Santa Fe Petroleum, Inc.

The company reported issuing about 38.7 million new shares between December 2013 and February 2014. Roughly 10 million went to JMJ for converting only about $21,620 of the $335,000 note in four conversions, at about $0.0016 to $0.004 per share, far below the $0.30 cap in the note. The rest went for debts and services: 20,000,000 shares to settle an $80,000 payable, 7,700,000 for consulting valued at $30,800, 840,000 for legal services valued at $3,360, and 100,000 for consulting valued at $5,000. This confirms the dilution risk flagged when the JMJ note was signed: against 39.5 million shares outstanding in 2012, the issuances in this filing alone are large. The filing gives no total share count, and it has some date oddities (it refers to a September 30, 2014 10-Q and lists one issuance as December 27, 2014), which look like typos but are not explained.

capital raising announcement

On April 17, 2013 the company sold a convertible note to JMJ Financial with a face value of up to $300,000 for up to $335,000 total consideration; only $50,000 was to be paid at closing, with further payments at the lender's sole discretion. The note matures one year from each payment and can be converted at the lesser of $0.30 or 60% of the lowest trade price in the prior 25 trading days, which could mean heavy dilution if the share price falls; the company must reserve 6,000,000 shares. If not repaid within 90 days, a one-time 12% interest charge applies. The filing is tagged as an auditor change, but its text covers only this financing and shows no auditor change. It is signed by Griffin as Chairman, Principal Executive Officer and Acting Principal Accounting Officer.

auditor change

The filing reports that the Focus Capital Group agency agreement for the up-to-$5 million private placement at $0.50 per share expired on November 8, 2012 without further extension. It states the company received $243,573 net ($403,525 gross less $159,952 of expenses), which resolves the earlier open question of how much the placement raised: far below the $5 million target. It also restates the April 11, 2012 letter of intent behind the reverse merger.

capital raising announcement

On February 11, 2013 the company agreed to acquire mineral leases in Comanche and Brown counties, Texas from Long Branch Petroleum LP (the related Land Bank owner), paying with six unsecured convertible notes totaling $444,148. The notes carry no interest, are due in 14-15 months, and can be converted into shares at $0.25 per share (below the $0.50 placement price). $200,000 of the total went to five individual or trust note holders ($37,500, $75,000, $37,500, $25,000, $25,000) who also settled and ended their earlier participation agreements; three of them get a 2% net revenue interest in the leases. Long Branch's note is $244,148. The company also hired Merriman Capital as non-exclusive financial advisor for 12 months, giving it 100,000 restricted shares plus an 8% fee on capital it raises. This continues the Land Bank lease buyout thread; the filing does not say how it relates to the earlier 50% annualized return buyout formula.

capital raising announcement

Amendment No. 4 to the May 2012 share exchange report was filed to answer SEC staff comments and to add disclosure about the termination of certain lease acquisition agreements that happened after the original filing. The deal terms are unchanged (33,478,261 shares, warrants for 6,764,856 shares at $0.50). The excerpt does not say which agreements ended or on what terms, but this may bear on the earlier obligation to buy out the Land Bank leases (an inference, not stated in the visible text).

business combination

On October 3, 2012 the company issued a press release announcing the closing of initial financing from its private placement, with plans for using the initial funds. This resolves the open question of whether the private placement had begun raising money. The filing text gives no amount raised, so how much came in is not stated. The release also says the FINRA name change to Santa Fe Petroleum, Inc. took effect September 20, 2012.

capital raising announcement

This amends the May 2012 share exchange report. It restates the same terms: 33,478,261 shares and warrants for 6,764,856 shares at $0.50 for three years. It gives the closing date as May 20, 2012 (the original said May 10), and says the name changed from Baby All Corp. to Santa Fe Petroleum, Inc. on May 17, 2012. It describes the main asset as an unevaluated oil and gas property in Comanche County, Texas, and says Griffin, Hall and Nelson together own 72.2% of the stock. It also says the earlier infant medicine dispenser business plan never began operating.

business combination

Shell company Baby All Corp. (the registrant that later became Santa Fe Petroleum, Inc.) took over Santa Fe Operating, Inc. (SFO), an oil and gas exploration company, in a share exchange dated May 10, 2012. Former SFO holders received 33,478,261 shares (about 84.8% of the 39,478,261 shares outstanding) plus warrants for 6,764,856 shares at $0.50. The filing says control changed, with Tom Griffin as chairman and president and Bruce Hall as CEO and CFO. It also describes a planned private placement of up to $5.0 million at $0.50 per share, with none raised yet, and 'Land Bank' lease arrangements with entities tied to Mr. Griffin, which the company must buy out within 20-24 months. This starts the oil and gas story and replaces the earlier shell-company registration history.

business combination