Business Context and Reporting Period
Company: Ring Energy, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 19, 2012
Event: Completion of acquisition of CRH Mississippi South Fund ("CRH") and Pontious Mississippi South Fund ("Pontious") via merger.
Key Financial Metrics and Transaction Details
This filing reports a specific asset acquisition transaction rather than periodic financial performance metrics (revenue, profit, cash flow, margins, or debt levels are not provided in this document).
- Total Cash Consideration Paid: $2,277,111.80
- Equity Consideration Issued: 625,000 shares total (312,500 shares to Calvin R. Hullum, Jr. and 312,500 shares to Charles M. Crawford).
- Cash Allocation: $1,460,148.89 to Mr. Hullum; $816,962.91 to Mr. Crawford.
- Adjustment: Cash payment was reduced by $42,888.20 from the original agreement amount due to a target company's inability to deliver a full 100% working interest in one lease.
Material Changes and Unusual Items
The primary material change is the consolidation of CRH and Pontious into Ring Energy, Inc. The transaction involved a reduction in the agreed-upon cash payout due to a deficiency in the working interest of a specific lease held by one of the target entities.
Guidance, Outlook, and Risks
Financial Statements: Financial statements of the acquired businesses and pro forma financial information are not included in this initial report. They are scheduled to be filed by amendment within 71 calendar days of the initial filing date.
Securities Issuance: The 625,000 shares issued were unregistered under the Securities Act, relying on exemptions for transactions not involving a public offering (Section 4(a)(5), 4(a)(2), and Rule 506). These shares carry restrictive legends and cannot be resold in the U.S. without registration or an applicable exemption.
Investor Verification Checklist
- Verify the upcoming amendment filing (within 71 days) for the financial statements of CRH and Pontious.
- Review the pro forma financial information once filed to assess the impact of the acquisition on Ring Energy's consolidated balance sheet.
- Confirm the status of the lease with the missing 100% working interest and any potential legal or operational implications.
- Monitor the dilution impact of the 625,000 newly issued shares on existing shareholders.