Business Context and Reporting Period
This Form 8-K is filed by HNR Acquisition Corp (not EON Resources Inc.) on April 23, 2024, reporting events occurring on April 17, 2024, and April 18, 2024. The Company is a Delaware corporation listed on NYSE American (Ticker: HNRA, HNRAW) and is classified as an emerging growth company.
Key Financial Metrics and Debt
- Debt Facility: The Company maintains a Senior Secured Term Loan with First International Bank & Trust (FIBT) with an aggregate principal amount of $28 million.
- Liquidity Requirements: Under a new amendment, the Company must deposit $5,000,000 into a Debt Service Reserve Account by December 31, 2024.
- Revenue and Profit: The filing text does not provide specific values for revenue, profit, cash flow, or margins.
Material Changes
Amendment to Loan Agreement
On April 18, 2024, the Company entered into a Second Amendment to its Term Loan Agreement (effective March 31, 2024). Key changes include:
- Waiver of the requirement to deposit the $5 million Debt Service Reserve Account balance within 60 days of the loan closing; the new deadline is December 31, 2024.
- New covenant requiring the deposit of the greater of $500,000 or 10% of proceeds from any equipment sale-leaseback transactions into the Debt Service Reserve Account.
Listing Compliance Notice
On April 17, 2024, the Company received a notice from NYSE American stating it is not in compliance with listing standards due to the failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Outlook, Risks, and Management Commentary
- Delisting Risk: The Company has six months from April 16, 2024, to regain compliance by filing the Form 10-K. Failure to do so may result in delisting proceedings, though the exchange may grant an additional six-month extension at its discretion.
- Reason for Delay: Management attributes the late filing to the need for additional time, resources, and effort to complete financial reporting and close procedures.
- Management Expectation: The Company expects to file the Form 10-K within the six-month period granted by the NYSE Notice but offers no assurance that this will occur.
Investor Verification Checklist
- Verify the status of the Form 10-K for the fiscal year ended December 31, 2023, and the Company's progress toward filing it within the six-month grace period.
- Confirm the Company's ability to fund the $5,000,000 Debt Service Reserve Account by the December 31, 2024 deadline.
- Monitor for any further communications from NYSE American regarding potential delisting proceedings.
- Review the full text of the Second Amendment to Term Loan Agreement (Exhibit 10.1) for additional covenants or restrictions.