24 Nov 2015listing compliance notice● NeutralMajor
ZaZa Energy Corp's exchange filed to remove a class of its securities from listing.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
19 Oct 2015capital raising announcement● Neutral
On October 16, 2015 ZaZa sold Alpha Capital $50,000 of Series B convertible preferred stock, convertible into 250,000 common shares (about 5,000 shares per preferred share, priced at $0.20 per share). This is a very small raise next to the roughly $55 million of debt management cited and adds dilution to common holders.
5 Oct 2015listing compliance notice▼ BadMajor
ZaZa withdrew its appeal on September 30, 2015 and chose to delist from Nasdaq; trading was suspended at the open on October 5, 2015. The shares may be eligible to be quoted on the OTC Bulletin Board. This ends the Nasdaq compliance saga that began with the February 2015 notice.
21 Sept 2015material agreement▲ GoodMajor
On September 16-17, 2015 the three founder-directors (including CEO Brooks) exchanged all their 8% subordinated notes (about $50.1 million with interest) for a 2.4% overriding royalty (0.8% each) in any future interests the company or its affiliates acquire over the next five years. This extinguishes that debt without issuing shares, replacing the earlier plan to convert the notes into stock. Management says total debt falls from about $105 million to about $55 million; that figure is the company's statement. The senior secured and convertible notes remain in default.
4 Sept 2015debt financing▼ BadMajor
ZaZa did not pay the August 1 interest on its 9% convertible notes by the August 31, 2015 end of the grace period, so the whole debt ($42.1 million including accrued interest) became immediately due; default interest runs at 2.0% above 9%. This is also a default under the senior secured notes, which separately missed an August 21 interest payment. No holder had yet sent notice of acceleration, and ZaZa says it is still working with both sets of holders with no assurance of a resolution.
31 Aug 2015listing compliance notice▼ BadMajor
Nasdaq told ZaZa on August 26, 2015 that its stock will be delisted because the company did not regain the $35 million market-value requirement within the 180-day grace period. ZaZa said it intends to appeal to a hearings panel; otherwise trading would be suspended September 4, 2015. If the appeal fails, the shares may be quoted on the OTC Bulletin Board or Pink Sheets. This follows the February deficiency notice and the deadline noted earlier.
21 Aug 2015capital raising announcement▼ BadMajor
On August 19, 2015 ZaZa issued a further $76,727.10 senior secured note to Alpha Capital, plus 50,000 common shares at $0.50 ($25,000 gross). Alpha also bought the O-Cap funds' remaining senior notes, so all the lenders who refused to extend are gone. ZaZa also missed the August 1 interest payment on the convertible notes (30-day grace period running), and says it will re-engage the remaining holders to seek an extension, with no assurance of success. The senior notes remain in default at 13.00%.
11 Aug 2015debt financing▼ BadMajor
ZaZa missed the July 15, 2015 repayment of the ~$13.9 million senior secured notes, so the notes are in default and their interest rate rose to 13.00% from July 16. On August 5, 2015 it issued $340,000 of new senior notes (to an affiliate of director John Hearn and to CEO Todd Brooks, per the filing's text), who also bought the existing notes held by Talara and Blackwell. Talara, Blackwell and the two O-Cap funds, who held about 5.90% of the notes, had declined to extend. The default also cross-defaults the $40M convertible notes, and any holder could accelerate, though no acceleration notice had been received. This turns the earlier string of extensions into an open default.
7 Aug 2015listing compliance notice▼ BadMajor
Nasdaq told ZaZa on August 3, 2015 that its stock closed below the $1.00 minimum bid price for 30 business days, giving it a 180-day grace period (with a possible second 180 days) to get back above $1.00 for ten consecutive days. The earlier $35 million market value shortfall from February is also still unresolved, with a deadline of August 25, 2015; failing that, ZaZa would get a delisting notice that it could appeal. This shows the stock price has fallen further since the 2014 reverse split.
1 July 2015debt financing▼ BadMajor
On June 30, 2015, the senior noteholders agreed to a further extension of the ~$13.9 million senior note prepayment, from June 30 to July 15, 2015. The filing mentions no fee for this extension. ZaZa says it is talking with third-party financing sources about refinancing, with no assurance it will succeed. The repayment deadline keeps being pushed back while the debt remains unresolved.
29 May 2015debt financing▼ BadMajor
On May 29, 2015, ZaZa and the senior noteholders agreed to push the repayment of the ~$13.9 million senior secured notes from May 29 to June 30, 2015. ZaZa agreed to pay a cash consent fee of an additional 3% of the principal, on top of the 3% amendment fee already owed. No refinancing is reported; the debt remains outstanding.
30 Apr 2015capital raising announcement● NeutralMajor
ZaZa raised $2.5 million gross by selling 2,500 shares of Series A 5% convertible preferred stock to Alpha Capital Anstalt, plus warrants for 1,875,000 shares at $2.25. The preferred converts into 2,500,000 common shares, ranks ahead of common stock on dividends and liquidation, and is non-voting; conversion/exercise is capped at 19.99% of the common stock unless shareholders approve at the 2015 annual meeting. Warrants first become exercisable October 30, 2015. Northland Securities was placement agent for a 7.0% cash fee. Founders and related holders also signed lock-up agreements (details truncated in the excerpt). This adds potential dilution and a senior claim ahead of common holders.
22 Apr 2015debt financing▼ BadMajor
Amendment No. 8 was signed on April 21, 2015, moving the senior note repayment date from May 6 to May 29, 2015. But it now requires ZaZa to repay all the senior secured notes, about $13,930,889, on May 29, rather than just the notes of holders who demanded payment. As the price of the extension, the noteholders' warrants were repriced from $15.96 to $2.50 per share, covering 3,404,275 shares, which could dilute shareholders if exercised. ZaZa says it is talking with multiple parties about refinancing, with no assurance.
10 Apr 2015debt financing▼ BadMajor
Several senior secured noteholders have now demanded repayment: MSDC and Winmill on April 6, 2015, and Senator, Talara and Blackwell on April 8. Without an extension, ZaZa must repay about $12.76 million by May 6, 2015, and other holders could also demand payment on the same date. Holders of about 93% of the notes agreed to a further 30-day delay (Amendment No. 8), but it needs all holders and a ~7% minority has asked for warrant re-pricing and a higher coupon. ZaZa says it is also pursuing refinancing, with no assurance of success. It also sets the annual meeting for June 16, 2015 (record date May 5).
4 Mar 2015listing compliance notice▼ BadMajor
Nasdaq told ZaZa on February 26, 2015 that its market value of listed securities had been below the $35 million minimum for 30 business days. The listing is not affected immediately; ZaZa has 180 days to get back above $35 million for at least ten consecutive business days, or face a delisting notice (which it could appeal). This is a new listing problem, separate from the earlier bid-price issue addressed by the reverse split.
27 Feb 2015debt financing● NeutralMajor
ZaZa and its senior secured noteholders signed Amendment No. 7, moving the earliest date holders can demand repayment of the $13.9 million notes from February 21 to March 23, 2015, and cutting the company's time to repay after a demand from 60 to 30 days. It also gives relief from the going-concern requirement for FY2014 accounts and waives technical defaults caused by the January 19, 2015 subordinated note changes. This continues the effort to delay the put; no refinancing is announced. The filing also furnishes an updated investor presentation (the excerpt shows 13.1 million shares outstanding and $2.11 stock price on 2/24/2015, $6.3 million cash and $101.2 million total debt at 12/31/2014, current production ~600 boe/d).
23 Jan 2015debt financing● NeutralMajor
The founders' $47.3 million 8% subordinated notes will no longer be swapped for common shares and preferred stock, as agreed in February 2014. Instead, from January 1, 2015 interest is added to the principal rather than paid in cash. Maturity stays August 21, 2017. This replaces the earlier plan, so the dilution from that exchange is off, and the change does not wait for the senior note refinancing. The senior secured notes can be put back to ZaZa from February 21, 2015, with up to 60 days to repurchase. The company says it is still trying to refinance them or push back that date.
6 Jan 2015listing compliance notice▼ Bad
ZaZa Energy Corp withdrew a registration statement, abandoning the offering it covered.
19 Nov 2014material agreement▼ BadMajor
ZaZa settled a dispute with Crede over the July 2014 warrants. After the 10-for-1 reverse stock split effective August 19, 2014, the warrants covered 361,493 shares, and the two sides disagreed over how many shares an exchange would yield. ZaZa will issue 787,530 shares now and 212,470 more later, 1,000,000 in total, in return for all the warrants. Both sides released each other from further obligations under the July agreement. Inference: the second $2.5 million closing no longer appears to apply. This resolves the Crede warrant terms with more shares than the company said it owed.
24 Sept 2014asset acquisition disposition▲ GoodMajor
The Quantum sale of 6,000 net acres of East Texas JV leases closed on September 18, 2014 for about $17 million. That is $11 million in cash plus the right to Quantum's interest in certain future wells. A separate development agreement sets up a shared area for future acreage purchases. Of the cash, $1.1 million had to go to repay the senior secured notes, bringing them to $13.9 million. The rest is meant for drilling and lease costs. This completes the deal announced August 27.
27 Aug 2014material agreement▲ GoodMajor
ZaZa agreed to sell Quantum Energy Partners an affiliate's roughly 4% working interest (6,000 net acres) in undeveloped East Texas JV leases. In return it gets about $17 million in cash plus the right to take Quantum's interest in the next 15 JV wells. ZaZa keeps its interest in existing wells and will receive ongoing G&A reimbursement. Two years after closing, Quantum can require ZaZa to buy back its interest at a price based on Quantum's lease costs. Closing needs approval from the existing JV partner and is not assured.
7 Aug 2014drilling progress report▲ Good
ZaZa announced the first results from the McAdams 1H well in Walker County, drilled in the East Texas JV. The well peaked at about 1,786 barrels of oil equivalent a day including natural gas liquids. Its first two weeks averaged about 1,087 a day. Management called the results very preliminary and said it was cautious about estimating how much the well will ultimately produce. This is the first reported result from the EOG-operated East Texas drilling the company had committed to.
21 July 2014material agreement● NeutralMajor
ZaZa agreed to sell 6,024,097 new shares at $0.83 each, plus warrants for 3,614,459 shares at $1.1205, to Crede CG III, Ltd. Net proceeds are expected to be about $4.56 million. A further $2.5 million of shares and warrants is to be sold by October 20, 2014 at a price set nearer the time. The press release says the money is for East Texas development and lease acquisitions. Existing shareholders are diluted, and the warrants add more potential dilution.
13 June 2014auditor change● Neutral
On June 11, 2014 ZaZa's audit committee dismissed Ernst & Young as auditor and appointed BDO USA. E&Y's reports on 2012 and 2013 carried a going-concern doubt, and the company says there were no disagreements with E&Y. The 2012 material weaknesses in financial reporting were reported as remediated, with none as of Dec 31, 2013.
31 Mar 2014material agreement● NeutralMajor
On March 31, 2014 ZaZa set up an at-the-market programme with MLV & Co. to sell common shares from time to time under its $150M shelf, paying MLV 3% of gross proceeds; no amount sold is stated. It also reported 2013 results: revenue of $8.9M, a net loss of $67.6M including a $104.6M impairment, and $15.2M of cash at year-end. The release says the subordinated note exchange is conditional on extinguishing the senior secured notes. Selling shares could dilute holders (an inference).
21 Mar 2014listing compliance notice▼ BadMajor
On March 18, 2014 NASDAQ told ZaZa its shares had closed below the $1.00 minimum bid price for 30 consecutive business days. There is no immediate effect on trading; the company has 180 days to get back above $1.00 for ten straight days, with a possible second 180 days, otherwise delisting. The stock was $0.78 on the day before the release, and the company says it is evaluating options.
20 Mar 2014material agreement▲ GoodMajor
The March 7 EOG Phase III amendment closed on March 18, 2014, with ZaZa receiving about $4.7M cash and the carry of up to about $9.2M. Separately, on March 14 holders of the senior secured notes (now $15M, plus warrants for 27,433,244 shares) agreed to Amendment No. 6, extending to the 2013 financial statements the same relief from going-concern requirements already given for 2012. This completes the EOG Phase III thread and keeps the senior note terms workable.
12 Mar 2014material agreement termination▲ GoodMajor
On March 7, 2014 ZaZa amended its EOG joint venture to assign about 9,600 net acres (a 75% interest in its remaining Phase III acreage) to EOG for about $4.7M cash plus a carry of up to about $9.2M of future drilling and completion costs. EOG also committed to drill two more test wells, the first starting by July 1, 2014. The Range participation agreement was terminated, with Range's rights having passed to EOG. This resolves the open question of whether EOG would elect into the remaining ~12,300 Phase III acres, and the press release says ZaZa also received $1.1M from its partner related to the Range agreement.
26 Feb 2014capital raising announcement● NeutralMajor
On February 24, 2014 ZaZa agreed to swap the $47.3M of subordinated notes held by its three founders (CEO Brooks, and directors Hearn and Kearby, via their entities) into about 9.48M new common shares (valued at $0.9495 each) and new 13% preferred stock with a $37.4M total liquidation preference. The swap closes only once the remaining $15.0M of senior secured notes is repaid in full, and the company says it plans to fund that from a notes offering that was not yet effective. This continues the debt-reduction thread after the February Hess settlement; the company says pro forma total debt would be about $55M, down from $113.6M at Dec 31, 2013. It would dilute existing common holders and adds preferred stock ranking ahead of them (the latter is an inference). A special committee of independent directors approved it.
7 Feb 2014material agreement▲ GoodMajor
On February 6, 2014 ZaZa settled with Hess over the old joint ventures. The $15.0M escrow held since 2012 was released: about $11.5M to ZaZa and about $3.5M to Hess. Hess gave up its right to proceeds from ZaZa's litigation over certain Texas leases, and the Paris Basin overriding royalty interests were terminated. ZaZa used the $11.5M plus about $1.1M of its own cash to prepay the 8% senior secured notes, cutting them from $26.8M to $15.0M principal, and says all required early paydowns are now done. The prepayment includes about $850,000 of accrued interest and premium. This closes the escrow release thread and leaves a smaller senior secured balance.