Business Context and Reporting Period
This Form 8-K was filed by Ring Energy, Inc. on January 30, 2012, reporting events occurring between November 2011 and January 2012. The filing details a financial relationship with Stanford Energy, Inc., a Texas corporation.
Key Financial Metrics
The filing does not provide comprehensive financial statements, revenue, profit, or cash flow data for Ring Energy, Inc. The specific financial metrics disclosed relate solely to the transaction with Stanford Energy, Inc.:
- Total Advances Made: $1,000,000 (from November 2011 through January 2012).
- Promissory Note Principal: $1,006,978.08 (includes advances plus accrued interest).
- Interest Rate: 5% per annum.
- Maturity Date: On or before January 31, 2013.
- Authorized Credit Line: Up to an additional $250,000 available for future advances.
Material Changes
The material change reported is the formalization of a $1,000,000 loan to Stanford Energy, Inc. via a promissory note dated January 30, 2012. Additionally, the Board of Directors authorized a new credit facility allowing for up to $250,000 in further advances under similar terms.
Guidance, Outlook, and Risks
The filing contains no management guidance, outlook, or discussion of general business risks. The primary contingency identified is the credit risk associated with the $1,006,978.08 note and the potential future exposure of up to $250,000 under the authorized credit line. The repayment of these amounts is due by January 31, 2013.
Investor Verification Checklist
- Verify the creditworthiness and financial stability of Stanford Energy, Inc. to assess the risk of default on the $1,006,978.08 note.
- Confirm whether the additional $250,000 credit line has been utilized since the filing date.
- Review the attached Exhibits 99.1 and 99.2 for specific covenants, collateral, or default provisions not detailed in the summary text.
- Check subsequent filings to determine if the principal and interest were repaid by the January 31, 2013 maturity date.