy Operators, raise the interest on the $5,000,000 initial credit line to 10% from September 1, and start paying interest in Q4 2017 and meet Providence at least twice a month on working capital. The filing also shows the supplemental line was cut by a $3,552,500 repayment on April 12 and its maturity extended to December 27, 2017. This is new, costlier borrowing on top of the 10% notes, and the stock issue and conversion rights could dilute holders.
3 Feb 2017capital raising announcement● NeutralMajor
PetroShare completed the final closing of the private placement on January 30, 2017, raising $10,000,000 in total, including $4,731,950 in this last round from 42 investors for 94.64 units. The notes pay 10%, mature December 31, 2018 and convert at $1.50 per share, and the warrants allow purchases at $3.00 until December 31, 2019. The placement agent GVC Capital received $1,000,000 in commissions plus warrants for 666,600 shares at $1.50 expiring December 31, 2021. The company also now lists a new address in Englewood, Colorado. This completes the financing begun in December and adds convertible debt and warrants that could dilute shareholders.
26 Jan 2017capital raising announcement● NeutralMajor
On January 20, 2017 PetroShare held a second closing of its convertible note private placement, selling 66.509 units to 64 more investors for $3,325,450 and paying its placement agent $332,545. On January 24 it raised the over-subscription option to 80 units, lifting the maximum offering to $10,000,000. This continues the financing that began in December.
5 Jan 2017capital raising announcement● NeutralMajor
PetroShare began a private placement of units, each a $50,000 10% unsecured convertible note due December 31, 2018 plus 33,333 warrants at $3.00, with a target of up to 120 units ($6 million) and an option for 30 more. A first closing on December 30, 2016 raised $1,942,600 from 25 investors, including six officers or directors. Notes convert at $1.50 per share, so if converted they would dilute existing holders, and the money is meant for drilling, leasing, overhead and working capital. This is new financing beyond the Providence credit line.
