Stratex Oil & Gas Holdings, Inc.

Stratex Oil & Gas Holdings, Inc. suspended its duty to file periodic reports with the SEC.

listing compliance notice

On October 27, 2015 Stratex received notices of default and acceleration on its Series A and B notes, declaring all obligations immediately due, demanding default-rate interest on late payments, and demanding that asset sales outside the ordinary course stop. It also received a default and acceleration notice on a separate $3,194,972 convertible promissory note. Separately, on October 23 it agreed to issue 5,390,000 unregistered shares at $0.01 to Eureka Petroleum for consulting on acquiring 300 barrels of oil per day. This continues the missed-interest thread: the lenders, who hold a first lien on substantially all assets, have now accelerated the debt, and the shares issued add dilution.

capital raising announcement

Stratex said it will not pay the quarterly interest due October 12, 2015 on its 12% senior secured notes: $302,092 on the Series A notes ($9,987,650 principal, due Feb 11, 2016) and $242,413 on the Series B notes ($8,014,560 principal, due June 6, 2016). It does not know when it can pay and is in discussions with the holders. No default notice had been received as of October 14, but the notes allow the rate to rise to 18% and the principal to be accelerated, and they are secured by a first lien on substantially all assets. The Series A principal is now $9,987,650, up from the $6,842,650 in earlier records.

debt financing

Stratex says its 2014 financial statements in the Form 10-K/A filed July 17, 2015 cannot be relied on. The amendment revised 2014 proved reserve figures using a July 7, 2015 reserve report and included reproduced predecessor auditor reports without telling those auditors or the current one. A predecessor auditor found on July 21 that required audit procedures were not complete and that the 2014 audit report date had been changed. Until those procedures are done, no authorized audit reports exist for those statements. This continues the auditor turnover and is a serious reporting problem; the filing does not give corrected numbers.

financial restatement

On April 17, 2015 Mantyla McReynolds resigned as auditor, only about four months after being appointed. Its 2014 report included a going-concern qualification, and the filing mentions material weaknesses in internal control over financial reporting. It reports no disagreements. The filing does not give a reason for the resignation.

auditor change

On December 1, 2014 the Richfield merger closed: Richfield became a wholly owned Stratex subsidiary after Richfield holders approved it on November 24, 2014. Each Richfield share became one Stratex share, about 60,616,448 Stratex shares in total, which dilutes existing Stratex holders. Richfield's former CEO Michael Cederstrom became Stratex's Vice President of Corporate Affairs (two-year term, $230,000 first-year salary, 400,000 shares due by February 15, 2015), and two former Richfield directors, Joseph Tate and John McFadden, joined the board, which grew from four to six. This resolves the merger thread; the company's address moved to Salt Lake City.

asset acquisition disposition

Stratex filed Amendment No. 1 to its Form S-4 for the Richfield merger. It sets a Richfield stockholder meeting for November 24, 2014 (record date October 14, 2014) and says the 60,616,448 Stratex shares would work out to one Stratex share per Richfield share, based on Richfield shares outstanding on September 29, 2014. The filing is still preliminary and not yet declared effective. This continues the merger thread and fills in the meeting date left blank in the August filing.

business combination

On September 8, 2014 Stratex signed a joint development agreement with Eagle Oil & Gas and Eagle Dodge City Partners covering about 35,000 acres in Ford County, Kansas. Stratex must pay 75% of drilling and completion costs for four initial wells to be operated by Eagle, with drilling to start by December 8, 2014 on a commercially reasonable efforts basis. In return it gets 50% of net revenues, and a 50% working interest on the acreage is assigned as wells are completed, with up to 16 further wells possible. The press release (company's view) describes it as a Mississippian Lime play; this is a new Kansas thread.

material agreement

Stratex filed its Form S-4 registering up to 60,616,448 Stratex shares for the Richfield merger. The merger agreement was amended July 17, 2014, and Richfield holders would collectively receive a fixed 60,616,448 Stratex shares (about one Stratex share per Richfield share, subject to adjustment). The filing is preliminary: the meeting date and other details are blank, the SEC has not declared it effective, and Richfield holders must still vote. This moves the May merger forward and would add a large number of shares.

business combination

On August 20, 2014 Stratex sold a further $374,500 of Series B notes with warrants for 249,665 shares at $0.30, bringing Series B gross proceeds to $8,014,560. The placement agent has received $711,755 and warrants for 2,372,517 shares. Separately, to meet a Richfield merger condition, the board issued 7,000,000 common shares to Rotary Partners LLC, wholly owned by CEO Stephen Funk, in exchange for all 60 outstanding Series A Preferred shares (each carried 1,000,000 votes). This removes the super-voting preferred stock but adds 7,000,000 common shares.

capital raising announcement

On July 2, 2014 Stratex sold another $2,376,625 of Series B notes on the same terms (12%, due June 6, 2016, convertible at $0.30), with warrants for 1,584,417 shares. Series B gross proceeds reach $5,409,485 so far; the placement agent has been paid $478,448 and holds warrants for 1,594,827 shares. This extends the June raise and adds more debt and potential dilution.

capital raising announcement

On June 6, 2014 Stratex sold $3,032,860 of 12% Series B senior secured convertible notes due June 6, 2016, convertible at $0.30 per share, with warrants for 2,021,957 shares at $0.30. The placement agent got a $250,786 fee and warrants for 835,954 shares. The notes share an equal first lien with the Series A notes; this follows the February-March Series A raise and adds debt and potential dilution. The filing does not state the use of proceeds.

capital raising announcement

On May 6, 2014 Stratex agreed to acquire Richfield Oil & Gas Company by merging a Stratex subsidiary into it; Richfield holders would get Stratex shares (1.009 Stratex shares per Richfield share on the May 6 share count, subject to downward adjustment if more Richfield shares are issued). Stratex also agreed to lend Richfield up to $3,000,000 at 6% (due by the earlier of Nov 30, 2014, ten business days after closing, or a superior offer). Closing needs Richfield holder approval, an effective Form S-4, and exchange of Stratex's Series A Preferred for 7,000,000 common shares; Richfield needs Stratex to have $5,000,000 cash. Fees of $3,000,000 (Richfield) or $1,000,000 (Stratex) apply in certain terminations, and holders of about 46% of Richfield have agreed to vote for the deal. Richfield's former chairman is Alan Gaines, the same person who has the Stratex consulting deal. This is a major new thread and would dilute existing Stratex holders.

business combination

From February 11 to March 13, 2014 the company raised $6,842,650 selling 12% senior secured convertible notes due February 11, 2016, secured by a first lien on substantially all assets and convertible at $0.30 per share. Investors also got warrants for 4,561,728 shares at $0.30, and the placement agent received a $382,765 fee plus warrants for 1,275,900 shares. This is the company's first identified debt facility and adds both debt and potential dilution; the filing does not state the use of proceeds.

capital raising announcement

On January 24, 2014 the Eagleford joint development agreement was amended: the company received an immediate 50% working interest and operating rights over the whole lease, now stated as about 2,629 acres, in return for committing to frac the Matthews #1H or spud a new well by March 31, 2014. If it doesn't, the lease and its interest become void. The press release says Baker Hughes was contracted to start the frac on February 16, 2014, cites a Ryder Scott best estimate of 6.9 million recoverable barrels of contingent resources (8/8ths basis), and announces a new Houston office.

material agreement

On December 3, 2013 the company signed a joint development agreement with Eagleford Energy and its subsidiary for about 2,549 leasehold acres in Zavala County, Texas. It must frac the Matthews #1H well by March 31, 2014 and pay all related costs (press release estimates up to $2.0 million), earning a 66.67% working interest in that well (50% after payout) and a 50% interest in the whole acreage once the work begins. It agreed to pay $300,000, of which $200,000 was paid by December 4 and $100,000 is due by December 31, 2013, funded from cash on hand.

material agreement

The company's subsidiary bought a 64% working interest (48.64% net revenue interest) in an approximately 60-acre oil property in Callahan County, Texas from Mesa Resources, paying cash and 150,000 company shares; the purchase closed November 26, 2013 and was paid from existing cash. The filing text gives the cash as $300,800 while the attached press release says $308,800. Mesa gets a 12.5% back-in interest after payout. The press release says the area could become a new core focus area, which is the company's own view; this is its first Texas asset in the history seen so far.

asset acquisition disposition

On August 28, 2012 the company announced an offer to buy Magellan Petroleum (NASDAQ: MPET) at $2.30 per share in cash and stock, about $124 million in total, which it describes as a 137% premium to Magellan's prior closing price of $.97. The company says it has committed financing for the cash portion; the offer was made by letter and no formal tender offer has started, and Magellan's response is not stated. This is a first, ambitious step beyond the just-completed merger, and the company's own risk language notes it may not pursue a transaction.

business combination

On July 6, 2012 the company (formerly Poway Muffler and Brake, Inc., renamed Stratex Oil and Gas Holdings on May 25, 2012) acquired Stratex Oil & Gas, Inc. by merging a subsidiary into it, so it now runs Stratex's oil and gas business as a wholly-owned subsidiary. Stratex shareholders received about 33,372,550 new common shares (2-for-1 conversion) and pre-merger holders kept 6,110,000 shares; Stephen Funk and Timothy Kelly became directors and the old sole officer/director, Alan Ligi, resigned. The old business was split off to Ligi in exchange for cancelling part of a loan he was owed ($79,687). This ends the shell's earlier life and replaces its history with Stratex's.

business combination