Each one in plain English, with the numbers worked through for a shareholder.
4 Dec 2006capital raising announcement▼ BadMajor
On December 1, 2006 the company completed the preferred stock raise: $37.0 million sold to an initial purchaser and $7.0 million to investors including the CEO and CFO, for about $41.2 million net. The new 15% preferred ranks ahead of common and the earlier Series A preferred, converts at $4.50 per share, and can be redeemed by holders on December 1, 2011 or on a change of control. The conversion price drops to $3.90 and the dividend rises 3 points unless a production or share-price target is met by mid-2007. Existing shareholders face potential dilution from conversion and in-kind dividends, and covenants restrict debt and payments. This completes the offering announced November 24.
24 Nov 2006capital raising announcement● NeutralMajor
The company announced it had started a private offering of $35 million of senior redeemable convertible preferred stock, plus a concurrent $7 million placement to investors including its CEO, CFO and two existing stockholders. The $7 million has already been received. Proceeds are intended for the accelerated development of the South Alibek Field, working capital and general purposes. Final terms were to be set at pricing. This is more funding on top of the 2005 and May 2006 note sales.
The company's auditor UHY Mann Frankfort Stein & Lipp resigned effective June 12, 2006 after its partners joined UHY LLP, a separate affiliated firm. The audit committee approved UHY LLP as the new auditor for fiscal 2006 on June 13. The filing states there were no disagreements, no reportable events, and no adverse or qualified opinions from the prior auditor.
The company amended its registration for swapping the privately placed 12% Senior Secured Notes due 2010 for identical registered ones. The amount rises to up to $290 million, covering the $250 million from December 2005 plus the $40 million added in May 2026 (sic: May 2006). The company receives no proceeds; the new notes differ only in lacking transfer restrictions and registration rights. The offer is not yet effective, and the expiry date is blank in the excerpt.
31 May 2006capital raising announcement● NeutralMajor
On May 26, 2006 the company sold a further $40 million of Senior Secured Notes due 2010 at 97% of face value, on the same terms as the $250 million issued in December 2005, and 1,818,182 common shares at $5.50 (about $10 million) to institutional investors. $3.6 million of proceeds is escrowed for interest on the new notes. Noteholders consented to amendments allowing the new notes and allowing up to $1 million of accrued dividends on the Series A preferred to be paid. The new shares add to the share count, and the company must register them for resale and issue extra shares if registration is late.
The company filed a registration statement on Form S-4 for an offer to swap up to $250 million of its privately placed 12% Senior Secured Notes due 2010 for identical registered notes. This fulfils the registration-rights promise made with the December 2005 note sale. The company receives no proceeds, and the new notes are substantially identical except for the removal of transfer restrictions. The excerpt does not give any financial or operating figures.
On February 13, 2006 the American Stock Exchange sent a warning letter because the company issued the one million Kornerstone shares in December 2005 without first getting AMEX approval; the stock carries a '.BC' noncompliance marker until this is fixed. The company has applied for listing of the shares and AMEX is not starting continued-listing proceedings at this time. The same filing's press release reports that four of seven producing South Alibek wells were shut in during extreme cold, with output about 1,200 bopd since late 2005 and expected at 2,500-3,000 bopd once work is finished; drilling of SA-11 and SA-12 began, and two more rigs are planned in the first half of 2006. It also says the Rig 232 lawsuit was fully settled, with about $1.8 million paid to the first lienholder plus $120,000 in legal fees. The shares trade on AMEX as TMY.
12 Jan 2006asset acquisition disposition● NeutralMajor
On January 9, 2006 a wholly owned subsidiary completed the purchase of Kornerstone Investment Group's 10% carried working interest in the South Alibek Field for $19 million: $15.25 million in cash plus one million company shares valued at $3.75 each. This completes the Kornerstone deal agreed in December 2005 and adds one million shares to the share count.
16 Dec 2005asset acquisition disposition● NeutralMajor
On December 12, 2005 the company's subsidiary Transmeridian Exploration Inc. (BVI) sold $250 million of 12% Senior Secured Notes due December 15, 2010, bundled with warrants for about 17.3 million company shares at $4.31, to institutional and accredited investors; $30 million of proceeds is escrowed for the first four quarterly interest payments. The notes are guaranteed by the parent and subsidiaries and secured by share pledges, with Bramex and Caspi Neft due to join as guarantors by January 3, 2006 or the notes must be redeemed at par and the warrants cancelled. The company also entered a December 13 purchase agreement with Kornerstone for its carried working interest in South Alibek (the text is cut off before the terms). This is the large new debt that follows the $22.5M short-term notes of August 2005; the filing does not say how the proceeds will be used, so whether it repays those notes or the Kazakh bank loans is not stated here. The warrants add potential dilution.
An amended version of the October 2005 auditor-change report. It extends the no-disagreement and no-reportable-event statements through October 19, 2005 (the original said June 30, 2005) and attaches Braden's updated letter dated October 25, 2005. The change to UHY is unchanged.
On October 19, 2005 the company dismissed its auditor John A. Braden and Company, P.C. (Audit Committee approved) and on October 20 engaged UHY Mann Frankfort Stein & Lipp CPAs, LLP. The filing says there were no disagreements and no reportable events. Braden's 2003 report had included a going-concern paragraph, citing cumulative net losses of $12,061,436 and current liabilities exceeding current assets by $29,850,854. This is the company's third auditor in this history.
The company's 50%-owned subsidiary Caspi Neft TME was told by its Kazakh bank that due dates under its main credit facility are extended to the regular payment dates on or after October 18, 2005. About $8.0 million of principal and interest due through August 31, 2005 had not been paid, and about $2.7 million more was due in September. The company says it has received a proposal to refinance all the bank debt and expects to complete it by mid-October 2005. This follows the February 2005 deferral to July 15, and the payments had still gone unpaid.
On August 30, 2005 the company issued $22,500,000 of 10% convertible notes, with warrants for 4,500,000 common shares at $2.40. The notes mature December 15, 2005 or at the closing of an equity financing, whichever is earlier. Proceeds are for general purposes, including repaying past-due and current amounts under the credit facilities of the company and its subsidiaries. This adds new debt and potential dilution.
On July 29, 2005 the company sold 882,000 common shares at $2.16 each, for $1,905,120, to non-U.S. investors under Regulation S. Proceeds are for general corporate purposes. New shares add to the share count.
What it means for a shareholder
882,000 new shares at $2.16 to raise about $1.9m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
The company's 50%-owned subsidiary OJSC Caspi Neft got its lender to push all principal and interest payments due between February and mid-July 2005 back to July 15, 2005. About $14.4 million of scheduled payments will fall due then. Transmeridian agreed to advance up to $10.0 million to Caspi Neft for its first-half 2005 capital needs. This is a deferral, not a reduction of debt.
15 Nov 2004capital raising announcement▲ GoodMajor
On November 12, 2004 the company raised $25,000,000 in cash by selling 1,785.714 shares of Series A convertible preferred stock at $14,000 each, with warrants for up to 4,464,286 common shares at $1.55. The preferred converts at $1.40 per common share and pays a 4.5% annual cash dividend. Proceeds are for general purposes, including development drilling in the South Alibek Field in Kazakhstan. Conversion and the warrants could dilute common shareholders, and the preferred ranks ahead of common on liquidation.
A second amendment to the May 2002 auditor report corrects the record: the new auditor named in May as Braden, Bennink, Goldstein, Gazaway and Company was in fact John A. Braden & Company, P.C., which was selected instead. This corrects the earlier filings.
On September 10, 2002 the company dismissed Braden, Bennink, Goldstein, Gazaway, PLLC, the auditor it had engaged in May, and engaged John A. Braden & Company, P.C. instead. The filing says the decision was approved by management, the Audit Committee and the Board. This is the second auditor change in about four months. The former firm's letter agrees with the company's statements.
An amended version of the May 2002 auditor-change report. It extends the no-disagreement statement through May 15, 2002 and adds that the quarter ended March 31, 2002 was reviewed by the new auditors, not Grant Thornton. The change itself is unchanged.
On May 15, 2002 the company dismissed its auditor Grant Thornton LLP and engaged Braden, Bennink, Goldstein, Gazaway and Company, PLLC. Grant Thornton's reports on 2001 and 2000 had included a paragraph about uncertainty over the company's ability to continue as a going concern. The filing says there were no disagreements with Grant Thornton.
Transmeridian agreed with Emba Trans Ltd. to buy a 25% interest in the Emba Trans crude oil rail terminal in exchange for 4,000,000 restricted common shares, plus an exclusive option to buy another 25% within 180 days. The terminal is about 40 miles by road from the South Alibek field and is expected to start receiving crude from it in late August 2002, first by tank truck. The company also moved its headquarters to new 6,500 sq ft offices at 397 N. Sam Houston Pkwy. E., Houston. Issuing 4,000,000 shares for the stake adds to the shares outstanding.
