Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: December 22, 2014
THREE FORKS, INC.
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(Exact name of registrant as specified in its charter)
Colorado 000-55033 45-4915308
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification Number)
PO BOX 1510, JOHNSTOWN, COLORADO 80534
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(Address of Principal Executive Offices) (Zip Code)
(303)-404-2160
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Registrant's telephone number, including area code
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(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))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
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Certain disagreements have arisen between the Company's management and certain
investors concerning, inter alia, management and direction of the Company;
employees, compensation, use of proceeds and other matters concerning the
operation of the Company, and, in light of the costs, delays and uncertainties
attendant to any continued dispute or litigation regarding matters related to
the Company's business, the parties agreed to compromise their differences and
settle and resolve all matters in controversy between them.
On November 27, 2014, a Resignation and Settlement Agreement (the "Settlement
Agreement") was entered into by and among Three Forks, Inc. (the "Company"), W.
Edward Nichols ("Nichols"), Donald Walford ("Walford"), Charles Pollard
("Pollard"), Paul Dragul ("Dragul"), William Young ("Young"), (Nichols, Walford,
Pollard, Dragul and Young shall be referred to as the "Exiting Persons"), Tim R.
Dender ("Dender"), Alex D. Withall ("Withall"), Texas Tea Associate Group, LLC,
a Georgia limited liability company ("TTAG"), Enterprise Opportunities
Corporation, a Georgia corporation ("EOC"), CPC International Corporation, a
Georgia corporation ("CPC") and Thomas A. Ness ("Ness") (Dender, Withall, TTAG,
EOC, CPC and Ness shall be referred to as the "Designated Investors").
In connection with the Settlement Agreement, Resource Recovery LLC ("Resource
Recovery"), will cause the remaining outstanding balance of $1,175,000 due under
by the Company from Guaranty Bank and Trust (`Guaranty Bank") dated May 9, 2014
in the original principal amount of $1,200,000.00 (the "Loan") to paid off (the
"Loan Payoff") by way of assignment of the Loan from Guaranty Bank to Resource
Recovery. In addition as a condition to such payment by Resource Recovery
thereof, the Company shall simultaneously pay all interest, fees and other costs
due under the Loan to Guaranty Bank.
The information contained in this report has been provided by the former
management.
SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT
ITEM 5.01 CHANGES IN CONTROL OF REGISTRANT.
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Certain parties to the Settlement Agreement, including former CEO W. Edward
Nichols, former CEO Donald Walford, Charles Pollard and William Young, also
agreed to reduce their ownership in stock and options of the Company as further
described in the Settlement Agreement and herein.
VOTING SECURITIES
As of the date of this filing, the authorized capital stock of the Company
consisted of (i) 100,000,000 shares of Common Stock, of which 11,697,677 shares
are outstanding as of November 27, 2014 and (ii) 25,000,000 shares of Class A
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Preferred Convertible Stock (the "Class A Preferred Stock") of which no shares
are outstanding.
Each share of Common Stock is entitled to one vote with respect to all matters
to be acted on by the stockholders. Each share of Class A Preferred Stock has a
deemed purchase price of $4.50 per share and have voting rights equivalent to
their conversion rate, one (1) share of Class A Preferred Stock equals one (1)
share of common stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of:
o the shares of Common Stock immediately prior to the Effective Date
based on 11,697,677 shares outstanding; and o the shares of Common
Stock immediately after the Effective Date, based on 8,767,677 shares
outstanding;
o each current director and executive officer of Company and each person
nominated to become a director following the Effective Date;
o all current executive officers and directors of the Company as a group
(including in the post-Effective Date chart, only the director
nominees and not the current directors); and
o each person known by the Company to own beneficially more than 5% of
the outstanding shares of Common Stock.
Beneficial ownership has been determined in accordance with applicable SEC
rules, under which a person is deemed to be the beneficial owner of securities
if he or she has or shares voting power or investment power with respect to such
securities or has the right to acquire beneficial ownership within 60 days.
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BEFORE THE SETTLEMENT AGREEMENT DATE
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AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL PERCENT OF
(1) OWNER(2) CLASS (2)
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5% OR GREATER OWNERS:
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Shareholders of Gulfstar Energy Corp. (3) 699,517 5.97%
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Donald Walford (4) 1,980,000 16.85%
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DIRECTORS AND EXECUTIVE OFFICERS:
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W. Edward Nichols, Chief Executive 2,050,000 17.45%
Officer, Chairman of the Board &
Secretary (5)
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Terrence R. Manning, Former President & Chief 240,000 2.01%
Operating Officer (6)
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Charles Pollard, Director, Former President, 2,300,000 16.43%
Chief Operating Officer & CEO of TFI Operating
Company, Inc. (7)
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William Young, Director (8) 529,395 4.33%
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Paul Dragul, Director (9) 187,000 1.60%
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All Directors and Executive Officers as a 5,306,395 41.82%
Group (5 persons)
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(1) The address of each person or entity listed above, unless otherwise
indicated, is c/o Three Forks, Inc., PO Box 1510, Johnstown, Colorado 80534.
(2) Based upon 11,697,677 shares issued and outstanding on November 27, 2014
adjusted by any shares which the listed person has the right to acquire as a
result of their options being considered exercised within 60 days of the
Effective Date.
(3) Gulfstar Energy agreed to sell certain mineral interest to the Company for
cash and stock in September 2012. The transaction closed and 699,517 shares of
the Company are held by the shareholders of Gulfstar. Gulfstar is in a voluntary
liquidation. We have agreed to include the 699,517 shares in a registration
statement on Form S-1 to register the shares for distribution to the Gulfstar
shareholders for re-sale by these shareholders. These shares are not included in
a registration statement. The timing of such registration has not been
established at the time of this filing.
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(4) Mr. Walford resigned as an Officer of the Company on January 28, 2014 and as
a Director on February 27, 2014. Mr. Walford holds an option exercisable for
50,000 shares of our common stock with a term of 3 years and an exercise price
of $1.00 per share.
(5) Mr. Nichols holds an option exercisable for 50,000 shares of our common
stock with a term of 3 years and an exercise price of $1.00 per share.
(6) Mr. Manning holds an option exercisable for 1,200,000 shares of our common
stock. The options have (i) a $0.10 / share option strike price; (ii) a term of
5 years; (iii) a cashless exercise; (iv) a three-year vesting period with 10% of
the options vesting upon the execution of his employment agreement with the
Company dated June 10, 2014; (v) the remaining options vest ratably over 3 years
commencing July 1, 2014. Accordingly, only 240,000 shares under option are
considered exercised. Mr. Manning resigned as an officer as of October 31, 2014.
(7) Mr. Pollard holds an option exercisable for 2,250,000 shares of our common
stock. The option has a term of 3 years and an exercise price of $0.10 per
share. The option does provide for a cashless exercise. Mr. Pollard also holds
an option exercisable for 50,000 shares of our common stock with a term of 3
years and an exercise price of $1.00 per share. Accordingly, 2,300,000 shares
under option are considered exercised. Mr. Pollard held a Secured Convertible
Promissory Note for $300,000 convertible into shares of our common stock at
$3.60 per share. On June 17, 2014, Mr. Pollard resigned as an officer of the
Company and prior to his resignation the Secured Convertible Promissory Note was
paid in full on May 8, 2014.
(8) Mr. Young holds an option exercisable for 100,000 shares of our common
stock. The option has a term of 3 years and an exercise price of $0.10 per
share. The option does provide for a cashless exercise. Mr. Young also holds an
option exercisable for 25,000 shares of our common stock with a term of 3 years
and an exercise price of $1.00 per share. Mr. Young is to receive 4,395 shares
of our common stock, which are currently held in escrow on behalf of the
Gulfstar shareholders.
(9) Mr. Dragul holds 137,000 shares of common stock directly and 25,000 shares
indirectly through NTC& Co for the benefit of Paul Dragul. In addition, Mr.
Dragul holds an option exercisable for 25,000 shares of our common stock with a
term of 3 years and an exercise price of $1.00 per share.
Rule 13d-3 under the Securities Exchange Act of 1934 governs the
determination of beneficial ownership of securities. That rule provides that a
beneficial owner of a security includes any person who directly or indirectly
has or shares voting power and/or investment power with respect to such
security. Rule 13d-3 also provides that a beneficial owner of a security
includes any person who has the right to acquire beneficial ownership of such
security within sixty days, including through the exercise of any option,
warrant or conversion of a security. Any securities not outstanding which are
subject to such options, warrants or conversion privileges are deemed to be
outstanding for the purpose of computing the percentage of outstanding
securities of the class owned by such person. Those securities are not deemed to
be outstanding for the purpose of computing the percentage of the class owned by
any other person. Included in this table are only those derivative securities
with exercise prices that the Company believes have a reasonable likelihood of
being "in the money" within the next sixty days.
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FOLLOWING THE SETTLEMENT AGREEMENT DATE AND AS OF THE
EFFECTIVE DATE (DECEMBER 12, 2014)
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AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OWNER(2) CLASS (2)
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5% OR GREATER OWNERS:
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Shareholders of Gulfstar Energy Corp. (3) 699,517 7.98%
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W. Edward Nichols 500,000 5.70%
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Donald Walford 500,000 5.70%
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Charles Pollard 500,000 5.70%
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DIRECTORS AND EXECUTIVE OFFICERS:
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Thomas A. Ness, President and Chief Operating 160,500 1.81%
Officer (4)
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Timothy R. Dender, Chairman and Director (5) 166,667 1.90%
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Alex D. Withall, Director (6) 280,000 3.19%
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Charles W. Jones (7) 110,000 1.24%
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All Directors and Executive Officers 717,167 8.14%
as a Group (4 persons)
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(1) The address of each person listed below, unless otherwise indicated, is c/o
Three Forks, Inc., PO Box 1510, Johnstown, Colorado 80534.
(2) Based upon 8,767,677shares issued and outstanding on the Effective Date
adjusted by any shares which the listed person has the right to acquire as a
result of their options being considered exercised within 60 days of the
Effective Date.
(3) Gulfstar Energy agreed to sell certain mineral interest to the Company for
cash and stock in September 2012. The transaction closed and 699,517 shares of
the Company are held by the shareholders of Gulfstar. Gulfstar is in a voluntary
liquidation. We have agreed to include the 699,517 shares in a registration
statement on Form S-1 to register the shares for distribution to the Gulfstar
shareholders for re-sale by these shareholders. These shares are not included in
a registration statement. The timing of such registration has not been
established at the time of this filing.
(4) Mr. Ness holds options exercisable for 310,000 shares of our common stock.
Options for 300,000 shares have (i) a $.10 / share option strike price, (ii) a
term of 4 years and (iii) a cashless exercise. Mr. Ness also owns another option
to purchase 10,000 shares that has (i) a $1.00 per share option strike price,
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(ii) a term of 3 years and (iii) a cashless exercise. Accordingly, 110,000
options are considered exercisable within 60 days.
(5) Mr. Dender holds a warrant to purchase 400,000 shares of common stock. The
warrant has (i) a $1.00 / share warrant strike price, (ii) a term of 5 years and
(iii) a cashless exercise and is exercisable commencing December 1, 2015.
(6) Mr. Withall holds no options to purchase common stock.
(7) Mr. Jones holds a warrant to purchase 100,000 shares of common stock. The
warrant has (i) a $1.00 / share warrant strike price, (ii) a term of 2 years and
(iii) a cashless exercise.
Rule 13d-3 under the Securities Exchange Act of 1934 governs the
determination of beneficial ownership of securities. That rule provides that a
beneficial owner of a security includes any person who directly or indirectly
has or shares voting power and/or investment power with respect to such
security. Rule 13d-3 also provides that a beneficial owner of a security
includes any person who has the right to acquire beneficial ownership of such
security within sixty days, including through the exercise of any option,
warrant or conversion of a security. Any securities not outstanding which are
subject to such options, warrants or conversion privileges are deemed to be
outstanding for the purpose of computing the percentage of outstanding
securities of the class owned by such person. Those securities are not deemed to
be outstanding for the purpose of computing the percentage of the class owned by
any other person. Included in this table are only those derivative securities
with exercise prices that the Company believes have a reasonable likelihood of
being "in the money" within the next sixty days.
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
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As a result of the transaction, Pollard and Dragul resigned as directors of the
Company and from all other executive positions with the Company and all
committees of the Company simultaneously with the Loan Payoff. These former
Company Directors' have resigned as directors of the Company, effective ten days
after the mailing (December 12, 2014) of the Notice to Shareholders on Form
14F-1 (the "Effective Date"). Bill Young resigned as a Director on December 14,
2014 and effective December 15, 2014, W. Edward Nichols resigned his position as
Chief Executive Officer and Director. Pollard, Dragul, Young and Nichols shall
be collectively referred to as "Former Directors". Certain of the Former Company
Directors executed Board resolutions to appoint Dender, Withall and Charles W.
Jones, ("Incoming Directors") as directors to replace the Former Company
Directors, which was effective upon the resignation of such directors as
provided in the Settlement Agreement and the expiration of the ten-day notice
period under ss.240.14f-1.
The Board appointed Thomas A. Ness as President and Chief Operating Officer.
Timothy R. Dender, Alex D. Withall and Charles W. Jones were also appointed to
the Board of Directors, effective December 15, 2014. Timothy R. Dender was also
appointed Chairman.
Current biographies of the officers and directors are as follows:
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NAME AGE POSITION
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Thomas A. Ness 36 President and Chief Operating Officer
Timothy R. Dender 45 Chairman and Director
Alex D. Withall 44 Director
Charles W. Jones 62 Director
THOMAS A. NESS, PRESIDENT & CHIEF OPERATING OFFICER. Mr. Ness has held the
position of Director of Development for Inland Real Estate Development, one of
Chicago's largest development companies, since 1997. Mr. Ness was responsible
for delivering 100+ build ready lots to national and private homebuilders during
the most prolific homebuilding area in modern history. Mr. Ness was also
responsible with working with and providing build ready lots for America top
retail chains, such as Menards, Wal-Mart and Sams Club, JC Penny's, Office Max,
and Meijer. Mr. Ness has worked in many facets of the construction business in
the Chicagoland area. From 2004 to 2007, Mr. Ness worked for a top 5 Chicago
private developer and national homebuilder where he was responsible for managing
20 large scale residential and commercial developments totaling $100 million.
From 2001 to 2004, Mr. Ness worked for Engineering Enterprises where he was a
senior field technician working with fortune 500 national homebuilders and local
municipalities. Mr. Ness is a 2000 graduate of Aurora University, where he
majored in Business Administration.
TIMOTHY R. DENDER, CHAIRMAN AND DIRECTOR; President of Dender Distributing
Company, an independent beer and beverage wholesaler based in Griffin, Georgia.
Mr. Dender has worked in various positions with this company for the past 30
years. Mr. Dender attended Gordon College for two years ending on or about 1994.
ALEX D. WITHALL, DIRECTOR; Mr. Withall has been retired for the last three
years. From 1993 through 2011, Mr. Withall was employed by Miner Enterprises, a
family-owned Geneva, Illinois based supplier of shock protection equipment to
the railroad industry. Mr. Withall was the Director of Human Resources at Miner
and held other positions as well, including Purchasing Agent, who bought scrap
steel from various suppliers. Mr. Withall attended College of DuPage and the
University of Michigan in 1991.
CHARLES W. JONES, DIRECTOR. Mr. Jones is the owner of Ann Imes & Associates,
LLC, a residential real estate firm located in Griffin, Georgia. Mr. Jones
purchased the real estate firm in 2002. Mr. Jones attended Valdosta State
University in 1971.
The Directors will be appointed by the current Board of Directors for a two-year
term to hold office or until the next annual general meeting of the Company's
stockholders or until removed from office in accordance with the Company's
Bylaws ("Bylaws") and the provisions of the Colorado Revised Statutes. Each of
the Company's directors will hold office after the expiration of his or her term
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until his or her successor is elected and qualified, or until he or she resigns
or is removed in accordance with the Bylaws and the provisions of the Colorado
Revised Statues.
Each of the Former Company Directors and Donald Walford covenant and agrees not
to serve or stand for election or reelection in the future as an officer,
director, executive officer, committee member, employee or consultant of the
Company or any of its affiliates or act as a nominee or agent thereof.
SECTION 8 - OTHER EVENTS
ITEM 8.01 OTHER EVENTS.
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The Company intends to implement a business plan that is dedicated to acquiring,
developing and operating interest in oil and gas leases.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
(D) EXHIBITS. The following is a complete list of exhibits filed as part of this
Report. Exhibit numbers correspond to the numbers in the exhibit table of Item
601 of Regulation S-K.
EXHIBIT NO. DESCRIPTION
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10.1 Resignation and Settlement Agreement dated November 27, 2014
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SIGNATURES
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.
THREE FORKS, INC.
By: /s/ Thomas A. Ness
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Thomas A. Ness, President
Date: December 22, 2014
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