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Wednesday, January 20, 2021 5:54:01 PM
As consideration for the SORC Shares, Buyer paid to Alleghany $55,000 and the Company agreed to pay to Alleghany a revenue royalty of 5.0% of the Company’s future revenues and net profits relating to oil, gas, gas liquids and all other hydrocarbons, subject to certain adjustments, for a period of seven years after the closing.
So with the ability to freely utilize UGD 3.0 technology, they have to pay a minute royalty of 5%.
Further, pursuant to the SORC Purchase Agreement, Laredo and Alleghany entered into a Consulting Agreement dated as of December 31, 2020 (the “Consulting Agreement”), pursuant to which Seller agreed to pay an aggregate of approximately $1.245 million during calendar year 2021 in consideration of Laredo causing certain individuals, including Mark See, Laredo’s Chief Executive Officer and Chairman, and Chris Lindsey, Laredo’s General Counsel and Secretary, to provide consulting services to Alleghany (for a period of three years for Mr. See and one year for Mr. Lindsey).
They will still have consulting revenue from Alleghany.
In connection with the SORC Purchase Transaction, the notes were amended, restated and consolidated into one note including all accrued interest through December 31, 2020, the date of the transaction, for a total of $631,434 (the “Senior Consolidated Note”) with a maturity date of June 30, 2022. The Senior Consolidated Note requires any stock issuances for cash be utilized to pay down the outstanding loan balance unless written consent is obtained from Alleghany. As part of the SORC Purchase Transaction, the Company agreed to secure repayment of the Senior Consolidated Note with certain equipment owned by SORC Holding and to reduce the note balance with any proceeds received from any sales of such equipment. The note bears no interest until January 1, 2022 whereupon the interest rate increases to 5% per annum through maturity. Principal with all accrued and unpaid interest is due at maturity.
A 1 year interest free loan, and then 5% for 6 months next year when it becomes due on June 30.
The Company plans to use its cash and cash equivalents on hand, and the proceeds from the Consulting Agreement, to maintain the mineral rights acquisition program in Montana and to pay its operating costs.
Planning future expansion.
No warrants were issued during the first two quarters of fiscal years 2021 or 2020. As of November 30, 2020, there were 5,374,501 warrants remaining to be exercised at a price of $0.70 per share to Sunrise Securities Corporation to satisfy the finders’ fee obligation associated with the Alleghany transaction. The warrants will expire June 14, 2021 and are currently exercisable.
http://www.sunrisecorp.com/#:~:text=Sunrise%20Securities*%20("Sunrise",80%20domestic%20and%20international%20companies.
So instead of paying the fees associated with the Alleghany deal, they issued warrants to an Investment bank, which will expire in 5 months. So on June 14, 2021 if the Bank wants in on the action, they have to pony up $3,762,150.70
The Outstanding number of shares is 54,514,765, and has been that amount for the past 3 years. The float is 19,493,232.
But what is even more impressive to me, as a former banker,
The balance sheet is DEVOID OF GOODWILL.
The balance sheet is DEVOID OF INTANGIBLES.
saving nickels saving dimes
working till the sun don't shine
looking forward to happier times
1963, Roy Orbison - On Blue Bayou
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