RED MOUNTAIN RESOURCES, INC.

Filed November 13, 2015 for an agreement effective June 30, 2015, the fifth amendment to the Independent Bank credit agreement keeps the borrowing base at $12.4 million and sets monthly commitment reductions of $125,000 from July 1, 2015. The bank waived defaults on the current-ratio covenant for the quarter ended December 31, 2014 and on the rule against payables more than 90 days past due for the quarters ended December 31, 2014 and March 31, 2015. This continues the pattern of covenant breaches being waived, now including overdue payables.

material agreement

RED MOUNTAIN RESOURCES, INC. deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

On April 21, 2015 Red Mountain, through its subsidiaries, sold 50% of its interest in certain oil and gas assets to Black Shale Minerals, LLC for $25.0 million (subject to adjustments), effective April 1, 2015. It plans to use the cash to repay part of the Independent Bank loan, pay accounts receivable and for working capital. The same day the bank cut the borrowing base and commitment from $27.8 million to $12.4 million and set monthly reductions to $0. Pro forma financials are to be filed later.

asset acquisition disposition

On March 11, 2015 Independent Bank waived the borrowers' failure to meet the current-assets-to-current-liabilities ratio for the quarter ended September 30, 2014. The bank also cut the borrowing base and commitment from $30 million to $27.8 million from March 1, 2015, with monthly commitment reductions of $350,000 starting then. This is a second covenant waiver on the 2013 credit facility, now paired with a smaller credit line.

material agreement

On August 12, 2014 Red Mountain announced a planned underwritten public offering of more Series A preferred stock (Northland Capital Markets and Euro Pacific Capital as managers; Nasdaq listing applied for), with proceeds meant to fund part of its fiscal 2015 development program; price and size were not set. Its operational update reported net production of about 109.2 MBoe for the quarter ended June 30, 2014 (about 1,200 Boe/d). The first Kansas well, Besperat #1 in Rush County, found no commercial hydrocarbons (dry hole cost about $100,000) out of a planned seven-well program, while a Turkey Track Bone Spring well made 632 Boe/d at its peak.

production update

On May 12, 2014 Red Mountain agreed to exchange 222,224 shares of its Series A preferred stock for 1,388,898 common shares, effective April 1, 2014. That leaves 254,463 preferred shares outstanding with a total redemption amount of $6.4 million. This continues the conversion of the 2013 preferred (treated as debt) into common stock, which reduces the preferred and its dividend obligation but adds common shares.

capital raising announcement

Effective January 31, 2014, Red Mountain combined every 10 shares of common stock into 1 (about 134.0 million shares became about 13.4 million) and cut authorized common shares from 500 million to 50 million. It also moved its incorporation from Florida to Texas by merging into a wholly owned Texas subsidiary; the same directors and officers continue. Both steps were approved by shareholders at the December 20, 2013 annual meeting. Warrant terms were adjusted proportionally, and the stock traded as RDMPD for 20 business days before reverting to RDMP. Holders' ownership percentages are unchanged by the split; fractional shares are paid out in cash.

business combination

On September 12, 2013 Independent Bank waived a default over the borrowers' current-asset-to-current-liability ratio as of May 31, 2013, which they had failed to meet. The amendment also adjusted terms for the move of the fiscal year-end from May 31 to June 30 and raised the borrowing base and commitment from $20 million to $30 million (commitment increase on payment of a $10,000 fee). This shows a covenant breach on the February 2013 credit facility, which the lender waived.

material agreement

On August 22, 2013 Red Mountain signed an amended underwriting agreement with Global Hunter Securities to sell up to 750,000 units (up from 500,000) at $22.50 each. Each unit is one 10% Series A cumulative redeemable preferred share ($25 liquidation preference) plus a warrant for up to 25 common shares, with sales to the public and to certain noteholders in cancellation of debt. The company will redeem the preferred on July 15, 2018 at $25 plus unpaid dividends, so it will be shown as debt on its balance sheet. Closing was expected around August 27, 2013.

debt financing

On February 5, 2013 Red Mountain, Cross Border and two subsidiaries signed a revolving credit agreement with Independent Bank (up to $100 million, initial commitment $20 million, maturing February 5, 2016, secured by first liens on substantially all borrower property). Red Mountain borrowed $7.6 million and used part of it to repay the First State Bank of Lonoke notes and the $6.0 million Belzberg senior note, which had been due February 14; Cross Border borrowed $8.9 million and repaid its own facility. This resolves the Belzberg maturity thread, though Red Mountain issued a new $500,000 unsecured subordinated 12% note to the Belzbergs and Caddo due July 31, 2013. It also accepted subscriptions for 7,058,823 shares at $0.85 for $6,000,000, closing by February 28, 2013. The loan has covenants including a requirement that Alan Barksdale remain CEO.

capital raising announcement

On January 28, 2013 Red Mountain bought 5,091,210 Cross Border shares from a limited number of its stockholders for 10,182,420 of its own shares, taking its stake to about 77.9% and leaving it to consolidate Cross Border's results from that date. It also bought 53,341 more Cross Border shares for 106,682 of its shares. This completes the share-funded Cross Border build-up to control (the pending deals were expected to reach 77.6%), at the cost of heavy dilution; the filing says Cross Border financials and pro forma figures will follow by amendment.

asset acquisition disposition

On December 24, 2012 Red Mountain agreed to buy 907,145 Cross Border shares for 1,814,290 of its shares, closed December 27. It then held 7,615,241 Cross Border shares (46.7%); if its other pending agreements close, it would hold 12,653,110 shares (77.6%). This continues the Cross Border build-up toward a controlling stake, with more share dilution.

capital raising announcement

On December 10, 2012 the Belzberg senior secured note was raised from $4,000,000 to $6,000,000, still 12%, maturing February 14, 2013, with first liens on Madera, Pawnee, Shafter Lake, Martin and Cowden and second liens on other properties and 2,136,164 Cross Border shares; the lenders got warrants over 200,000 shares at $1.00 through December 1, 2014. Red Mountain also agreed to buy Bamco Gas receivership assets (Duval, Johnson, Zapata County interests) by issuing 2,375,000 shares to the Bamco debenture trustee, with Black Rock releasing a claim; CEO Barksdale is the Bamco receiver, a related-party link. It also signed a flurry of Cross Border deals (e.g. 2,430,605 shares for 4,861,210 of its shares; Cross Border notes for 1,937,500 shares) that, if closed, would lift its stake from 41.1% to 72%. This continues the Bamco thread and the Cross Border build-up, with heavy dilution and more debt due in about two months.

capital raising announcement

On November 6, 2012 Red Mountain agreed to buy 1,049,628 Cross Border shares for 2,099,256 of its own shares, closing on or after December 3, 2012. It then held 6,708,096 Cross Border shares (41%), with agreements for 2,260,627 more. It also agreed to take $715,000 of 2009A and $280,000 of 2009B debentures for 902,075 shares, and $200,000 of 2009B for 187,816 shares (October 22). These debenture deals continue even though the Hunter Drilling purchase was terminated in October; the filing does not say why.

capital raising announcement

On October 18, 2012 Red Mountain, Hunter Drilling and the trustee signed an agreement ending the July 19 purchase of the O&G Leasing and Performance Drilling assets; it was deemed terminated effective October 23, 2012. The trustee returned the $250,000 deposit. The filing gives no reason. This ends the drilling-rig acquisition thread; the debenture purchases already made are not addressed.

material agreement termination

In October 2012 Red Mountain agreed to buy 512,329 Cross Border shares for 1,024,658 of its shares, and by October 17 held 6,415,262 Cross Border shares (39.7%), plus agreements for 7,919,095 more and warrants over 2,136,164. It also agreed to take in debentures of O&G Leasing: $165,000 of 2009B for 154,948 shares, $75,000 of 2009A for 67,042 shares, and $3,030,000 of 2009A plus $1,255,000 of 2009B for 3,887,039 shares. These continue both the Cross Border build-up and the debenture exchanges for the Hunter Drilling deal, with more shares issued. (The 39.7% is lower than the 45.9% in the prior filing; the text does not explain why, and the Cross Border share count in pending agreements was later corrected.)

capital raising announcement

On August 28, 2012 Red Mountain agreed to buy 1,185,301 Cross Border shares for 2,370,602 of its own shares, bringing its stake to about 45.9% (from about 38.5% earlier in the month). This continues the share-funded Cross Border build-up, with further dilution for Red Mountain holders.

capital raising announcement

On July 19, 2012 Red Mountain and its subsidiary Hunter Drilling agreed to buy substantially all assets of O&G Leasing and Performance Drilling Company, including five drilling rigs, out of a bankruptcy. Payment is $450,000 cash at closing plus up to $500,000 for bankruptcy claims (a $250,000 deposit was paid into escrow), 1,509,307 Red Mountain shares at $1.50 for 2009A debenture interest and 697,110 shares at $1.50 for 2009B debenture interest, $25,955,000 of 6% senior secured convertible debentures and $7,610,000 of 6% junior secured debentures (both convertible at $2.00 in the first year, rising $0.50 each year), and a Washington State Bank note of about $4.08M. Closing needs Bankruptcy Court orders and was expected before the end of 2012. This is a new line of business (drilling rigs) for a company that so far held oil and gas properties, after the terminated Swan deal.

material agreement

On June 30, 2012 Red Mountain terminated the May 9, 2012 agreement to buy Swan PC, LP for about $235.0 million, using its right to end it at any time for any reason. The filing says no material early termination penalties were incurred. The filing gives no reason for terminating. This ends the Swan acquisition thread.

material agreement termination

On June 13, 2012 Red Mountain bought 1,000,000 Cross Border shares for 2,000,000 of its own shares, bringing its stake to about 36.1%. It also reports that the extra-purchase rights from the private placement are now used up: the other investors bought 2,464,546 shares at $1.10 in April (about $2.71M) and 1,846,271 shares at $1.10 in June ($2,030,900), and the rest of the rights expired. Broker commissions were $425,090 in cash plus warrants for 425,090 shares at $1.20. This resolves the open extra-purchase thread and continues the share-funded Cross Border build-up, with further dilution. It also issued 10,000 shares to executive Tommy Folsom for fluid level equipment.

capital raising announcement

On May 9, 2012 Red Mountain agreed to buy all the partnership interests of Swan PC, LP, an oil and gas producer in Jack, Palo Pinto, Clay, Parker and Wise Counties, Texas, from trusts of the Swan family for about $235.0 million, with $20.0 million held in escrow for indemnities. Closing was expected on or about July 1, 2012. The price is far larger than any deal in the company's history so far, and the filing does not say how it would be financed. Red Mountain could terminate at any time and for any reason.

material agreement

This amendment adds detail on the completed private placement: 16,206,000 shares sold for $16,206,000, plus 313,875 shares and warrants over 1,463,000 shares (exercise $1.20, expiring April 30, 2014) issued to brokers. On December 21, 2011 one investor used its extra-purchase right to buy 2,727,272 shares at $1.10 (about $3.0M, an inference from the figures). This resolves part of the open right granted to investors, though the other investors' rights are not addressed.

capital raising announcement

On November 25 and 30, 2011 Red Mountain issued three 10% convertible notes due November 25, 2013: $1,500,000 to Personalvorsorge der Autogrill Schweiz AG, $1,000,000 to Hohenplan Privatstiftung and $250,000 to SST Advisors, Inc., totalling $2,750,000. Holders can convert into shares at $1.00 initially, which would dilute existing shareholders if exercised, and the shares are to be included in a planned resale registration.

debt financing

On November 16, 2011 Red Mountain issued a senior secured note of up to $4,000,000 to Hyman Belzberg, William Belzberg and Caddo Management, advancing $500,000 at once, with further draws for property purchases once security is perfected. It carries 12% interest and matures November 16, 2012, is guaranteed by Black Rock and RMR Operating, and is secured by oil and gas property liens and a pledge of 2,233,000 Cross Border shares. This is the first senior secured borrowing at parent level and puts its Cross Border stake at risk if the note defaults; the note was later extended to February 2013 (per the exhibit-only recovery in context).

debt financing

On November 11, 2011 Black Rock closed the purchase of the Cowden Mineral Interests and some real property in Ector County, Texas from a court-appointed receiver for Alan Todd May and Prosper Oil & Gas, for $1,150,000, after court approval on November 9. The interests cover about 760 gross (740 net) acres with 31 producing wells, held at 75% to 100% working interests. It adds Permian Basin production to the portfolio.

material agreement

On November 4, 2011 Red Mountain sold another 4,151,000 shares at $1.00 and closed the $25 million private placement, which ended up raising 16,206,000 shares for $16,206,000, short of the $25 million ceiling. Three investors now hold rights to buy an additional $3,000,000 of shares until December 31, 2011, at the lesser of $1.10 or a 10-day average closing price. The filing states the aggregate purchase price for this day's sale as '$1.00', which looks like an error, since at $1.00 per share 4,151,000 shares would be $4,151,000 (an inference).

capital raising announcement

On October 26, 2011 Red Mountain acquired 1,377,193 Cross Border Resources shares by issuing 2,754,386 of its own shares, taking its stake to 23.1%. This continues its build-up of the Cross Border position begun through Black Rock and the August purchase, paid for in new Red Mountain shares rather than cash, so existing holders are diluted. It agreed to register the resale of the issued shares by December 1, 2011.

capital raising announcement

On September 6 and 7, 2011 Red Mountain sold 2,500,000 and 3,350,000 shares ($5,850,000 in total) at $1.00 to accredited investors in its $25 million private placement, for general working capital. That brings the placement to 12,055,000 shares and $12,055,000 raised, continuing the fundraising that began in spring 2011. One investor was also given the right, until December 31, 2011, to buy a further $3,000,000 of shares at the lesser of $1.10 or a 10-day average closing price, which could add shares for existing holders to absorb.

capital raising announcement

On August 16, 2011 Red Mountain acquired a 100% working interest in the Martin Lease (320 acres, Andrews County, Texas) for 320,000 shares, and the Shafter Lake Lease (about 185 acres, same county, 75% net revenue interest) for $250,000 plus 250,000 shares. It also bought 218,535 Cross Border Resources shares for 273,169 of its own shares, adding to the stake gained via Black Rock. All share issues were private placements.

capital raising announcement

The Black Rock deal closed June 22, 2011: Red Mountain issued 27,000,000 restricted shares for 100% of Black Rock, of which StoneStreet Group (Alan Barksdale) received 18,000,000 (28.15% of Red Mountain), with lock-ups into 2012. Black Rock is treated as the accounting acquirer, so its history becomes Red Mountain's, and 225,000,000 shares held by former controlling shareholder Lisa Lamson were retired. The company now owns Black Rock's Madera assets in Lea County, New Mexico, Gulf Coast acreage in Duval and Zapata Counties, Texas, and about 13.3% of Cross Border Resources. The $5.75 million in loans to Black Rock was cancelled on closing.

business combination

The Black Rock acquisition was reported as completed under amended terms (27,000,000 shares), after the closing slipped from the May 30 target. First State Bank of Lonoke, Black Rock's lender, required conditions for loan assumption, including pledging Black Rock's shares, a new joint note for about $2.8 million tied to Bamco Gas, LLC (in receivership), and a pledge of two million Red Mountain shares by Black Rock holders. Black Rock also borrowed $2.5 million and holds 13% of Cross Border Energy, which it keeps.

material agreement

The Black Rock Capital acquisition (27,000,000 Red Mountain shares for all of Black Rock's equity, announced March 22) closed in escrow on April 29, 2011, pending final audits and bank approval of a loan assumption, with final closing set for on or before May 30. Red Mountain lent Black Rock $4.9 million, secured by a mortgage on the Madera Assets, to fund their purchase; the note is to be extinguished on completion.

material agreement

Red Mountain issued three non-interest-bearing promissory notes (Feb 18, Mar 16, Apr 19, 2011) for $212,500 in cash, due June 30, 2011, with $162,500 held by non-affiliate shareholders. It also reported that its private placement (up to $25 million at $1.00 per share) had sold 5,000,000 shares for $5,000,000, held in escrow. This is early progress on the fundraising planned in the March filing.

material agreement

The company described itself, after its 25-for-1 forward split effective March 22, 2011 and an increase in authorized shares to 500 million common and 100 million preferred, as an oil and gas company still in the acquisition stage with no current revenue or production. It says it has signed a contract for Permian Basin properties and made an offer for Gulf Coast properties from a receivership (subject to court approval), and plans to spend up to $25 million in 2011, to be raised through a private placement. These are plans, not completed acquisitions.

asset acquisition disposition