Each one in plain English, with the numbers worked through for a shareholder.
19 Mar 2018bankruptcy or receivership▼ BadMajor
On March 16, 2018 the board decided to file for Chapter 11, with about $2,841,314 of debt and about $50 of assets. A prepackaged plan would pay creditors in cash and stock, form a successor corporation and have it acquire Smart Tech (automated reminder pill bottles and fiber optic cables). The company states shareholders will receive and keep nothing of value and are deemed to have rejected the plan, so they get no vote. Charles Volk resigned as CEO (staying a director) and Al Kau, an earlier investor, became CEO and director on March 14, 2018. The filing gives the March 2017 date in the header, but the text says 2018.
In January 2015 the company sold two small 8% convertible notes: $26,875 to LG Capital (January 8, $21,500 cash, due January 8, 2016) and $20,625 to Adar Bays (January 13, $16,500 cash, due January 13, 2016). Both can be converted after 180 days at a 45% discount to the lowest closing bid over 20 days. This continues the small, heavily discounted convertible borrowing, adding dilution risk.
In April 2014, court-approved settlements let Tarpon Bay Partners ($1,127,495 of payables it bought from vendors) and IBC Funds ($74,514.01) be paid in newly issued shares at deep discounts (Tarpon at 30% of the stated price, IBC at a 50% discount to market), plus a $75,000 Tarpon note convertible at 50% of the low bid. Already $36,897 was settled with 310M shares to Tarpon and $22,900 with 234M shares to IBC. The company issued 2.82 billion shares between January 1 and September 4, 2014, leaving 2,869,519,180 outstanding, a massive dilution of existing holders compared with 174.7M in March 2013. This continues the Ironridge-style settlement of payables for shares.
Magna Group, LLC, Hanover Holdings I, LLC, Joshua Sason reported a WORTHINGTON ENERGY, INC. shareholding of 25,000,000 shares (9.86% of votes) in a periodic institutional filing.
The auditor Hansen, Barnett & Maxwell resigned effective September 3, 2013, and Weinberg & Company was engaged on September 18, 2013 (starting with the quarter ended June 30, 2013). The filing, made in January 2014, says there were no disagreements and the earlier reports carried going-concern doubt. It does not link the resignation to the 2012 restatement.
In February 2013 the company raised small amounts: $25,000 from each of Al Kau and Aaron Shrira for 2.5M shares and a 2.5M-share warrant at $0.05 each, a $53,000 Asher 8% debenture (due Dec 1, 2013, convertible at 50% of the average of the three lowest bids) and a $25,000 Prolific 6% debenture (due Feb 28, 2014, convertible at 60% of the lowest bid). It also gave director David Pinkman 1M shares and a 1M-share $0.05 warrant to manage the VM 179 prospect, and converted $25,000 of Volk's back pay into 5M shares. Shares outstanding were 174,668,697 as of March 18, 2013, a lower count than the 312M reported in September 2012; the filing does not explain this (inference: possibly a reverse split, which the January 2013 pro forma hints at). The discounted notes continue the dilution pattern.
On January 25, 2013 the company settled with former CEO Anthony Mason and Black Cat: it hands back the Mustang Island 818-L lease, the I-1 well and the other Black Cat assets (with production since about August 30, 2012 going to Black Cat), and pays $125,000 in 10 monthly instalments from March 11, 2013, accelerated if it obtains a credit facility of $3.5M or more. Black Cat returns the 4.5 million shares it received (the filing's pro forma describes them as post-reverse-split) plus VM 179 seismic studies, and Mason resigned as CEO and director. This reverses the Black Cat purchase thread. Charles Volk returns as CEO and President, David Pinkman joins the board, and directors Paul Jordan and Cliff Henry also resigned for personal reasons.
The company said on November 12, 2012 that its financial statements for the quarters ended March 31 and June 30, 2012 should not be relied on and will be restated. The cause was how warrants issued in May and June 2011 had been valued: earlier valuation studies assumed their share count would rise when the company sold shares cheaply (full ratchet), but the warrants only lower their exercise price (price ratchet). Restated reports were expected by November 14, 2012. The filing does not give the size of the corrections.
WORTHINGTON ENERGY, INC. announced its upcoming annual shareholder meeting, covering the routine agenda (director elections, auditor ratification, executive-pay advisory vote).
The company sold Asher Enterprises an 8% convertible debenture of $42,500 (September 13, 2012, due June 19, 2013, convertible from March 12, 2013 at 50% of the average of the three lowest bids in 10 days) and a 6% $20,000 debenture to Prolific Group (September 27, 2012, due September 27, 2013, convertible from March 27, 2013 at 70% of the lowest bid in five days). This continues the small discount-priced convertible borrowing, which adds dilution risk.
This amendment to the September 18 filing corrects the address and the GEL investor's name (GEL Properties, LLC) and adds a La Jolla Cove election made September 11, 2012 to buy 1,818,182 shares for $50,000 under an existing equity investment agreement; the shares were not yet issued. The other share issuances and the 312,005,193 share count are unchanged.
Between August 22 and September 12, 2012 the company issued about 38 million shares, mostly on note conversions (GEL 12M for $45,000; Asher about 9.2M for $31,200; La Jolla 10M for $5,000; Prolific 1.9M for $9,000), plus 500,000 to an employee and 5,000,000 to Ironridge Global IV under a court-approved settlement of $1,388,407 of payables, accrued pay, interest and notes. Shares outstanding were 312,005,193 as of September 17, 2012. This continues rapid dilution and shows the Ironridge settlement clearing some liabilities for shares.
WORTHINGTON ENERGY, INC. shareholders approved the routine matters put to a vote at the company's annual meeting (director elections, auditor ratification, and the executive-pay advisory vote).
On September 5, 2012 the company issued GEL Properties two $50,000 convertible notes due September 5, 2013 (one for cash, one for a $50,000 promissory note from GEL due June 2013), 6% interest, convertible at 70% of the lowest closing bid in the prior five days with a $0.0001 floor. It also issued 5,555,556 shares to Brio Capital on a $20,000 conversion. Shares outstanding were 278,965,301 as of September 7, 2012. Only half the GEL funding is cash up front, and the very low conversion floor leaves room for large dilution.
In August 2012 the company issued about 9.4 million shares to directors and a former employee to retire $42,500 of salary and debt, 22.5 million shares to Black Cat under the amended purchase agreement (payable on starting production at the Mustang Island Well), and 10 million shares to Charles Volk under his 2010 change-of-control agreement. Shares outstanding were 273,409,745 as of August 30, 2012, up from about 68 million in March. The Black Cat issuance suggests the Mustang Island well began producing (inference from the share trigger); the filing does not state that closing occurred. Heavy dilution for existing holders.
