The following taken directly from SSN's filing with the SEC regarding the Placement. Italics are sections cut from the filing.
"...We estimate that the proceeds of the offering will be approximately $1,234,754 after deducting estimated placement agent’s fees and our expenses relating to the offering."
So ~US$1.234M of net cash received. It goes on to talk about "Use of Proceeds" which has no real surprises.
With respect to "Liquidity Risk" this paragraph contains a concerning statement which I have highlighted in bold.
"...Our ability to pay interest and principal on our indebtedness and to satisfy our other obligations will depend upon our future operating performance and financial condition as well as our ability to refinance our current indebtedness, which will be affected by prevailing economic conditions and financial, business and other factors, many of which are beyond our control."
I imaging this "refinance our current indebtedness" refers to the repayment of $10M by June 30th. They go on with describing the difficulty they may have with liquidity to fund operations and the challenge in raising further equity and debt.
Those 7 Amendments to the credit facility which I posted in the thread #17441268 titled "IMPORTANT: SSN had to tell the SEC but not us", contains this little gem of a statement - my bolding
"...These amendments could make it materially more difficult to operate our business, and there can be no assurance that we will be able to remain in compliance with these covenants, particularly in the current oil price environment."
That seems to be flagging a potential problem (already?) with the June Qtr even with $40 oil...
A little annotation on the FB wells acquired - bolding is mine:
"...Approximately 65 wells that we acquired in the Foreman Butte Acquisition are not currently producing or are shut-in. If we are unable to return these wells to production within 12 months, the North Dakota Industrial Commission (“NDIC”) may require us to permanently plug and abandon them. In addition, certain of the acquired wells were previously subject to a gas gathering agreement with ONEOK Rockies Midstream, LLC that was terminated on February 29, 2016. The seller in the Foreman Butte Acquisition entered into a thirty-day temporary agreement that expired on March 31, 2016, and we are in the process of negotiating a new long term gas gathering agreement for these wells. If we are unable to successfully negotiate a new gas gathering agreement or obtain an extension of the temporary gas gathering agreement, we will be forced to flare gas produced from certain of the acquired wells, which, in turn, may require us to shut-in part or all of these wells in order to comply with applicable NDIC anti-flaring regulations..."
The following has been in all of the "prospectus" related shelf filings...
"Our Constitution authorizes us to issue an unlimited amount of “blank check” preferred stock, or preference shares. Accordingly, the Board will have the authority to fix and determine the relative rights and preferences of preferred shares, as well as the authority to issue such shares, without further shareholder approval."
Still think that might be the best bet for SSN equity raising efforts - question is simply how many, how long, what interest rate and what conversion rate.
Price drop was to be expected of course given the discount, the volume doesn't appear to be crazy at around 3-4 times recent volume.
The SEC filing made note of SSN's intention to file a plan with NYSE:MKT about delisting before the deadline expires on Apr 13 (which is today) but I've not seen that filing as of time of writing. (you can check online),
GFTA
SSN Price at posting:
0.6¢ Sentiment: None Disclosure: Held
