This amendment covers agreements signed February 26, 2015 (amended March 3) with Lucas Energy ahead of the proposed combination. Victory agreed to lend Lucas up to $2 million ($250,000 drawn February 26, 2015, secured by 1,100,655 pledged Lucas shares, maturing February 26, 2016). In return Lucas assigned rights to seven wells to a Aurora subsidiary, which keeps them even if the deal fails. Victory also gave Lucas's senior lender, Louise H. Rogers, a $250,000 contingent note at 18% interest, payable if the deal ends or the well funding requirements are not met. The amendment itself was filed to mark the filing as merger solicitation material and add required disclosures, and it says a registration statement and proxy will be filed.
On February 4, 2015 Victory announced a letter of intent for a proposed business combination with Lucas Energy, Inc. The filing gives no terms, price or share exchange details, only that a press release (not included in the text provided) was issued. This is a new, non-binding proposal and would change what shareholders own if completed.
On September 23, 2014 Aurora and TELA mutually terminated the Fairway purchase agreement, so the second closing (the ~$3.3 million balance) will not happen because of title impairment issues found in due diligence. Only the first closing stands: a 10% working interest and 7.5% net revenue interest in about 2,180 gross acres in Glasscock and Howard Counties, against the 4,530 acres first planned. No penalties or payments were due, and the press release says Aurora keeps a 10% interest in the Taree 193-1 well with no closing date set. This scales back the acquisition announced in July 2014.
8 July 2014asset acquisition disposition▲ GoodMajor
On June 30, 2014 Aurora (50% Victory, 50% Navitus) agreed to buy a 10% interest in oil and gas assets of the Fairway Project in the Permian Basin from TELA Garwood Limited, LP for about $5.8 million. About $2.5 million was paid at the first closing on June 30 for a 10% working interest in the Darwin, BOA and Wagga Wagga leases and other leases; the remaining ~$3.3 million is due at a second closing planned for about July 31, 2014, subject to lease conveyances and customary conditions. The company's press release says the deal adds about 64 BOE per day and about 40 drilling locations. This is the first acquisition after the June 2014 Glasscock sale; the filing does not say how it is funded.
11 June 2014asset acquisition disposition▲ GoodMajor
On June 5, 2014 Aurora sold its leasehold interests in about 640 gross (128 net) mineral acres in Glasscock County, Texas to an unrelated buyer for about $4 million in cash gross to Aurora, under an agreement dated April 30, 2014. Aurora has customary post-closing indemnification obligations. The filing does not say how the proceeds will be used or what share goes to Victory.
26 Feb 2014capital raising announcement● NeutralMajor
On February 20, 2014 Aurora (50% Victory, 50% Navitus) signed a revolving credit agreement with Texas Capital Bank for up to $25M, but the initial borrowing base is only $1.45M and $868,000 was drawn on February 22. It matures February 20, 2017, is secured on the oil and gas properties and the Aurora interests, and is guaranteed by Victory and Navitus. Navitus is raising $10M from private investors to put into Aurora in tranches (up to $15M under the partnership agreement), with a 10% preferred distribution for five years and one warrant on Victory stock per dollar invested. The filing also puts shares outstanding at about 27.56M held by about 1,430 holders, with 47.5M common shares authorized. This ends the company's debt-free position of March 2012, though the debt sits at Aurora with a Victory guarantee, and Navitus funding is described as being raised, not yet delivered.
This amendment repeats the November 2013 switch from Marcum back to Weaver and Tidwell and adds Marcum's letter dated December 2, 2013 as an exhibit. The text of the letter is not included here and no new facts are added.
On November 20, 2013 Victory dismissed Marcum and re-engaged Weaver and Tidwell, the firm it had dismissed in August 2012. The filing says Marcum's reports on 2011 and 2012 carried a going-concern paragraph and there were no disagreements, and Marcum noted internal-control weaknesses. It gives no reason for the switch. This is the third auditor change in about 17 months.
On July 9, 2013 Victory appointed Marcum LLP, the firm that absorbed WilsonMorgan, as auditor for the year ended December 31, 2012. This follows WilsonMorgan's resignation.
WilsonMorgan resigned on June 27, 2013, saying it no longer wanted to provide audit services as part of its strategic plan and was merging with a third party (Marcum LLP, completed July 1, 2013). The 2012 10-K had still not been filed, and the restatement is still pending. Management also reports two material weaknesses in internal controls, including a lack of segregation of duties.
On March 25, 2013 Victory said its 2011 10-K and the 2012 quarterly reports (March, June, September) should no longer be relied on, because Navitus's 50% non-controlling interest in Aurora was not shown on the face of the financial statements. The company will restate in its 2012 10-K and estimates that total assets, liabilities and equity will not change, but that net loss per share will improve. This is the same issue Weaver raised in 2012, which the company had resisted then.
On August 3, 2012 Victory dismissed Weaver and Tidwell, only about six weeks after hiring it, and re-engaged WilsonMorgan. The company says Weaver disagreed with it over showing Navitus's non-controlling interest in the financial statements, and the company dismissed Weaver because it feared missing its SEC filing deadline. Weaver's letter says Aurora (50% owned) was reported at 100% of earnings, losses and equity, which it believes does not comply with accounting rules, and that its dismissal resulted from this disagreement. This reverses the June 2012 change and opens an accounting-presentation dispute over the Aurora partnership with Navitus.
This amendment repeats the June 18, 2012 switch from WilsonMorgan to Weaver and Tidwell and adds WilsonMorgan's letter (dated July 5, 2012) agreeing with the company's disclosures. It adds no new facts about the company.
On June 18, 2012 Victory dismissed its auditor WilsonMorgan (hired Jan 2011) and engaged Weaver and Tidwell. The filing says WilsonMorgan's 2011 and 2010 reports carried a going-concern uncertainty and that there were no disagreements. No reason for the change is given.
Through its Aurora Energy Partners partnership, Victory sold its interests in the Jones County Oil Play (5% working interest) and the Atwood Secondary Oil Recovery project (2% working interest) for $400,000 in cash. Half was received in May 2012 and $200,000 is due in July 2012. Victory expects a pre-tax gain of $267,000 in second quarter 2012. Management says it plans to put the money to work at its Lightnin' prospect.
The debenture private placement that began Sept 15, 2010 closed on Jan 31, 2012 having raised $5,777,275 in principal, $1,830,000 of it in January 2012. All remaining debenture holders agreed to convert to common shares effective Feb 29, 2012, so the company states it has no debt on its balance sheet as of March 1, 2012. Debt converted in 2011 and 2012 totaled $6,024,509 including interest. This resolves the convertible debenture thread, and the shares replace the debt as dilution. The press release also mentions a 50:1 reverse split, a new CFO and a new CEO, Kenneth Hill.
9 Dec 2011asset acquisition disposition▲ GoodMajor
On Dec 6, 2011 (effective Oct 1, 2011) Victory signed a second amended agreement for the Aurora Energy Partners partnership, bringing in The Navitus Energy Group in place of James Capital Consulting and James Capital Energy. Victory's share of Aurora profits and losses rises from 15% to 50%, with Navitus holding the other 50%. Navitus may, at its option, provide up to $15,000,000 of funding, which carries a 10% preferred return and warrants or convertible debenture terms, so it is not committed money. Several 2007 agreements, including the Fund Agreement and the Zamber letter agreement, were terminated without penalty. Director Ronald Zamber is a member of both James Capital entities, and director Dave McCall's firm is counsel to both Victory and Navitus.
Under an agreement dated Dec 31, 2010, Visionary Investments, whose sole member is director and major stockholder Ronald Zamber, swapped $497,000 of unsecured notes plus $55,275 of interest for a $552,275 10% secured convertible debenture due Sept 30, 2013. It converts at $0.005 per share into 110,455,000 shares, which would be a large dilution for current holders. It uses the same terms as the ongoing debenture offering.
On Jan 19, 2011 Victory sold six units for $60,000 to one accredited investor. Each unit was a $10,000 10% convertible debenture (due Sept 30, 2013) plus a warrant for 10,000 shares at $0.005. The debentures convert at $0.005 per share. This is part of an ongoing 75-unit offering (45.5 sold so far, ending by March 31, 2011 unless extended). With about 136.7 million shares outstanding, full conversion and exercise of this investor's securities would lift the total to 148,779,608, which dilutes existing holders.
Victory's audit committee dismissed Hein & Associates on Jan 17, 2011 and hired Wilson Morgan, LLP. Hein, hired in March 2009, never began any audit or review work, and the filing reports no disagreements. The 2009 and 2010 financial statements had not been filed with the SEC.
This amended filing repeats the Padre Island option reported on Jan 4, 2011: a one-year option, for $25,000, to acquire an oil and gas lease from Santiago Resources and other optionors, with an option exercise price of $375 per net mineral acre. It adds that Tom McCall (Santiago) and his brother Dave McCall (1519 Partners) are both partners in The McCall Firm, Victory's Texas counsel that is prosecuting litigation for it. The option is not yet an acquisition.
Victory signed a one-year option for $25,000 to acquire an oil and gas lease on a mineral interest on Padre Island, Texas, from Santiago Resources and other parties. The press release describes a roughly 1,000-acre tract with three shut-in gas wells, and a planned 100% working interest and 75% net revenue interest if the lease is taken. Some optionors are tied to The McCall Firm, which is Victory's Texas legal counsel and is prosecuting litigation for it. The option is not yet an acquisition, and the press release cites the Adams-Baggett gas wells in Ozona, Texas as existing production.
On Aug 4, 2009 Victory signed an agreement, effective Aug 1, with Miranda & Associates, owned by interim CEO and CFO Robert Miranda, to keep supplying an interim chairman/CEO, a CFO and advisory services. It replaces a Nov 15, 2008 agreement and pays Miranda $300 per hour plus expenses.
Former CEO Jon Fullenkamp resigned from his posts under a May 15, 2009 separation agreement. The debt owed to him was cut from $1,014,000 to $500,000, to be repaid on a schedule, and he receives 10,000,000 shares owed under his 2005 employment agreement plus 1,000,000 shares in place of preferred stock that could not validly be issued. Director Ronald Zamber gets a five-year proxy to vote Fullenkamp's shares, and Fullenkamp must cooperate with a board committee investigation into matters the CFO raised on April 28, 2009. Robert Miranda now signs as CEO.
Victory ended John Kinross-Kennedy's role as auditor effective March 18, 2009 and hired Hein & Associates LLP the same day. His reports for 2005, 2006 and 2007 included going-concern warnings citing recurring losses; the filing reports no disagreements, and his letter was to follow by amendment.
15 Nov 2006security holder rights change● NeutralMajor
Now called Victory Energy Corporation, the company carried out a 25-for-1 reverse stock split effective Nov 10, 2006: every 25 old shares became one new share. Options, warrants and convertible notes were adjusted proportionately, and fractional shares were rounded up. Shareholders hold fewer shares after the split; the filing does not say what it does to the value of their holdings.
13 Dec 2005material agreement termination● NeutralMajor
The company also dropped the March 2005 Union Media News deal, saying it had not received all the due diligence information and the deal was not in shareholders' interest, with no termination penalties. It said its new direction is oil and natural gas exploration and development in the United States and Canada, completing the exit from the 2005 non-energy acquisitions.
13 Dec 2005material agreement termination● NeutralMajor
The company ended the Feb 2005 Universal Power Vehicles share-exchange deal because its due diligence concerns were not satisfied, saying the deal was not in shareholders' best interest and no termination penalties would apply. It said it would now concentrate on oil and natural gas exploration and development, a turn away from the 2005 technology acquisitions.
Auditor HJ Associates & Consultants chose not to stand for re-election on Sept 6, 2005, and the board engaged John Kinross-Kennedy, CPA, as the new auditor. HJ's reports on 2004 and 2003 carried a going-concern warning, citing a working capital deficit and recurring losses, and the filing reports no disagreements.
On March 10, 2005 the company signed a second share-exchange deal, to acquire Union Media News Corporation from its sole shareholder Jim Boardman in return for 20% of the common stock of its subsidiary Victory Communication Services, Inc. Closing was expected within about two weeks. The filing text oddly says it acquires the stock of 'UPV' rather than UNM, which appears to be a copy error from the earlier filing (inference).
