Business Context and Reporting Period
This Form 8-K was filed by Ring Energy, Inc. on April 15, 2012, reporting events occurring on that date. The filing primarily addresses a change in the company's independent certifying accountant and provides context regarding a planned business combination with Stanford Energy, Inc.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses on accounting governance rather than financial performance data.
Material Changes
- Accountant Dismissal: Ring Energy dismissed Haynie & Company as its independent accountant effective April 15, 2012. The dismissal was recommended by the Audit Committee and approved by the Board of Directors.
- Accountant Engagement: Hansen, Barnett & Maxwell, P.C. ("HBM") was engaged as the new independent accountant effective April 15, 2012.
- Audit History: Reports by Haynie & Company for fiscal years ended December 31, 2011, and 2010 contained no adverse opinions, disclaimers, or qualifications. No disagreements existed between the company and Haynie & Company regarding accounting principles or audit scope.
Outlook, Risks, and Unusual Items
Planned Business Combination: The company anticipated consummating a business combination with Stanford Energy, Inc. on February 8, 2012, with Ring Energy continuing as the legal reporting entity. HBM was engaged to read financial statements and pro forma information related to this transaction but was not engaged to audit them.
Consultation with New Accountant: Between February 8, 2012, and April 18, 2012, HBM reviewed Ring Energy's 2011 financial statements and Stanford's 2010 and 2011 statements. HBM identified minor changes required for compliance with U.S. GAAP, advised on accounting for Stanford's acquisitions, and reviewed the proposed accounting treatment for the business combination.
Risks and Contingencies: The filing notes that HBM participated in discussions with SEC staff regarding accounting changes for Stanford's acquisitions and the presentation of predecessor financial statements.
Investor Verification Checklist
- Verify the status of the business combination with Stanford Energy, Inc., as the filing references an anticipated transaction from February 2012.
- Review the letter from Haynie & Company (Exhibit 16.1) to confirm their agreement with the statements regarding the dismissal.
- Confirm the final accounting treatment of the Stanford Energy transaction as advised by HBM.
- Check subsequent filings for the updated 2011 Form 10-K incorporating the minor changes identified by HBM.