XBOR Cross Border Resources Inc (CE)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K/A 

(Amendment No. 1)

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 11, 2015

CROSS BORDER RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation)	000-52738 (Commission File Number)	98-0555508 (I.R.S. Employer Identification Number)
2515 McKinney Avenue, Suite 900, Dallas, Texas (Address of principal executive offices)		75201 (Zip Code)
(210) 226-6700 (Registrant’s telephone number, including area code)
Not Applicable (Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Introductory Note

 

Cross Border Resources, Inc. (“Cross Border”) previously filed a Current Report on Form 8-K dated March 11, 2015 (the “Current Report”) with the Securities and Exchange Commission on April 28, 2015 to report the sale by Cross Border of certain assets. The purpose of this amendment to the Current Report is to include the pro forma financial information required under Item 9.01. Except for the foregoing, this Form 8-K/A No. 1 effects no other changes to the Current Report.

 

Item 9.01 Financial Statements and Exhibits.

 

(b) Pro Forma Financial Information.

 

	The following unaudited pro forma consolidated financial statements of Cross Border are included as Exhibit 99.1 to this Current Report:
	·	Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2015
	·	Unaudited Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income for the Three Months Ended March 31, 2015.
	·	Unaudited Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Income for the Fiscal Year Ended December 31, 2014.

 

(d) Exhibits

Exhibit No.	Description of Exhibit
99.1	Pro forma financial statements.

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

Date: August 14, 2015	RED MOUNTAIN RESOURCES, INC.
	By:	/s/ Alan W. Barksdale
		Alan W. Barksdale Chairman of the Board

  

 

CROSS BORDER RESOURCES, INC. 8-K/A 

 

EXHIBIT 99.1

 

 

CROSS BORDER RESOURCES, INC

 

Unaudited Pro Forma CoNDENSED FINANCIAL INFORMATION

 

On April 21, 2015, Cross Border Resources, Inc. (“Cross Border”) entered into a purchase and sale agreement (the “PSA”) with RMR Operating, LLC (“RMR Operating”), Black Rock Capital, Inc. (“Black Rock”), RMR KS Holdings, LLC (“RMR KS”) and Black Shale Minerals, LLC (“Buyer”). Each of Cross Border, RMR Operating, Black Rock and RMR KS is an operating subsidiary (together, the “Operating Subsidiaries”) of Red Mountain Resources, Inc. (“RMR,” and together with the Operating Subsidiaries, the “Companies”). Pursuant to the PSA the Operating Subsidiaries sold, assigned, transferred and conveyed to Buyer, effective as of April 1, 2015, fifty percent (50%) of their right, title, and interest in and to certain oil and natural gas assets and properties (the “Assets”), including their oil and natural gas leasehold interests, wells, contracts, and oil and natural gas produced after April 1, 2015 (the “Sale”). The aggregate purchase price for the Assets under the PSA was $25.0 million, subject to certain adjustments, including post-closing adjustments for any title or environmental benefits or title or environmental defects resulting from Buyer’s title and environmental reviews. The following unaudited pro forma condensed financial statements reflect the historical results of Cross Border as adjusted on a pro forma basis to give effect to the sale of Cross Border’s Assets for an allocated purchase price of $15.0 million.

 

The following unaudited pro forma condensed financial statements and explanatory notes present how the financial statements of Cross Border may have appeared had the Sale of the Assets occurred as of March 31, 2015 with respect to the balance sheet information and as of January 1, 2014 with respect to statements of operations information.

 

Assumptions and estimates underlying the unaudited adjustments to the pro forma financial statements (the “pro forma adjustments”) are described in the accompanying notes to the unaudited pro forma condensed financial statements. Since the pro forma financial statements have been prepared based on preliminary estimates, the final amounts recorded may differ materially from the information presented, as described further in the accompanying notes. The pro forma adjustments are based on available information and certain assumptions that management believes are reasonable. The pro forma adjustments are directly attributable to the transaction and are expected to have a continuing impact on the results of operations of Cross Border. In the opinion of management, all adjustments necessary to present fairly the unaudited pro forma financial information have been made.

 

These unaudited pro forma condensed financial statements are provided for illustrative purposes only and are not necessarily indicative of the results that actually would have occurred had the transactions been in effect on the dates or for the periods indicated, or of results that may occur in the future. The pro forma financial statements should be read in conjunction with the historical financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are set forth in Cross Border’s Annual Report on Form 10-K for the year ended December 31, 2014 and in Cross Border’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.

 

 

CROSS BORDER RESOURCES, INC.

UNAUDITED PRO FORMA CONDENSED BALANCE SHEET

MARCH 31, 2015

(in thousands)

 

		Historical				Pro Forma Adjustments				Pro Forma
Assets
Current Assets:
Cash and cash equivalents		$	715			$	2,955	(A)		$	3,670
Accounts receivable - oil and gas			1,524				—				1,524
Assets held for sale			16,543				(16,543	)(B)			—
Prepaid expenses and other current assets			88				—				88
Total current assets			18,870				(13,588	)			5,282
Oil and Natural Gas Properties, Successful Efforts Accounting:
Oil and gas properties			28,195				—				28,195
Less accumulated depreciation, depletion, amortization and impairment			(12,334	)			—				(12,334	)
Oil and natural gas properties, net			15,861				—				15,861
Other Assets:
Restricted cash			215				400	(A)			615
Other property and equipment, net of accumulated depreciation and amortization			26				—				26
Deferred financing costs			37				(37	)(C)			—
Other assets			55				—				55
Total Assets		$	35,064			$	(13,225	)		$	21,839
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable		$	3,322			$	(3,200	)(D)		$	122
Accounts payable - related party			163				(163	)(D)			—
Accrued expenses and other payables			802				—				802
Line of credit			8,200				(8,200	)(D)			—
Liabilities associated with assets held for sale			1,625				(1,625	)(E)			—
Environmental liability, current portion			2,057				—				2,057
Total current liabilities			16,169				(13,188	)			2,981
Non-Current Liabilities:
Asset retirement obligations, net of current portion			1,625				—				1,625
Total Liabilities			17,794				(13,188	)			4,606
Commitments and Contingencies
Stockholders' Equity:
Common stock			17				—				17
Additional paid-in capital			33,463				—				33,463
Accumulated deficit			(16,210	)			(37	)(C)			(16,247	)
Total stockholders' equity			17,270				(37	)			17,233
Total Liabilities and Stockholders' Equity		$	35,064			$	(13,225	)		$	21,839

 

See accompanying notes to unaudited pro forma condensed financial statements.

 

 

CROSS BORDER RESOURCES, INC.

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2015

(in thousands except per share amounts)

 

		Cross Borders Resources, Inc.				Pro Forma Adjustments				Pro Forma
Revenue:
Oil and natural gas sales		$	1,453			$	(727	)(F)		$	726
Operating Expenses:
Production taxes			133				(67	)(F)			66
Operating costs			749				(375	)(F)			374
Natural gas transportation and marketing expenses			24				(12	)(F)			12
Depletion, depreciation, amortization, accretion and impairment			377				(188	)(G)			189
Accretion of discount on asset retirement obligation			34				(17	)(H)			17
General and administrative expense			56				—				56
Total operating expense			1,373				(659	)			714
Income from Operations			80				(68	)			12
Other Income (Expense):
Interest expense			(104	)			104	(I)			—
Total Other Income (Expense)			(104	)			104				—
Loss Before Income Taxes		$	(24	)		$	36			$	12
Income tax provision			—				—				—
Net Earnings/(Loss)		$	(24	)		$	36			$	12
Basic and diluted earnings/(loss) per common share		$	0.00			$	0.00			$	0.00
Basic weighted average common shares outstanding			17,336				—				17,336
Diluted weighted average common shares outstanding			21,024				—				21,024

 

See accompanying notes to unaudited pro forma condensed financial statements.

 

 

CROSS BORDER RESOURCES, INC.

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2014

(in thousands except per share amounts)

 

		Historical				Pro Forma Adjustments				Pro Forma
Revenue:
Oil and natural gas sales		$	12,352			$	(6,176	)(F)		$	6,176
Operating Expenses:
Production taxes			999				(500	)(F)			499
Operating costs			2,288				(1,144	)(F)			1,144
Natural gas transportation and marketing expenses			103				(51	)(F)			52
Depreciation, depletion, amortization and impairment			9,154				(4,577	)(G)			4,577
Accretion of discount on asset retirement obligation			186				(93	)(H)			93
General and administrative expense			696				—				696
Total operating expense			13,426				(6,365	)			7,061
Loss from Operations			(1,074	)			189				(885	)
Other Income (Expense):
Gain (loss) on derivatives			(4	)			—				(4	)
Interest expense			(486	)			486	(I)			—
Loss on settlement of litigation			(900	)			—				(900	)
Total Other Income (Expense)			(1,390	)			486				(904	)
Loss Before Income Taxes		$	(2,464	)		$	675			$	(1,789	)
Income tax provision			—				—				—
Net Loss		$	(2,464	)		$	675			$	(1,789	)
Basic loss per common share		$	(0.14	)		$	0.04			$	(0.10	)
Fully diluted loss per common share		$	(0.12	)		$	0.03			$	(0.09	)
Basic weighted average common shares outstanding			17,336								17,336
Fully diluted weighted average common shares outstanding			21,024								21,024

 

See accompanying notes to unaudited pro forma condensed financial statements.

 

  

CROSS BORDER RESOURCES, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED

FINANCIAL STATEMENTS

MARCH 31, 2015 and DECEMBER 31, 2014

 

NOTE 1. BASIS OF PRO FORMA PRESENTATION

 

The accompanying unaudited pro forma condensed financial statements and explanatory notes present how the financial statements of Cross Border may have appeared had fifty percent (50%) of its right, title, and interest in and to certain oil and natural gas assets and properties (the “Assets”), including its oil and natural gas leasehold interests, wells, contracts, and oil and natural gas produced after April 1, 2015 (the “Sale”) occurred as of March 31, 2015 with respect to the balance sheet information and as of January 1, 2014 with respect to statements of operations information. The transaction for which these pro forma financial statements are presented is explained in more detail in the introductory paragraph to the accompanying pro forma financial information.

 

Following are descriptions of certain columns included in the accompanying unaudited pro forma condensed financial statements:

 

Historical—Represents the historical condensed balance sheet of Cross Border as of March 31, 2015 and the historical condensed statements of operations of Cross Border for the three months ended March 31, 2015 and the year ended December 31, 2014.

 

Pro Forma Adjustments—Represents the adjustments to the historical condensed financial statements necessary to arrive at the pro forma financial position of Cross Border as of March 31, 2015, as if the sale of the Assets occurred as of January 1, 2014, and the pro forma results of operations of Cross Border for the three months ended March 31, 2015 and the year ended December 31, 2014, as if the sale of the Assets occurred as of January 1, 2014.

 

The pro forma adjustments represent management’s estimates based on information available as of the time this document was prepared and are subject to revision as additional information becomes available and additional analyses are performed. The pro forma financial statements do not reflect the impact of possible revenue or earnings effects or cost savings from operating or administrative changes. Also, the pro forma financial statements do not reflect possible adjustments related to restructuring activities that have yet to be determined or transaction or other costs following the Sale that are not expected to have a continuing impact.

 

 

NOTE 2. PRO FORMA ADJUSTMENTS AND ASSUMPTIONS

 

	A.	To record excess cash remaining and restricted cash held for environmental work after using a portion of the sales proceeds of $15.0 million to repay indebtedness under the credit facility of $8.2 million and payables of $3.4 million.
	B.	To record the sale of the Assets.
	C.	To eliminate debt issue costs associated with the credit facility that was repaid using a portion of the sales proceeds.
	D.	To eliminate the outstanding balance under the credit facility of $8.2 million, accounts payable of $3.2 million and accounts payable–related party of $0.2 million which were repaid using a portion of the sales proceeds.
	E.	To eliminate the asset retirement obligations associated with the Assets.

 

 

	F.	To eliminate revenues, operating expenses, production taxes and natural gas transportation and marketing expenses associated with the Assets.
	G.	To adjust depreciation, depletion, amortization and impairment to give effect to the reduction in revenue volumes and oil and gas properties as a result of the sale of the Assets.
	H.	To eliminate accretion expense attributable to asset retirement obligations associated with the Assets.
	I.	To adjust interest expense to give effect to the repayment of the credit facility.