Each one in plain English, with the numbers worked through for a shareholder.
8 June 2007bankruptcy or receivership▼ BadMajor
The company is in default on the October 2005 convertible notes. Three lenders holding $950,000 of the $3,430,000 raised filed a claim in US Bankruptcy Court (Central District of California), and a settlement all lenders accepted was reached. It sells the company's 40% North Franklin gas field interest for $3,100,000 and repays $2,470,000 of the roughly $3,429,885 owed. The rest becomes convertible into shares at a deemed $0.04, and 12,500,000 warrants are re-priced to $0.04, so dilution is likely to be large versus the earlier $0.315 conversion price. No resale registration statement will be filed, which resolves that open thread. The company also agrees to lend MB Gas Inc. (private, Alberta) $500,000 to $1 million for 12.5% of MB's revenue until payout, then 5% to 10%.
On April 7, 2006 the company agreed to issue shares to directors as consulting pay: 1,000,000 to Gordon Samson, 2,000,000 to Glen Harder, 3,000,000 to William Scott Marshall, and 2,000,000 each to CEO Robert McIntosh and CFO David Naylor (8,000,000 for Samson, Harder, Marshall, McIntosh and Naylor combined would be 10,000,000 in total). McIntosh and Naylor also have January 1, 2006 consulting agreements paying $20,000 and $15,000 a month. These share issues dilute existing holders and pay insiders. Marshall is the owner of 1048136 Alberta Ltd., the Kansas and Alberta partner.
On March 1, 2006 the company issued 1,200,000 restricted shares to a consultant. 600,000 are released when the shares list on the American Stock Exchange, and the other 600,000 are released at 1/6 per month while the agreement lasts. This adds to the share count, so existing holders are diluted slightly.
6 Feb 2006asset acquisition disposition● NeutralMajor
The company and three other sellers agreed on October 6, 2005 to sell their Joarcam-area (Alberta) petroleum and natural gas assets to EnerMark Inc. for CAD$4,208,000 cash; the sale closed December 6, 2005. The company's share was 66.5% of the first CAD$3,350,000, about CAD$2,227,750, and none of the remaining CAD$858,000. Director William Scott Marshall is president of seller Blue Scorpion. The filing also includes pro forma results without Joarcam, showing a 12-month 2005 net income of $856,416 including a $1,001,695 gain on disposal.
19 Oct 2005capital raising announcement● NeutralMajor
On October 14, 2005 the company closed $3,350,000 of senior secured convertible promissory notes, with an option for holders to buy up to $3,350,000 more. The notes pay 8% dividends (in cash or shares at the company's option) and convert at a fixed $0.315 per share, and investors also get five-year warrants at $0.63 per share. The company expects to use net proceeds for drilling costs and general working capital, which may help fund its share of the Kansas drilling program (an inference). Conversion and warrants could dilute existing shareholders.
Around August 10, 2005 the company signed a Data Sharing Agreement with 1048136 Alberta Ltd., Cascade Energy and Fidelis Energy, giving it a 20% interest (Cascade and Fidelis 25% each) in airborne magnetic survey data over about 1,000,000 acres in Kansas. The parties agreed to pay for acquiring up to two sections of land picked by Alberta and to fund a two-well drilling program in proportion to their shares, with Alberta as operator and no interest earned in the data until drilling. 1048136 Alberta Ltd. is the same counterparty as in the October 2003 Evi and Verdigris deals.
An amended version of the November 2004 Cornell Capital financing report. It lowers the price Cornell pays under the $10,000,000 equity line from 100% to 98% of the lowest volume weighted average price, and changes the debenture conversion price to the lesser of 120% of the closing bid price as of the date of the agreement or 80% of the lowest closing bid over the five days before conversion. This is more dilutive for shareholders than the original description. The exhibit list now names Silver Star Energy instead of Sonoran Energy.
9 Dec 2004capital raising announcement● NeutralMajor
On November 24, 2004 the company signed a Standby Equity Distribution Agreement letting it sell up to $10,000,000 of stock to Cornell Capital Partners at its discretion, but only after a registration statement is declared effective. It paid Cornell a $350,000 commitment fee in shares and received a $750,000 convertible debenture (5% interest, three years), with a second $750,000 tranche due on filing a registration statement. Shareholders face dilution if shares are sold or the debenture converts at a price tied to the market. The exhibit list names 'Sonoran Energy, Inc.' rather than Silver Star, which looks like a drafting error (an inference), and the next filing corrects it.
An amended version of the May 2004 auditor-change report. It now states the board decided to dismiss DMCL on April 30, 2004, and that DMCL's reports for 2003 and 2002 contained a going-concern uncertainty paragraph, with no disagreements. DMCL's letter again says it cannot confirm board ratification or Robison Hill's engagement on April 30.
The company said its auditor, Dale, Matheson, Carr-Hilton, Labonte (DMCL), would no longer represent it as of April 30, 2004, and that it engaged Robison Hill & Co. as the new auditor. DMCL's last report (January 18, 2004) carried a going-concern uncertainty paragraph, and DMCL's letter said it could not confirm that the board ratified the change or that Robison Hill was engaged on April 30.
An amended version of the December 2003 report on the Archer Exploration deals, with the same payment terms for North Franklin and Winter Pinchout. It adds that the company is also responsible for lease, drilling and completion costs and (for Winter Pinchout) a monthly management fee beginning January 2004 (the text reads '$10,0000', so the exact amount is unclear). It also states that drilling of the first North Franklin test well is expected to start in the second quarter of 2004 and a 3-well Winter Pinchout program is planned for the quarter ending September 30, 2004. It repeats that the company lacks the funds on hand to meet its obligations.
23 Dec 2003asset acquisition disposition● NeutralMajor
Now named Silver Star Energy and based in Los Angeles, the company signed two December 5, 2003 agreements with Archer Exploration, Inc. to earn interests in the North Franklin prospect and the Winter Pinchout project in California's Sacramento Basin. It would pay Archer $85,000 and $100,000 on signing respectively, plus further payments tied to drilling, and can earn 100% of each if it completes its funding; the filing says it lacks the funds on hand to meet these obligations. Directors Jamie Cirotto and Carmelo Mamertino resigned effective December 17, 2003; this follows the October 2003 Alberta prospect agreements, though this filing does not say what became of those.
The company (then Movito Holdings Ltd.) sold its wholly owned subsidiary 657333 B.C. Ltd., which held its automated teller machine (ATM) transaction-processing business, to Adil Dinani for $25,000 cash; the sale closed October 28, 2003. The filing says it sold because the business did not generate significant profit, with net revenues of $7,761 in the six months to June 30, 2003.
13 Nov 2003asset acquisition disposition● NeutralMajor
Under two agreements dated October 29, 2003 with 1048136 Alberta Ltd. (owned by Scott Marshall), the company (then named Movito Holdings Ltd.) gained the right to earn a 66.67% working interest in the Evi prospect (by advancing $2,000,000 in four $500,000 payments, Feb 1 to May 1, 2004) and in the Verdigris prospect (by advancing $1,500,000 in three $500,000 payments, Feb 1 to Apr 1, 2004), both in Alberta. The filing says the company does not currently have the funds to meet these obligations, and it earns nothing if it misses a payment.
