XML 21 R12.htm IDEA: XBRL DOCUMENT v2.4.0.6
Subsequent Events
3 Months Ended
Mar. 31, 2012
Notes to Financial Statements  
Note 7.Subsequent Events

In May 2012, the Company entered into a subscription agreement with accredited investors pursuant to which the Company sold 1,000,000 Units, each Unit consisting of one share of the Company’s common stock, par value $0.001, and a warrant to purchase 0.375 shares of the Company’s common stock (the “Warrants”) for aggregate consideration of $50,000. The Warrants shall be exercisable for a period of two years from the date of issuance at an initial exercise price of $0.20. The Company paid cash financing fees of $5,000 and issued 150,000 warrants under the same terms.

 

Between June and September 2012, the Company issued to certain accredited investors, new 14% Convertible Notes with a principal amount of $200,000. These notes have the same terms as the 14% Notes issued in 2011.  In addition, the investors also received warrants to purchase 500,000 shares of the Company’s common stock at an exercise price of $0.20 and exercisable for a period of two years from the date of issuance. The Company paid cash financing fees of $20,000 and issued 50,000 warrants under the same terms.

 

On September 6, 2012, the Company announced that it had signed a contract with Ranchland Hills Golf Club, Midland, TX, to design, build and deliver a proprietary water desalinization facility to produce 700,000 gallons of water a day by converting brackish well water into the equivalent of rain water to maintain the greens and fairways of the golf course. Under terms of the agreement, STW has received a down payment of $400,500 and will collect additional manufacturing milestone payments to engineer and install customized equipment that adds proprietary technology and chemicals to a desalinization membrane technology to increase the amount of fresh water recovered and lower the cost of operation. As of the date of this report, the Company has delivered and installed the equipment related to this contract.

 

On November 27, 2012, STW entered into subscription agreements (the “Subscription Agreements”) with three accredited investors (each an “Investor” and collectively, the “Investors”), providing for the sale by the Company to the Investors of a 14% convertible note (each a “Note” and collectively, the “Notes”) for aggregate gross proceeds of $300,000. The Notes mature on the second anniversary of the date of issuance (the “Maturity Date”) and bear interest at a rate of 14% per annum, of which 6% shall be paid in cash semi-annually in arrears and the remaining 8% shall accrue until the Maturity Date. The Investors may convert, at any time, the outstanding principal and accrued interest on the Notes into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) at a conversion price equal to $0.08 per share, subject to adjustment (the “Conversion Price”).

 

In connection with the purchase of the Notes, each Investor received a warrant to purchase such number of shares of Common Stock of the Company equal to 50% of the number of shares of Common Stock issuable upon exercise of such Investor’s Note on the date of issuance (or an aggregate of 1,875,000 shares of Common Stock) (collectively, the “Warrants”). The Warrants are exercisable for a period of two years from the date of issuance at an initial exercise price of $0.20 per share, subject to adjustment (the “Exercise Price”).

 

The Conversion Price and the Exercise Price are subject to customary adjustments for stock splits, stock dividends, and recapitalizations.

 

A FINRA registered broker-dealer was engaged as placement agent in connection with the private placement. We paid the placement agent a cash fee in the amount of $30,000 (representing a 10% sales commission) and will issue the placement agent a warrant to purchase 187,500 shares of Common Stock with an exercise price of $0.20 per share.

 

On January 8, 2013, STW and Black Pearl Energy, LLC, an entity controlled by Stan Weiner and Lee Maddox, the Company’s Chief Executive Officer and Chief Operating Officer, respectively (“BPE”), entered into an equity exchange agreement (the “Agreement”) pursuant to which BPE transferred 10% of the outstanding membership interests of Black Wolf Enterprises, LLC, (“Black Wolf”) to the Company in exchange for 7,000,000 shares of the Company’s common stock, which shares will be issued once the Company amends its articles of incorporation, as amended, to increase the number of authorized shares of common stock. The transactions contemplated by the Agreement closed on January 8, 2013. Black Wolf currently commercializes the expertise and services of Lone Wolf Resources, LLC, an environmental and civil construction company operating in the oil and gas industry (“Lone Wolf”). Lone Wolf has worked with the Department of Transportation and the Texas Commission on environmental quality to shape the standards for processing hydrocarbon-impacted soils to a reusable road base. Lone Wolf has completed projects internationally and throughout the United States, including the world's largest in-situ thermal remediation project. BPE is an oilfield service company that has developed an evaporation cover that is conservation friendly, economical and can be floated on to existing ponds or installed during construction for the elimination of evaporation on frac ponds used throughout the oilfield. BPE also provides high quality liners with fusion-welded seams, quality control testing including air tests of seams and destruction testing in West Texas and Eastern New Mexico, and intends to expand into South Texas during the first quarter of this year. Black Wolf combines Lone Wolf’s and BPE’s services and constructs drill sites, reserve pits, frac ponds, roads, pit closings, liners, leak detection systems, evaporation covers, and provides associated maintenance. Black Wolf also offers turnkey services for H-11 permitted ponds, including surveys, engineering and design, and permitting for storage of produced and brine waters as well as utilizes proprietary technologies employed by Lone Wolf in the reclamation of hydrocarbon-impacted soils. Black Wolf is currently negotiating on a number of multi-well packages with many of the largest oil and gas producers in West Texas.