Each one in plain English, with the numbers worked through for a shareholder.
24 Mar 2023asset acquisition disposition● NeutralMajor
Voluntarily filed after the 2011 deregistration, the company says it bought CareOne, LLC, a Utah debt-relief business, on March 23, 2023 for 200,000,000 new common shares (closing March 24). The CareOne owners can rescind if OTC Markets does not move the company off "Shell" status, if the stock is downgraded to the "Expert Market" within twelve months of closing, or if no Form 10 is filed with the SEC by July 31, 2023. The company also says it left shell status in September 2022 by sublicensing a shale-oil extraction technology (R.A.M.S.) from United Energy Corp., but says it has struggled to raise the capital to use it and that OTC Markets denied a change-of-control application and locked it out of its filing portal. CareOne reported unaudited 2022 revenue of $600,000 and $12,000 cash at December 31, 2022. This is a move away from the oil and gas business described in earlier filings; the text shown does not say what happened to the Emerald shares, Carrizo carry wells or old debt. Issuing 200 million shares is likely a large dilution for existing holders (inference; the pre-deal share count is not shown).
A final amendment reports the reverse/forward split took effect on October 5, 2011, after the definitive information statement was filed on September 13, 2011. The estimated cash-out grew to about $54,761.74, paid at $0.22 per pre-split share on about 248,917 shares held by holders of fewer than 500 shares, versus the roughly $6,000 first estimated. Those small holders are paid cash and no longer hold shares; the excerpt does not show whether registration was terminated, and Iris still owns about 55.1%.
An amended going-private filing adds Iris Energy Holdings, Limited as a filing party; the filing says Iris owns about 55.1% of the common stock and that Escher is its sole director. The deal terms are unchanged in this text: a 1-for-500 reverse split with $0.22 per pre-split share cash-out of holders under 500 shares, about 26,000 shares and $6,000. The text shown does not explain why Iris was added.
The company reported the first of three carry wells on the Flattop DJ Basin leases sold to Carrizo in June 2010: the Orlando Hill 26-44-8-61 well in Weld County began production in mid-July, peaking at 650 barrels of oil a day (gross) on July 17 and averaging 457 a day through July. The second carry well (Wickstrom 7-11-5-60) is drilled and due for completion in late August, and the third is due to start drilling in August. The company says it owns a 33.3% working interest in these wells, which continues the Carrizo carry arrangement.
The company and director Michel Escher filed a preliminary going-private statement for a 1-for-500 reverse stock split followed by a forward split. Holders of fewer than 500 pre-split shares would be cashed out at $0.22 per share; the filing estimates about 26,000 such shares, roughly $6,000 in total. Most terms are incorporated by reference to an information statement not included in the excerpt, so other details are not shown here.
On May 2, 2011 the company closed the sale of all its Green River Basin assets to Emerald GRB, LLC, a subsidiary of Australian-listed Emerald Oil and Gas NL, for 125 million Emerald shares (valued at AUD 6.5 million at closing) plus $9,565,000 in cash, with the buyer assuming substantially all related liabilities. The filing says this disposes of all its Green River Basin interests; the Slater Dome and Flattops assets in that basin and the related gathering interests are likely included, though the filing does not itemise them (inference). The company now holds shares in a foreign-listed company as part of the proceeds.
Management concluded that quarterly reports for the periods ended May 31, August 31 and November 30, 2009 should not be relied on, because the conversion features in the Series B and Series C preferred stock should have been recorded as a derivative liability rather than equity. The restatement is non-cash; for example, a $4,570,000 derivative liability at May 31, 2009 and a $25,000,000 reduction in paid-in capital. The Series C preferred converted automatically to common stock effective December 1, 2009, and the restated figures are in the 10-K filed December 7, 2010.
8 June 2010asset acquisition disposition▲ GoodMajor
On June 4, 2010 the company sold its interest in certain Flattop Prospect leases in the Denver Julesburg Basin (Weld and Morgan Counties, Colorado) to Carrizo Oil & Gas, receiving an initial advance of $5,519,989. Carrizo must drill at least three carry wells within 18 months, carrying the company for a 33 1/3% working interest in each, or the leases (except 640-acre tracts) revert to the company. The company has an option to buy back a 1/3 working interest, and the two sides set up an area of mutual interest split 33 1/3 and 66 2/3.
This amendment only adds the letter from the former auditor Stark Winters to the SEC about the April 2010 auditor change, received May 3, 2010. The summary of its content is not in the filing text; the letter is an exhibit only.
On April 9, 2010 the company dismissed its auditor Stark Winter Schenkein and hired Hein & Associates. The board approved the change, and the company reports no disagreements. Stark Winter's report on the year ended February 28, 2009 included a going-concern paragraph.
On February 16, 2010 the company sold 8,000,000 common shares at $0.10 to Iris Energy Holdings for $800,000. Iris is an affiliate whose sole director, Samyak Veera, is a company director. This looks like the Iris subscription flagged in the November 2009 filing, though the filing says 8,000,000 shares rather than the 6,500,000 previously stated (inference). More shares at $0.10 dilute existing holders.
What it means for a shareholder
8.0m new shares at US$0.100 to raise about US$800,000. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
The company reported two wells drilled at Slater Dome in late 2009, the Robidoux 13-15 Twin and Battle Mountain Federal 14-15, its first drilled since 2007. Both are shut in awaiting completion work planned for the second quarter of 2010, and parts of each could not be logged or tested. Flow tests on the Robidoux showed about 3.4 MMCFPD, which the company says is not indicative of actual production. It also plans a pipeline application to connect the Focus Ranch wells, with construction scheduled for July 2010.
The company closed a sale of 3,500,000 common shares at $0.10 to accredited investors (effective November 9, 2009) and had a subscription for 6,500,000 more at $0.10 from Iris Energy Holdings, an affiliate whose sole director is company director Samyak Veera. Once accepted, total gross proceeds would be $1,000,000, and the company agreed to register the shares for resale. The $0.10 price is far below the $1.05 Series C conversion price and the $0.75 to $1.21 prices of 2007 insider purchases.
On July 23, 2008 the company granted options at $1.01 per share, expiring 2018, under its 2007 incentive plan: 1,250,000 to CEO Paul Laird, 1,000,000 to CFO Les Bates, 500,000 to director Grant Gaeth and 1,950,000 to employees and agents, vesting quarterly through November 2010. Laird and Bates also each received 50,000 shares. These add to the shares that could be issued, diluting existing holders if exercised.
The board extended the expiry of warrants over 4,750,803 shares at $1.11 (plus the Series B placement agent warrants) from February 1, 2008 to May 1, 2008; all other terms are unchanged. Holders get more time to exercise; the filing does not say whether any have been or will be exercised.
31 Dec 2007asset acquisition disposition● NeutralMajor
On December 26, 2007 the company bought the general partner interest in Slater Dome Gathering (the 18-mile pipeline from the Slater Dome Field to the Questar line at Baggs, Wyoming) from Natural Resource Group Gathering for $1,075,000: $268,750 in cash plus a $806,250 note at 2.5% due December 31, 2008. The company now owns 100% of the general partner interests and 82.76% of the Class A limited partner interests, and is entitled to 84.487% of cash distributions until the limited partners recover their capital and 87.07% after (the earlier figures of 74.487% and 62.07% are superseded). The seller is half-owned and managed by CEO Paul Laird, so this is a related-party deal; the price was based on a valuation by Vanderpool Pipeline Engineers.
On July 31, 2007 the company and Clayton Williams amended the Focus Ranch farmout again: Clayton Williams will assign the unit to the company within seven days of a written request, no earlier than August 15, 2007 and no later than 15 days after production operations are completed, and will resign as operator and vote for the company as successor. The company waived the condition that rights to the road to the unit be transferred. This continues the June 2007 Focus Ranch deal and gives the company control over when the assignment happens.
On July 17, 2007 the company formally documented the board-seat right it gave Iris Energy Holding Corp. in the Series C deal, effective December 1, 2006: Iris can appoint directors equal in number to those not appointed by it. The right ends if Iris holds fewer than 35,000 Series C preferred shares and fewer than 3,500,000 common shares, if the company raises $20,000,000 or more in equity or convertible securities before December 1, 2009, or on December 1, 2009. The filing says Iris bought 260 units for $13,000,000 in December 2006 and January 2007. This gives the Series C investor continuing influence over the board, and follows the earlier note that Faliks was carved out as not an Iris appointee.
Effective June 4, 2007 the company signed an amended farmout agreement with Clayton Williams Energy to become operator of and acquire Clayton Williams's interest in the Focus Ranch Unit (about 38,695 gross acres in Routt County, Colorado, next to Slater Dome, with one gas well). It must begin testing the Niobrara and Frontier formations in the Focus Ranch Federal 12-1 well by August 1, 2007, or plug and abandon the well and reclaim the site and road. If commercial production is established, Clayton Williams gets a $2,000,000 production payment from 35% of net proceeds. The lease assignment is still subject to conditions. This is a new expansion beyond Slater Dome; the company owns 82.76% of the limited partnership interest in the gathering line that would carry any gas.
This amendment only corrects the placement agent warrants for the January 16, 2007 final closing, to 291,429 at $1.05, 291,429 at $1.50 and 145,716 at $2.00 (down from the 624,762, 624,762 and 312,388 first reported). All other terms of the $9,447,500 closing and the press release are repeated unchanged.
This amendment supplies the financial statements promised for the December 2006 Cedar Ridge acquisition of the Slater Dome interests. The acquired properties had 2005 oil and gas sales of $98,234 against operating expenses of $946,122, a net loss of $847,888 (2004 loss $140,553); the statements were audited by Stark Winter Schenkein & Co., LLP, with pro forma figures for the company also included. It also clarifies the timeline: the deal closed in escrow November 30, 2006, the price was paid December 4, and completion was effective December 14, 2006. This fulfils the pending filing obligation from the acquisition and changes nothing about the deal terms.
22 Jan 2007capital raising announcement● NeutralMajor
The company held the final closing of its Series C preferred unit sale on January 16, 2007: 201.02 units at $50,000 each, with $9,447,500 gross cash and $9,282,700 net after $164,800 of placement agent costs; $612,500 of the Faliks October 2006 promissory note (principal plus interest) was converted into units. The placement agent warrants are stated as 624,762 at $1.05, 624,762 at $1.50 and 312,388 at $2.00 (a later amendment corrects these). The accompanying press release says the three closings total 444.5 units and $22,225,000 gross, with $8,000,000 used for the Slater Dome purchase (66.66% working interest, company now operator) and about $13,000,000 earmarked for a 15 to 25 well drilling program in summer 2007 and working capital. This completes the Series C raise and is dilutive.
This second amendment corrects the placement agent warrants for the December 29, 2006 Series C closing to 201,429 shares at $1.05, 201,429 at $1.50 and 100,717 at $2.00, about a tenth of the numbers first reported. The rest of the $2,165,000 raise is unchanged.
What it means for a shareholder
201,429 new shares at US$1.05 to raise about US$211,500. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
This amendment corrects the gross proceeds of the December 29, 2006 Series C closing to $2,165,000 (43.3 units), not $10,000,000; net proceeds were $2,164,975 after $169,225 of commissions and expenses as stated. The placement agent warrant counts in this version were still the uncorrected larger numbers.
4 Jan 2007capital raising announcement● NeutralMajor
On December 29, 2006 the company closed a second sale of 43.3 Series C units at $50,000 each, on the same terms as the earlier one (convertible at $1.05, with $1.50 and $2.00 warrants). The filing states gross proceeds of $10,000,000, which does not match 43.3 units (the next amendment corrects this). It also lists placement agent warrants of over 2 million shares at each of $1.05 and $1.50, and about 1 million at $2.00 (also later corrected). This adds further dilution.
This amendment corrects the earlier report: the 200-unit, $10,000,000 Series C sale closed on December 1, 2006 (not November 30), with the buyer named as Iris Energy Holdings Limited. It also changes the board right: Aviel Faliks, who the company had already agreed to appoint, is no longer deemed one of Iris's appointees (agreed around December 13, 2006). No new money or securities are added.
15 Dec 2006asset acquisition disposition▲ GoodMajor
The company closed the $8,000,000 purchase from Cedar Ridge on December 14, 2006, so it now owns a 66.66667% working interest in the Slater Dome Field, with estimated proved reserves of 8,214,000 MCF acquired. The filing says it was funded by the $10,000,000 unit sale to Iris Energy Holding Corp. on December 1, 2006. Audited financial statements and pro forma information for the acquisition are still to come, within 75 days of December 14. This resolves the pending deal announced in November.
7 Dec 2006capital raising announcement● NeutralMajor
On November 10, 2006 the company granted 1,100,000 options at $1.25 to employees and others, vesting 137,500 per quarter and expiring November 30, 2014. It also reported a closing of 200 units at $50,000 each ($10,000,000 gross) of 2.5% Series C convertible preferred (convertible at $1.05 per share, 47,619 common shares per unit) with $1.50 and $2.00 three-year warrants. This is the Series C offering flagged in the earlier Faliks note, and it is dilutive. The filing also says the investor can appoint as many directors as are not its appointees, and says the closing date was November 30 (corrected by a later amendment).
On November 3, 2006 the company agreed to buy Cedar Ridge, LLC's 36.66667% working interest (29.33336% net revenue interest) in eleven gas wells and 2 water disposal wells, with 33,949 net acres in the Slater Dome Field, for $8,000,000. That would take it to a 66.66667% working interest in the field, with estimated proved reserves of 8,214,000 MCF acquired. Closing was expected around November 30, 2006 but is subject to conditions the company says it cannot be sure will be met. The deal increases the company's stake in the Slater Dome field in which it already held 30% (per earlier filings) and builds on the Faliks note and planned Series C financing (inference: those may be the funding source; the filing does not state how it will pay).
