STRIKER OIL & GAS, INC. company history: the story so far

History

Unicorp, renamed Striker Oil & Gas, bought a Louisiana oil field with Cornell-backed debt, twice loosened that debt's terms, and by March 2009 faced a default demand.

2004-2007: Clearing up the shares and borrowing to buy

The company, then called Unicorp, had ceased active operations in 1992 and filed some reports late. In October 2004 it finished processing a 100-for-1 forward split followed by a 1-for-2003 reverse split, approved in July 2001. Shares held in street name (through brokers) had not been processed because the NASD was not notified. For those holders the net effect was a 1-for-20 reverse split, with a new symbol, UCPI.

In August 2005 Unicorp agreed with Cornell Capital Partners to sell up to $10,000,000 of stock over time at 96% of the lowest closing bid. Cornell received 322,222 shares as a $300,000 commitment fee. The record for the following two years is quiet.

In May 2007 Cornell agreed to lend up to $7,000,000, with a $3,500,000 secured convertible debenture (a loan that can turn into shares) issued at closing. It converted at $0.50 per share, and Cornell received warrants (rights to buy shares) over 8,121,500 shares. The company pledged its assets as security. In June 2007, through its subsidiary Affiliated Holdings, it paid $1,300,000 cash for producing properties in Welsh Field, Louisiana: a 100% working interest in fifteen wells. Output was about 42 barrels a day from two active wells. The company said the purchase was funded from the debenture.

2008-2009: Concessions and default

In February 2008 the lender, now called YA Global, agreed to amended terms. Interest rose from 9% to 14%, maturity moved to December 31, 2010, and the conversion price fell from $0.50 to $0.15. The company had to pay $100,000 a month from March 2008 and a $1,300,000 balloon payment on December 31, 2009. Warrant prices were cut and new warrants over about 13.6 million shares were issued. Lower prices mean more shares could be issued. The filing was signed by Kevan Casey as CEO, which conflicted with earlier filings naming Robert Munn.

By mid-2008 the company was called Striker Oil & Gas. It said accounting errors on derivatives tied to the YA Global financing meant its 2007 report should not be relied on. The restated 2007 net loss was $1,946,768, against $1,423,363 first reported. That filing was signed by Steven Plumb as CFO.

In December 2008 the debentures were amended again. Three installments were pushed back to maturity, the conversion price was cut to $0.15, and the warrant price was cut to $0.10.

On March 27, 2009, YA Global said Striker was in default for missing the February 1 and March 1 payments and demanded full repayment. As of March 31, 2009, Striker said it was in preliminary talks with YA Global, which held a security interest in its assets. How the demand would be resolved was not stated.

Written from the 8 story beats below (2004 to 31 Mar 2009), which come from the company's own announcements and filings.

Beat by beat

The events that changed the company's story, in plain English, each written against everything known about the company at the time. The dot shows whether it was good, bad or neutral for shareholders.

2009

31 Mar
On March 27, 2009 YA Global (formerly Cornell) wrote that Striker was in default on its debenture for missing the principal and interest payments due February 1 and March 1, 2009, and demanded repayment of the full principal plus accrued interest. Striker says it is in preliminary talks with YA Global; YA Global holds a security interest in its assets. This follows the December 2008 amendment that had deferred earlier installments, and the filing does not say how the demand will be resolved.
debt financing

2008

30 Dec
On December 22, 2008 Striker amended its two Cornell debentures (originally $3,096,155 issued May 17, 2007 and $1,508,494 issued June 29, 2007). The November 1, December 1 and January 1 installment payments were pushed back to maturity, the conversion price was cut from $0.50 to $0.15, and the warrant exercise price was cut to $0.10 with an anti-dilution provision added. This is the second concession on this debt after the February 2008 amendment, and the lower prices could mean more shares issued if converted or exercised (inference).
material agreement
8 Aug
Striker Oil & Gas (the renamed Unicorp) said on June 27, 2008 that it had made accounting errors on derivatives tied to the YA Global financing, so its 2007 annual report and first-quarter 2008 report should no longer be relied on. The restated 2007 net loss is $1,946,768 versus $1,423,363 originally reported, and the 2007 loss per share is $0.10 versus $0.07. The filing says the statements were restated on July 2, 2008. It is signed by Steven M. Plumb as CFO, whereas Carl Chase was CFO earlier (inference: a CFO change; the filing does not say so).
financial restatement
26 Feb
On February 20, 2008 Unicorp amended its May 2007 financing with YA Global (the former Cornell Capital Partners). The note interest rate rose from 9% to 14%, maturity moved from November 17, 2009 to December 31, 2010, and the conversion price fell from $0.50 to $0.15. The company must pay $100,000 a month from March 1, 2008 plus a $1,300,000 balloon payment on December 31, 2009. Existing warrant exercise prices were cut (e.g. A-1 from $0.55 to $0.15, D-1 from $0.90 to $0.50) and four new warrants (A-2 to D-2) were issued for about 13.6 million shares in total, expiring May 17, 2012. For shareholders, the lower conversion and exercise prices mean more shares could be issued on conversion or exercise (an inference from the terms, not stated in the filing). The filing is signed by Kevan Casey as CEO, which conflicts with the earlier signs of Robert Munn as CEO.
material agreement

2007

22 June
Through its subsidiary Affiliated Holdings, Unicorp bought producing properties in Welsh Field, Jefferson Davis Parish, Louisiana, for $1,300,000 cash ($500,000 from Miss-Lou Petroleum and $800,000 from Plymouth Resource Group II). It gets a 100% working interest and 75% net revenue interest in fifteen wells. A press release says output is about 42 barrels a day gross from two active wells, calls this its largest producing-property purchase, and says it was funded from the Cornell debenture.
asset acquisition disposition
21 May
On May 17, 2007 Unicorp signed a deal with Cornell Capital for up to $7,000,000 of loans, with a $3,500,000 secured convertible debenture issued at closing and another $3,500,000 possible later. The debenture converts at $0.50 per share (reset downward if shares are later sold lower) and matures November 2009. Cornell also received warrants over 8,121,500 shares at $0.55 to $0.90, and the company pledged a security interest in its assets. Late registration could trigger penalties of 1% a period up to 12%. Conversion and warrants could dilute shareholders (inference).
capital raising announcement

2005

15 Aug
On August 8, 2005 Unicorp agreed with Cornell Capital Partners to sell up to $10,000,000 of common stock over time at 96% of the lowest closing bid, with Cornell keeping 5% of each advance. Advances are capped at $2,000,000 per five business days and depend on an effective registration statement. Cornell received 322,222 shares ($300,000) as a commitment fee, and the placement agent Monitor Capital received 11,111 shares. Selling shares this way may dilute existing holders (inference).
capital raising announcement

2004

12 Oct
Unicorp said it is finishing a 100-for-1 forward split followed by a 1-for-2003 reverse split that was approved and effected in July 2001 for shareholders of record. Shares held in street name were not processed until October 2004 because the NASD was not notified. The net effect for street-name holders is a 1-for-20 reverse split, with a new symbol UCPI and CUSIP 904661 60 0.
security holder rights change