Unassociated Document
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 (Date of earliest event reported): September 21, 2009 (September 15,
2009)
TETON
ENERGY CORPORATION
(Exact
name of registrant as specified in its charter)
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Delaware
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001-31679
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84-1482290
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(State
of incorporation)
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(Commission
File No.)
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(IRS
Employer
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Identification
No.)
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600
17th Street, Suite 1600 North
Denver,
CO
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80202
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (303) 565-4600
(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 (see General Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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INFORMATION ABOUT FORWARD-LOOKING
STATEMENTS
This
Current Report on Form 8-K of Teton Energy Corporation (“Teton,” the “Company,”
“we,” “us” or “our”), and the documents incorporated by reference, contain both
historical and “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. Forward-looking statements,
written, oral or otherwise made, represent the Company’s expectation or belief
concerning future events. All statements, other than statements of historical
fact, are or may be forward-looking statements. For example, statements
concerning projections, predictions, expectations, estimates or forecasts, and
statements that describe our objectives, future performance, plans or goals are,
or may be, forward-looking statements. These forward-looking statements reflect
management’s current expectations concerning future results and events and can
generally be identified by the use of words such as “may,” “will,” “should,”
“could,” “would,” “likely,” “predict,” “potential,” “continue,” “future,”
“estimate,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” and
other similar words or phrases, as well as statements in the future
tense.
Forward-looking
statements involve known and unknown risks, uncertainties, assumptions, and
other important factors that may cause our actual results, performance, or
achievements to be different from any future results, performance and
achievements expressed or implied by these statements. The following important
risks and uncertainties could affect our future results, causing those results
to differ materially from those expressed in our forward-looking
statements:
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Our
ability to execute our Feasibility Plan in order to sustain our ability to
continue as a going concern;
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Our
ability to service current and future indebtedness and comply with the
covenants related to the debt facilities or our ability to receive
forbearance therefrom;
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General
economic and political conditions, including governmental energy policies,
tax rates or policies, inflation rates and constrained credit
markets;
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The
market price of, and supply/demand balance for, oil and natural
gas;
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Our
success in completing development and exploration activities, when and if
we are able to resume those activities;
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Expansion
and other development trends of the oil and gas
industry;
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Acquisitions
and other business opportunities that may be presented to and pursued by
us;
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Our
ability to integrate our acquisitions into our company structure;
and
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Changes
in laws and regulations.
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These
factors are not necessarily all of the important factors that could cause actual
results to differ materially from those expressed in any of our forward-looking
statements. Other factors, including unknown or unpredictable ones could also
have material adverse effects on our future results.
The
forward-looking statements included in this Current Report are made only as of
the date set forth on the front of the document. We expressly disclaim any
intent or obligation to update any forward-looking statements to reflect new
information, subsequent events, changed circumstances, or
otherwise.
Item 1.01 Entry into a Material
Definitive Agreement.
Effective
as of September 15, 2009, (the “Effective Date”), Teton Energy Corporation the
“Company”) entered into a letter agreement (the “Letter Agreement”) with
JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent, and each
of the financial institutions identified therein (hereinafter collectively
referred to as the “Lenders”) amending the Third Amendment to the Second Amended
and Restated Credit Agreement and Forbearance Agreement which was entered into
effective as of August 26, 2009 (the “Third Amendment”). All
capitalized terms not defined herein shall have the meaning set forth in the
Letter Agreement and Third Amendment incorporated by reference
therein.
Under the
terms of the Letter Agreement:
(a) The
Company, the Administrative Agent, and each of the Lenders agreed to forbear
from exercising their rights and remedies as a result of the Specified Default
(the Company’s failure to repay the Borrowing Base Deficiency of $8,484,296 on
August 25, 2009) under the Loan Documents to (i) accelerate the
outstanding principal balance of the Loans; and (ii) to commence
foreclosure proceedings under the Security Instruments, during the period from
the Effective Date until the earlier of (A) the occurrence of any Default
or Event of Default other than the Specified Defaults, or (B) 5:00 p.m.,
September 30, 2009 (Dallas, Texas time).
(b) The
definition of Indebtedness was revised to include amounts owing or to be owed by
the Company, its Subsidiaries or Guarantors created or arising in connection
with treasury management services provided to the Company, its Subsidiaries or
Guarantors by any Lender or its Affiliates; and
(c) The
Company agreed to extend, from September 15, 2009 to September 30, 2009, the
date to obtain fully executed account control agreements in a form and substance
satisfactory to the Administrative Agent and the Majority Lenders covering all
of the Company’s and its subsidiaries’ deposit accounts including, without
limitation, accounts held at Wells Fargo Bank, N.A.
The
Company, from time to time, enters into commodity hedge agreements to mitigate a
portion of the potential exposure to adverse market changes in the prices of oil
and natural gas, with JPMorgan Chase. There are no other material relationships
between the Company or its affiliates and JPMorgan Chase or the lenders, other
than in respect to the Third Amendment, as amended.
The
foregoing summary of the Letter Agreement is qualified in its entirety by
reference to the definitive transaction document, a copy of which is attached as
Exhibit 10.1 to this Current Report.
Item 2.03 Creation of
a Direct Financial Obligation or an Obligation under an Off Balance Sheet
Arrangement of a Registrant
The
information included in Item 1.01 of this Current Report is hereby
incorporated by reference into this Item 2.03.
Item
3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On
September 16, 2009, the Company received notice from the Listing Qualifications
department of The NASDAQ Stock Market (“NASDAQ”) indicating that the Company is
not in compliance with the $1.00 minimum bid price requirement for continued
listing set forth in NASDAQ Marketplace Rule 5550(a)(2).
The
NASDAQ notice indicated that, in accordance with NASDAQ Marketplace
Rule 5810(c)(3)(A), the Company will be provided a grace period of 180
calendar days (until March 15, 2010) to regain compliance. If,
at any time during this grace period the bid price of the Company’s common stock
closes at $1.00 per share or more for a minimum of ten consecutive business
days, NASDAQ Staff will provide the Company with written notification that it
has achieved compliance with Rule 5550(a)(2), and the matter will be
closed.
If the
Company does not regain compliance with Rule 5550(a)(2) prior to
March 15, 2010, NASDAQ Staff will provide the Company with written
notification that its securities are subject to delisting from The NASDAQ
Capital Market. At that time, the Company may appeal the delisting determination
to a Hearing Panel.
Alternatively,
if the Company fails to regain compliance with Rule 5550(a)(2) prior to
March 15, 2010, but meets all of the other applicable standards for initial
listing on the NASDAQ Capital Market, with the exception of the minimum bid
price, then the Company will have an additional 180 calendar days to regain
compliance with Rule 5550(a)(2).
A copy of
the Company’s press release announcing the receipt of the NASDAQ letter is
attached hereto as Exhibit 99.1.
Item
8.01 Other Events.
The
Company is also reporting that the forbearance period related to the interest
payment due on the Company’s outstanding 10.75% Senior Secured Convertible
Debentures (the “Debentures”) has been extended through and including September
30, 2009.
The
Company intends to continue to work with the holders of the Debentures towards a
more permanent solution, however, there can be no assurance that the Company
will be successful in doing so, in which case the Company may, among other
options, be required to seek protection under the United States Bankruptcy
Code.
Item 9.01 Financial
Statements and Exhibits
(a) Financial
statements of businesses acquired
N/A
(b) Pro
forma financial information
N/A
(c) Shell
company transactions
N/A
(d) Exhibits
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Exhibit
No.
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Description
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10.1
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Letter
Agreement amending Third Amendment to Second Amended and Restated Credit
Agreement and Forbearance Agreement.
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99.1
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Press
Release dated September 21, 2009.
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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.
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Dated:
September 21, 2009
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TETON
ENERGY CORPORATION
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By:
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/s/
Jonathan Bloomfield
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Jonathan
Bloomfield
Chief
Financial Officer
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INDEX
TO EXHIBITS
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Exhibit
No.
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Description
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10.1
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Letter
Agreement amending Third Amendment to Second Amended and Restated Credit
Agreement and Forbearance Agreement.
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99.1
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Press
Release dated September 21, 2009.
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