Each one in plain English, with the numbers worked through for a shareholder.
3 Aug 2022auditor change▼ BadMajor
Auditor MaloneBailey resigned on July 28, 2022, only about 19 months after being hired. The company says it is delinquent on its annual report for the year ended June 30, 2021 and on quarterly reports through March 31, 2022, and has announced no timetable to catch up. It says it continuously weighs the cost and benefit of staying a public OTC-Pink company and would strongly consider re-engaging MaloneBailey once it sets a timetable. No disagreements with the auditor were reported. For shareholders, no current audited financials are available.
On March 30, 2022 RedHawk announced it agreed to offer vacuum blood collection tubes for sale, which are also used to transport COVID-19 test specimens. The filing is mostly a product description and gives no price, quantity, counterparty or revenue figures. This extends the medical products business alongside the February 2022 COVID test kits.
On March 9, 2022 RedHawk Land & Hospitality sold its commercial property on Jefferson Street in Lafayette, Louisiana, leased to the 3rd Circuit Court of Appeals, for $450,000 gross. Proceeds paid closing costs, repaid a real estate loan of about $185,000 plus interest, and added working capital. Together with the June 2021 Youngsville sale, this is a second property sold, mostly to retire the loans on it.
On February 21, 2022 RedHawk announced it now offers for sale FDA Emergency Use Authorized COVID-19 lab (PCR) test kits and home antigen test kits. The purchase agreement is subject to inspection, testing and acceptance and can be cancelled on material adverse market changes or if the manufacturer loses its FDA authorization. The filing gives no price, quantity, counterparty name or revenue figure. This adds a new product line to the company's medical products business.
The Schreiber dispute is settled. After the Louisiana court ordered payments of $101,490.27 (Sept 2021) and $85,035.64 (Jan 2022) and the company appealed to the 5th Circuit, on February 16, 2022 the company agreed to pay Schreiber $150,000 in total ($28,195.56 by wire plus release of the $121,804.44 bond) with mutual broad releases. The company says that, once the court dismisses the case with prejudice, this should end the matter, resolving the interest and attorneys' fees appeal open since 2020.
25 June 2021asset acquisition disposition● Neutral
On June 24, 2021 RedHawk Land & Hospitality sold its former corporate headquarters on Chemin Metairie Road in Youngsville, Louisiana for $256,000 gross. Proceeds paid closing costs, paid off a $180,000 real estate loan plus interest, and provided working capital. This is one of the company's real estate holdings sold, with the proceeds mainly retiring debt.
Auditor Postlethwaite & Netterville resigned on December 31, 2020, and the audit committee hired MaloneBailey on January 4, 2021 for the year ending June 30, 2021. P&N's reports for fiscal 2019 and 2020 carried going-concern doubt, and P&N told the company its internal controls were not adequate to produce reliable financial statements due to previously disclosed material weaknesses. The filing reports no disagreements with P&N. This continues the company's long-running going-concern doubt and its history of auditor changes.
On November 4, 2020 RedHawk agreed to buy 122,730,903 common shares from Beechwood Properties in exchange for 1,473 shares of 5% Series A Preferred Stock (stated value $1,133.81 each). Beechwood is solely owned by Chairman/CFO G. Darcy Klug, making this another related-party swap, following the October 2020 Series B exchange. The Series A converts into common at $0.015 after six months and carries 10 votes per underlying common share; completion is expected in the quarter ending December 31, 2020. The company says it wants the shares available for future issuance.
RedHawk agreed on October 6, 2020 to buy 124,849,365 of its own common shares from Beechwood Properties in exchange for 1,000 new shares of 5% Series B Preferred Stock (stated value $1,248.49 each). Beechwood is solely owned and managed by Chairman/CFO G. Darcy Klug, so this is a related-party deal. The Series B converts into common at $0.015 after six months and carries 10 votes per underlying common share; the company says holding the repurchased shares available for future issuance better positions it for growth. The purchase is expected to complete in the quarter ending December 31, 2020. This swaps common stock held by the insider for convertible preferred, and the filing does not say what the preferred would convert into in share terms beyond the formula.
The Schreiber settlement dispute has resumed: the Louisiana court granted Schreiber's October 2019 motion to enforce the settlement on July 16, 2020, and the company appealed to the 5th Circuit. The company paid the principal of the first $200,000 note on August 13, 2020 and prepaid the second $200,000 note on August 24, 2020, but disputes Schreiber's claims for interest and attorneys' fees, which the appeals court will decide. This partly contradicts the March 2019 settlement being the end of the matter, as amounts beyond principal remain contested.
On September 16, 2019 the company sold $500,000 of new convertible notes in a private offering: five-year, 7% interest paid semi-annually, convertible at $0.015 per share and secured by certain company real property. Buyers also got 10-year warrants for 12,500,000 shares at $0.01. The company says proceeds will retire existing debt and provide working capital, and it intends to offer a further $500,000 of notes, so conversion and warrants add dilution potential and real property is now pledged.
On July 19, 2019 the company and its medical subsidiary signed a two-year consultant agreement (auto-extending two years unless DPI gives notice) naming Dr. Drew Pinsky, through Drew Pinsky, Inc., exclusive spokesperson for the SANDD mini and SANDD Pro needle destruction devices (the Disintegrator assets bought in December 2015). He gets a 3% royalty on net sales (minimum $3.50 per mini and $13.50 per Pro), 68,700,000 shares within 30 days (about 5% fully diluted), and another 68,700,000 shares a year later unless notice not to extend is given. This brings notable dilution in exchange for marketing support.
24 June 2019capital raising announcement▼ BadMajor
On June 20, 2019 the company bought 113,700,000 of its own common shares from Beechwood (controlled by Klug) in exchange for 1,277 Series A Preferred shares and a warrant for 113,508,450 common shares at $0.005, expiring June 20, 2029. At the same time, holders of $574,250 of 5% convertible notes (including interest) converted them into 114,849,929 common shares. The common share count changes little overall, but Beechwood now holds more preferred stock (with ten votes per underlying common share) and a large warrant, adding to dilution potential and related-party concentration.
On March 22, 2019 the company, Beechwood and Klug settled the Louisiana and California lawsuits with former CEO Daniel Schreiber and his trust. Schreiber must hand back all his 52,377,108 RedHawk shares; RedHawk pays $250,000 in cash and issues two $200,000 non-interest notes due September 6, 2020 and September 5, 2021 (with a $15,000 late penalty and 18% interest if overdue). Klug and Beechwood pledged Klug's 1,000 Series B and 1,473 Series A shares and Beechwood's interest in Tower Hotels Fund 2014 as security, and RedHawk can buy out both notes for $300,000 within 180 days of the Security Agreement. This ends the dispute that began with the January 2017 suit, and the returned shares reduce shares held outside the company.
On December 22, 2017 the company issued an $81,500 12-month convertible note to EMA Financial at 10% interest, convertible after 180 days at a discount to market price, with proceeds meant to retire third-party debt. At the same time it agreed to buy back from Beechwood (owned by Chairman/CFO Klug, about 60% holder) the same number of shares as would be issued on conversion, paying with an $81,500 note to Beechwood at 5% due in three years and convertible into Series A after two years. The company says this removes about $153,000 of third-party debt and avoids a rise in shares outstanding; the benefit depends on the plan working as described, and it again involves a related party.
On December 11, 2017 the company completed a share transfer deal with Scarlett Pharma, Warwick Healthcare and their shareholders. Its UK subsidiary RedHawk Pharma took on about $370,000 of Warwick's obligations to EcoGen Europe in return for 247,269 EcoGen preference shares, 10,000,000 RedHawk shares surrendered by Scarlett and some cash from the shareholders. RedHawk Pharma now holds about $545,000 of EcoGen preference shares and 75% of EcoGen's common shares, and the 10,000,000 shares go back to the company's treasury; this follows the March 2016 initial EcoGen investment and the European pharmaceutical acquisition thread.
On July 25, 2016 the board dismissed its auditor Pannell Kerr Forster (PKF) and engaged Postlethwaite & Netterville (P&N) to audit the fiscal year ended June 30, 2016 and the five-month transition period ended June 30, 2015. The filing says there were no disagreements or reportable events with PKF; PKF's report for the year ended January 31, 2015 carried a qualified going-concern opinion. P&N had earlier audited select financial statements for the November 2015 commercial real estate purchase. This is another change in a long list of auditor changes, and it also shows the company has moved to a June 30 fiscal year end.
5 Jan 2016asset acquisition disposition● NeutralMajor
On December 29-31, 2015 the company completed several deals with Beechwood (owned by CFO G. Darcy Klug): 280,000 Towers Hotels Fund 2013 units for 625 Series A shares ($625,000), a Youngsville rental property for 300 Series A shares ($300,000), and about $1.86 million of cash and securities for 1,000 new Series B Preferred shares plus assumption of a Regions Bank line of credit (balance $980,000, matures September 2016). Beechwood also converted its $100,000 line of credit into 100 Series A shares. Separately, the company acquired the Disintegrator needle destruction unit and Carotid Artery Non-Contact Thermometer assets from Big Horse Holdings and Jason Roth for 60,000,000 restricted common shares, subject to product-development milestones. Series B converts after six months at $0.01 per share; the press release says Beechwood owns about 55.8% of the common stock. This continues the move into real estate and medical devices, with heavy dilution potential and related-party concentration.
19 Nov 2015asset acquisition disposition● NeutralMajor
The company created a Series A 5% Convertible Preferred Stock (2,000 shares authorised; convertible after six months at $0.015 per common share; ten votes per common share into which it converts). It bought commercial real estate for $480,000 from Beechwood Properties, an entity controlled by CFO G. Darcy Klug, by assuming a $265,000 bank loan (5.95%, matures June 2021) and issuing 215 Series A shares. It also set up a $100,000 related-party line of credit with Beechwood (5%, due October 31, 2016, convertible into Series A). The quarter to September 30, 2015 showed a net loss of $108,404 versus $46,171 a year earlier. Related-party dealings and the convertible preferred create dilution and conflict-of-interest considerations.
On October 15, 2015 the company sold 5,000,000 common shares to one accredited investor for $50,000 cash ($0.01 per share, calculated from the filing's figures). The new shares dilute existing holders.
19 Aug 2015asset acquisition disposition● NeutralMajor
The company's interests in four Pottawatomie County, Oklahoma wells were assigned to operator Nitro Petroleum for $10, with Nitro taking over all liabilities under the joint operating agreement, including $57,628 of accrued expenses. This completes the exit from oil and gas; the wells were already reported as discontinued operations. A press release reports a net loss of $105,614 for the five months to June 30, 2015, says the name will change to RedHawk Holdings Corp. (symbol HAWC), and describes targeted acquisitions (Lafayette, Louisiana property and an interest in the Naniloa Hilo Resort in Hawaii) that remain subject to due diligence and approvals. David Kleinhandler was appointed a director, unpaid.
On April 21, 2015 the board dismissed Sadler Gibb, whose role was limited to reviewing the quarter ended October 31, 2014, and re-engaged Pannell Kerr Forster to audit the year ended January 31, 2015. The filing reports no disagreements. This is the third auditor change in under a year; the company's address is now in Youngsville, Louisiana and Daniel J. Schreiber signs as CEO.
On December 8, 2014 the board dismissed Pannell Kerr Forster, engaged only three months earlier, and engaged Sadler Gibb & Associates LLC for the year ending January 31, 2015. PKF's report on the three months to July 31, 2014 carried a going-concern doubt; PKF declined to provide the usual letter to the SEC, citing an outstanding account balance.
On November 12, 2014 the company sold 14,905,918 common shares plus warrants for up to 7,452,959 shares (exercise price $0.005, two years) to two accredited investors for $50,000, receiving $49,900 net. This is a large share issuance at a very low price relative to the 2012 sales at $0.90-$2.50, so it dilutes existing holders. The company also moved its address to St. Louis, Missouri.
On August 26, 2014 the board dismissed its auditor PLS CPA and engaged Pannell Kerr Forster of Texas for the year ending January 31, 2015. PLS's reports on the years ended January 31, 2014 and 2013 carried a going-concern doubt due to substantial losses; the filing says there were no disagreements with PLS.
The company reported that, effective April 1, 2014, all oil and gas leases on the 1,400-acre Coleman County South Property (received in the February 2013 settlement with MontCrest and Black Strata) have expired. Management chose not to renew them because of a recent Asset Purchase Agreement with American Medical Distributors, LLC and a decision to focus on a medical device distribution business; the company says it has no outstanding obligations under the leases or the settlement. This ends the Texas acreage and marks a shift away from oil and gas.
This amendment fixes the company name, which the original September 2013 report had wrong, to Independence Energy Corp. The terms of the $32,500 Asher note are repeated, with no new financing.
On September 23, 2013 the company closed a second note with Asher Enterprises: an 8% convertible note for $32,500 maturing June 19, 2014, convertible at 58% of market price, with 22% interest after maturity. The filing wrongly names the company as Liberty Energy Corp. and contains date typos ("20123"), which the company corrected in a later amendment.
Effective July 22, 2013 the company sold Asher Enterprises an 8% convertible note for $57,000, maturing April 17, 2014. After 180 days it can be converted into shares at 58% of the market price, and the rate rises to 22% after maturity, so conversion could dilute existing shareholders.
On April 5, 2013 the company issued a $46,000 convertible debenture to Europa Capital AG, paying 6% interest (minimum interest charge $8,280) and due in three years. It can be converted into shares at $0.01 per share, so it adds debt that could turn into shares at a price far below the $0.90 to $2.50 prices of the 2012 share sales.
