10-Q 1 snre10-qfy2015q1.htm 10-Q SNRE 10-Q FY2015 Q1
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q 
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2015
Commission File Number: 53915 

SABLE NATURAL RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
 
84-1080045
(State or other jurisdiction of
 incorporation or organization)
 
(I.R.S. Employer
 Identification No.)
12222 Merit Drive, Suite 1850
Dallas, Texas
 
75251
(Address of principal executive offices)
 
(Zip Code)
972-770-4700
(Registrant’s telephone number, including area code) 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨
 
Accelerated filer ¨
 
Non-accelerated filer ¨
 (Do not check if a
smaller reporting company)
 
Smaller reporting company x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨  No x
As of April 30, 2015 the registrant had 35,157,501 shares of common stock outstanding.
 



TABLE OF CONTENTS
 
 
 
 
Page
 
 
 
 
FINANCIAL INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OTHER INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


FORWARD-LOOKING STATEMENTS 
The statements contained in all parts of this document relate to future events, including, but not limited to, any and all statements regarding future operations, financial results, business plans and cash needs and other statements that are not historical facts are forward looking statements.  When used in this document, the words “anticipate,” “budgeted,” “planned,” “targeted,” “potential,” “estimate,” “expect,” “may,” “project,” “believe” and similar expressions are intended to be among the statements that identify forward looking statements. Such statements involve known and unknown risks and uncertainties, including, but not limited to, those relating to the current economic and credit environment, the volatility of natural gas and oil prices, our dependence on our key personnel, factors that affect our ability to manage our growth and achieve our business strategy, technological changes, our significant capital requirements, our ability to continue as a going concern, the potential impact of government regulations and the taxation of the oil and gas industry, adverse regulatory determinations, litigation, competition, availability of drilling, completion and production equipment and materials, business and equipment acquisition risks, weather, availability of financing and the terms of any such financing, financial condition of our industry partners, ability to obtain permits, drilling and completion of wells, infrastructure for salt water disposal, costs of exploiting and developing our properties and conducting other operations, the ability to obtain financing for drilling activities, competition in the oil and natural gas industry, developments in oil producing and natural gas producing countries, and other factors detailed herein. Some of the factors that could cause actual results to differ from those expressed or implied in forward-looking statements are described under “Risk Factors” and in our Form 10-K for the year ended December 31, 2014 filed with the U.S. Securities and Exchange Commission.  Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement and we undertake no obligation to update or revise any forward-looking statement.

3

PART I
Item 1.  Financial Statements
SABLE NATURAL RESOURCES CORPORATION
Consolidated Balance Sheets 
 
 
March 31, 2015 (Unaudited)
 
December 31, 2014
Assets
 
 

 
 

Current assets:
 
 

 
 

Cash and cash equivalents
 
$
426,427

 
$
205,999

Accounts receivable, net
 
82,830

 
117,833

Inventory
 
22,804

 
59,385

Prepaid expenses and other
 
92,295

 
91,480

Total current assets
 
624,356

 
474,697

 
 
 
 
 
Restricted cash
 
2,986,204

 
2,986,154

Oil & gas properties and equipment, net
 
11,800,290

 
11,665,160

Deferred financing costs
 
2,925,728

 
3,209,168

Deposits and other
 
265,739

 
262,697

 
 
 
 
 
Total assets
 
$
18,602,317

 
$
18,597,876

 
 
 
 
 
Liabilities and stockholders’ equity (deficit)
 
 

 
 

Current liabilities:
 
 

 
 

Accounts payable and accrued expenses
 
$
1,905,590

 
$
1,674,295

Accounts payable - related party
 
480,000

 
480,000

Accrued liabilities
 
697,371

 
414,567

Revenues payable
 
71,107

 
69,548

Debt - current portion
 
536,709

 
282,791

Total current liabilities
 
3,690,777

 
2,921,201

 
 
 
 
 
Other liabilities:
 
 

 
 

Debt
 
12,164,309

 
10,681,124

Accrued working interest
 
2,911,872

 
3,053,272

Derivative liabilities
 
514,950

 
617,125

Asset retirement obligation
 
1,295,686

 
1,284,771

 
 
 
 
 
Total liabilities
 
20,577,594

 
18,557,493

 
 
 
 
 
Commitments and contingencies
 


 


 
 
 
 
 
Mezzanine equity:
 
 

 
 

Preferred stock, Series A convertible, $0.001 par value; and redemption value of 3,724,004 at September 30, 2014 and December 31, 2013
 
3,724,004

 
3,724,004

 
 
 
 
 
Stockholders’ equity (deficit):
 
 

 
 

Common stock, $0.001 par value; 200,000,000 shares authorized; 36,158,542 shares issued and 35,157,501 outstanding at March 31, 2015 and 36,158,542 shares issued and 35,157,501 outstanding at December 31, 2014
 
36,158

 
36,158

Additional paid-in capital
 
21,999,647

 
21,947,952

Treasury stock, at cost: 1,001,041 shares at September 30, 2014 and December 31, 2013
 
(1,860,233
)
 
(1,860,233
)
Accumulated deficit
 
(25,874,853
)
 
(23,807,498
)
Accumulated other comprehensive loss
 
—

 
—

Total stockholders’ equity (deficit)
 
(5,699,281
)
 
(3,683,621
)
 
 
 
 
 
Total liabilities and stockholders’ equity (deficit)
 
$
18,602,317

 
$
18,597,876

See accompanying Notes to Consolidated Financial Statements

4


SABLE NATURAL RESOURCES CORPORATION
Consolidated Statements of Operations
(Unaudited)
 
 
For the Three Months Ended March 31,
 
 
2015
 
2014
Revenues:
 
 

 
 

Land services and other
 
$
1,329

 
$
1,074

Oil and gas sales
 
259,821

 
48,133

Sale of oil and gas interests
 
—

 
27,260

Total revenues
 
261,150

 
76,467

 
 
 
 
 
Operating expenses:
 
 

 
 

Oil & gas lease operating expenses
 
530,532

 
37,113

Exploration
 
39,274

 
30,950

Depreciation, depletion, and amortization
 
454,504

 
9,936

Selling, general, and administrative expenses
 
738,370

 
362,390

Total operating expenses
 
1,762,680

 
440,389

 
 
 
 
 
Loss from operations
 
(1,501,530
)
 
(363,922
)
 
 
 
 
 
Other income (expense):
 
 

 
 

Interest and dividend income
 
50

 
77

Deferred financing cost amortization
 
(283,440
)
 
—

Change in value of accrued working interest
 
141,401

 
—

Change in fair value of derivative liabilities
 
102,175

 
—

Interest expense
 
(526,011
)
 
(77,382
)
Total other expense
 
(565,825
)
 
(77,305
)
 
 
 
 
 
Loss before income taxes
 
(2,067,355
)
 
(441,227
)
Income tax benefit (provision)
 
—

 
—

 
 
 
 
 
Net loss
 
$
(2,067,355
)
 
$
(441,227
)
 
 
 
 
 
Basic and diluted earnings per share:
 
 

 
 

Net loss
 
$
(0.06
)
 
$
(0.02
)
 
 
 
 
 
Weighted average shares outstanding
 
 

 
 

Basic and diluted
 
35,157,501

 
26,755,408

 
See accompanying Notes to Consolidated Financial Statements

5

SABLE NATURAL RESOURCES CORPORATION
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
 
 
For the Three Months Ended March 31,
 
 
2015
 
2014
Net loss to common stockholders
 
$
(2,067,355
)
 
$
(441,227
)
 
 
 
 
 
Other comprehensive loss
 
—

 
—

 
 
 
 
 
Comprehensive loss to common stockholders
 
$
(2,067,355
)
 
$
(441,227
)
 
See accompanying Notes to Consolidated Financial Statements

6

SABLE NATURAL RESOURCES CORPORATION
Consolidated Statement of Stockholders’ Equity (Deficit)
(Unaudited)
 
 
Common Stock
 
Additional
Paid-In
Capital
 
Treasury Stock
 
Accumulated
Deficit
 
Accumulated
Other
Comprehensive
Income (Loss)
 
 
 
 
Shares
 
Amounts
 
 
Shares
 
Amounts
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2014
 
36,158,542

 
$
36,158

 
$
21,947,952

 
1,001,041

 
$
(1,860,233
)
 
$
(23,807,498
)
 
$
—

 
$
(3,683,621
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share based compensation
 
—

 
—

 
51,695

 


 


 
 

 
 

 
51,695

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive loss:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Net loss
 
 

 
 

 
 

 
 

 
 

 
(2,067,355
)
 
 

 
(2,067,355
)
Comprehensive loss to common stockholders
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
(2,067,355
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2015
 
36,158,542

 
$
36,158

 
$
21,999,647

 
1,001,041

 
$
(1,860,233
)
 
$
(25,874,853
)
 
$
—

 
$
(5,699,281
)
 
See accompanying Notes to Consolidated Financial Statements

7

SABLE NATURAL RESOURCES CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
 
 
For the Three Months Ended March 31,
 
 
2015
 
2014
Cash flows from operating activities:
 
 

 
 

Net loss
 
$
(2,067,355
)
 
$
(441,227
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 

 
 

Depreciation, depletion, and amortization
 
454,504

 
9,936

Share-based compensation
 
51,695

 
5,505

Share-based debt issuance costs
 
—

 
11,249

Accretion of discount on asset retirement obligations
 
10,915

 
—

Amortization of debt discount
 
123,819

 
16,482

Amortization of deferred financing fees
 
283,440

 
—

Change in accrued working interest liability
 
(141,400
)
 
—

Change in fair value of derivative liabilities
 
(102,175
)
 
—

Gain on sale of oil and gas interest
 
—

 
(27,260
)
Change in working capital:
 
 

 
 

Accounts receivable
 
35,003

 
(12,931
)
Inventories
 
36,581

 
—

Prepaid expenses and other
 
(815
)
 
23,472

Accounts payable and accrued expenses
 
514,099

 
(27,482
)
Deposits held in trust
 
(3,042
)
 
—

Revenues payable
 
1,559

 
(6,805
)
 
 
 
 
 
Net cash provided by (used in) operating activities
 
(803,172
)
 
(449,061
)
 
 
 
 
 
Cash flows from investing activities:
 
 

 
 

Proceeds from sale of oil and gas properties
 
—

 
67,238

Investments in oil and gas properties
 
(589,634
)
 
(17,372
)
Restricted cash
 
(50
)
 
(77
)
 
 
 
 
 
Net cash used in investing activities
 
(589,684
)
 
49,789

 
 
 
 
 
Cash flows from financing activities:
 
 

 
 

Issuance of 13% secured notes
 
1,675,000

 
—

Issuance of 12% convertible debentures
 
—

 
250,000

Borrowings under notes payable
 
—

 
200,000

Payments on notes payable
 
(61,716
)
 
(41,443
)
 
 
 
 
 
Net cash provided by (used in) financing activities
 
1,613,284

 
408,557

 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
220,428

 
9,285

Cash and cash equivalents at beginning of period
 
205,999

 
93,728

 
 
 
 
 
Cash and cash equivalents at end of period
 
$
426,427

 
$
103,013

See accompanying Notes to Consolidated Financial Statements

8

SABLE NATURAL RESOURCES CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1.
Summary of Significant Accounting Policies
General
Sable Natural Resources Corporation (“Sable”) is an independent oil and gas company focused on the acquisition and exploitation of unconventional liquids rich gas and oil reserves in the Fort Worth Basin. The company's strategy is to increase production and expand oil and gas reserves through unconventional recompletions and restimulations of existing conventional wells and the drilling of low risk, high rate-of-return gas and oil wells.
Sable and subsidiaries are collectively referred to herein as the "Company,” “we,” “us,” and “our.”

Basis of Presentation

The consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information.  These financial statements include the accounts of Sable and entities in which it holds a controlling interest.  All intercompany accounts and transactions have been eliminated in consolidation.  Certain prior-period amounts have been reclassified to conform to the current year classification.
The interim financial data as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 is unaudited; in the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary to a fair statement of the results for the interim periods.  The consolidated results of operations for the three months ended March 31, 2015 and 2014 are not necessarily indicative of the results to be expected for the full year.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto as filed in our Annual Report on Form 10-K for the year ended December 31, 2014.  Due to time and financial constraints, this report has not been reviewed by our independent auditors.
Liquidity
We cannot be certain that our existing sources of cash will be adequate to meet our liquidity requirements, including cash requirements that may be due under existing debt obligations as well as amounts due to our vendors in the normal course of business. For the three months ended March 31, 2015, we incurred a net loss of $2,067,355, and have an accumulated deficit totaling $25,874,853, all of which casts substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing from shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due.
We intend to seek substantial sources of liquidity. In addition, management has implemented plans to improve liquidity through cash flows generated from development of new business initiatives within the oil & gas industry and improvements to results from existing operations. There can be no assurance that we will be successful with our plans or that our results of operations will materially improve in either the short-term or long-term and accordingly, we may be unable to meet our obligations as they become due.
A fundamental principle of the preparation of financial statements in accordance with generally accepted accounting principles is the assumption that an entity will continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement of liabilities occurring in the ordinary course of business. This principle is applicable to all entities except for entities in liquidation or entities for which liquidation appears imminent. In accordance with this requirement, our policy is to prepare our consolidated financial statements on a going concern basis unless we intend to liquidate or have no other alternative but to liquidate. Our consolidated financial statements have been prepared on a going concern basis and do not reflect any adjustments that might specifically result from the outcome of this uncertainty. 
Restricted cash
On May 4, 2012, (the “Closing Date”), we entered into an agreement with a third party, FDF Resources Holdings LLC
(the” Purchaser”), which resulted in the sale of 100% of the outstanding interests of FDF. The total consideration for the sale was $62.5 million. In accordance with the Merger Agreement, $6,250,000 of the total consideration was set aside to be held in escrow

9
SABLE NATURAL RESOURCES CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)

and is reported as restricted cash on the accompanying consolidated balance sheets. The funds held in escrow are subject to distribution in accordance with terms set forth in the Merger Agreement. As of March 31, 2015 the balance of $2,986,204 remains for redemption of the Series A convertible preferred stock after May 4, 2015, less any future claims asserted by the buyer pursuant to the terms of the escrow agreement and vetted by Sable, along with direct costs and third party legal fees associated with preserving the escrow fund incurred by Sable.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. Management evaluates its estimates and related assumptions regularly, including those related to proved reserves; the value of properties and equipment; goodwill; intangible assets; asset retirement obligations; litigation liabilities; environmental liabilities; pension assets, liabilities, and costs; income taxes; and fair values. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.

Earnings Per Common Share

Basic earnings per share amounts have been computed based on the average number of shares of common stock outstanding for the period. Diluted earnings per share is calculated using the treasury stock method to reflect the potential dilution that could occur if dilutive share-based instruments were exercised. There is no dilution effect on earnings due to the net loss for the period, however the Company has the following potentially dilutive securities outstanding:

 
March 31, 2015
Warrants
11,892,440

Stock Options
745,000

Restricted Stock
763,333

Series A Convertible Preferred Stock
3,724,004

 
17,124,777




NOTE 2.
PROPERTY AND EQUIPMENT
Property and equipment, which includes our oil and gas properties at March 31, 2015 and December 31, 2014 consist of the following: 
 
 
March 31, 2015
 
December 31, 2014
Oil and gas properties
 
$
12,481,764

 
$
11,903,045

Furniture, fixtures, and equipment
 
359,931

 
359,931

Total property and equipment
 
12,841,695

 
12,262,976

Accumulated DD&A
 
(1,041,405
)
 
(597,816
)
Property and equipment, net
 
$
11,800,290

 
$
11,665,160

 


10
SABLE NATURAL RESOURCES CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)

NOTE 3.
DERIVATIVE LIABILITIES 
At March 31, 2015, we had two derivative liabilities on our consolidated balance sheet related to the warrants issued to the holders of the Company’s Series A Convertible Preferred Stock and the 13% Secured Notes.  The agreements setting forth the terms of the warrants includes an anti-dilution provision that requires a reduction in the instrument’s exercise price should subsequent at-market issuances of the Company’s common stock be issued below the instrument’s original exercise price per share.  Accordingly, we consider the warrants to be a derivative.  The activity for the three months ended March 31, 2015 for these derivatives is as follows:
 
 
Series A Preferred Stock - warrants derivative
 
13% Secured Note - warrants derivative
 
Total Derivative liability
December 31, 2014
 
$
33,300

 
$
583,825

 
$
617,125

 
 
 
 
 
 
 
Change in fair value of derivative liabilities
 
(16,650
)
 
(85,525
)
 
(102,175
)
 
 
 
 
 
 
 
March 31, 2015
 
$
16,650

 
$
498,300

 
$
514,950




11
SABLE NATURAL RESOURCES CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)

NOTE 4.
DEBT 
A summary of our outstanding debt obligations as of March 31, 2015 and December 31, 2014 is presented as follows: 
 
 
March 31, 2015
 
December 31,
2014
13.0% Secured Notes
 
$
11,325,000

 
$
9,650,000

12.0% Convertible Debentures
 
1,950,000

 
1,950,000

Francis Promissory Note (non-interest bearing)
 
200,000

 
225,000

Strasburger Promissory Note (non-interest bearing)
 
84,042

 
105,642

5.5% Insurance Financing
 
60,763

 
68,203

7.5% Secured Equipment Loans
 
130,178

 
137,855

 
 
 
 
 
Total debt
 
$
13,749,983

 
$
12,136,700

 
 
 
 
 
Less: current maturities
 
(536,709
)
 
(282,791
)
 
 
 
 
 
Total long-term debt
 
$
12,164,309

 
$
10,681,124

 
 
 
 
 
Discount - 13% Secured Notes - warrants
 
(924,989
)
 
(1,023,508
)
Discount - 12% Convertible Debentures - warrants
 
(88,908
)
 
(97,760
)
Discount - Francis Note - interest
 
(28,557
)
 
(42,835
)
Discount - Strasburger Note - interest
 
(6,511
)
 
(8,682
)
 
 
 
 
 
Total debt net of discount
 
$
12,701,018

 
$
10,963,915

 
 
 
 
 
Less: current maturities
 
(536,709
)
 
(282,791
)
 
 
 
 
 
Total long-term debt
 
$
12,164,309

 
$
10,681,124

 
 
 
 
 
Debt maturities are as follows:
 
 
 
 
2015
 
$
569,073

 
$
729,345

2016
 
4,655,755

 
3,887,200

2017
 
8,472,001

 
7,467,001

2018
 
28,312

 
28,312

2019
 
24,842

 
24,842

 
 
$
13,749,983

 
$
12,136,700

 


NOTE 5.
COMMITMENTS AND CONTINGENCIES 
Leases
The Company leases office space and office equipment under non-cancelable operating leases which provide for minimum annual rentals.  At March 31, 2015, future minimum obligations under these lease agreements are as follows:
2015
74,052

2016
58,283

2017
—

2018
—

Thereafter
—

 
$
132,335

 

12
SABLE NATURAL RESOURCES CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)

Total lease rental expense for the three months ended March 31, 2015 and 2014 was $42,319 and $10,572 respectively. 
Litigation
We may become involved from time to time in litigation on various matters, which are routine to the conduct of our business.  We believe that none of these actions, individually or in the aggregate, will have a material adverse effect on our financial position or operations, although any adverse decision in these cases, or the costs of defending or settling such claims, could have a material adverse effect on our financial position, operations, and cash flows.
NOTE 6.
STOCKHOLDERS’ EQUITY
Warrants 
The fair value of our warrants is determined using the Black-Scholes option pricing model and the Monte Carlo simulation.  The expected term of each warrant is estimated based on the contractual term or an expected time-to-liquidity event.  The volatility assumption is estimated based on expectations of volatility over the term of the warrant as indicated by implied volatility.  The risk-free interest rate is based on the U.S. Treasury rate for a term commensurate with the expected term of the warrant. 
A summary of warrant activity for the three months ended March 31, 2015 and 2014 is as follows:
 
 
Three Months Ended March 31,
 
 
2015
 
2014
 
 
Warrants
 
Weighted
Average
Exercise
Price
 
Warrants
 
Weighted
Average
Exercise
Price
Outstanding at beginning of period
 
10,971,190

 
$
0.84

 
4,748,690

 
$
1.18

Issued
 
921,250

 
0.50

 
75,000

 
0.75

Exercised
 
—

 
—

 
—

 
—

Forfeited or expired
 
—

 
—

 
—

 
—

Outstanding at end of period
 
11,892,440

 
$
0.77

 
4,823,690

 
$
1.17

 
The following table shows the weighted average assumptions used in the Monte Carlo simulation of the fair value of the warrants issued in the three months ended March 31, 2015:
Volatility
176.63%
Risk-free interest rate
1.07%
Expected life
1.59 Years
Fair value on grant date
$0.08
NOTE 7.
STOCK BASED COMPENSATION 
In November 2012, the Board of Directors adopted the 2013 Equity Incentive Plan for the purpose of attracting and retaining the services of key employees, consultants, and non-employee members of the Board of Directors and to provide such persons with a proprietary interest in the Company through the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, and/or other awards. 
Stock Options 
We utilize the Black-Scholes option pricing model to measure the fair value of stock options granted to employees and directors. Forfeitures are recognized as a reversal of expense of any unvested amounts in the period incurred.

13
SABLE NATURAL RESOURCES CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)

The following table summarizes our stock option activity for the three months ended March 31, 2015:
 
 
Number
of
Shares
 
Weighted
Average
Exercise
Price Per
Share
 
Weighted
Average
Grant Date
Fair Value
Per Share
 
Weighted
Average
Remaining
Contractual
Term - Years
Outstanding, December 31, 2014
 
745,000

 
$
0.15

 
$
0.31

 
9.5
Granted
 
—

 
$
—

 
$
—

 

Exercised
 
—

 
$
—

 
$
—

 

Canceled / Forfeited
 
—

 
$
—

 
$
—

 

Outstanding, March 31, 2015
 
745,000

 
$
0.15

 
$
0.31

 
9.25
Options exercisable at March 31, 2015
 
248,333

 
$
0.15

 
$
0.31

 
9.25
 
 
Restricted stock
Restricted stock awards are awards of common stock that are subject the restrictions on transfer and to a risk of forfeiture if the awardee terminates employment with the Company prior to the lapse of the restrictions.  The fair value of such stock was determined using the closing price on the grant date and compensation expense is recorded over the applicable vesting periods.  Forfeitures are recognized as a reversal of expense of any unvested amounts in the period incurred.
The following table summarizes our restricted stock activity for the three months ended March 31, 2015
 
 
Shares
 
Wtd Avg
Grant-Date
Fair Value
Nonvested, December 31, 2014
 
946,667

 
$
0.28

Granted
 
—

 
$
—

Vested
 
(183,334
)
 
$
0.25

Canceled / Forfeited
 
—

 
$
—

Nonvested, March 31, 2015
 
763,333

 
$
0.29


NOTE 8.
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Our financial instruments include cash and cash equivalents, accounts receivable, marketable securities, accounts payable, derivative liabilities, and long-term debt. Because of their short maturity, the carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value.  The carrying value of certain long-term debt instruments approximates fair value since these instruments bear market rates of interest. Additional non-interest bearing long-term instruments have been reduced by a market interest rate. They approximate fair value as a result of this imputed interest.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs.  We utilize a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.
•
Level 1 — Quoted prices in active markets for identical assets or liabilities.  These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.
•
Level 2 — Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.  These are typically obtained from readily-available pricing sources for comparable instruments.
•
Level 3 — Unobservable inputs, where there is little or no market activity for the asset or liability.  These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

14
SABLE NATURAL RESOURCES CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)

As discussed in Note 3, we consider the warrants issued to the holders of the Company’s 13% Secured Notes and the Series A Convertible Preferred Stock to be derivatives, and, as a result, the fair value of the derivative liabilities are reported on the accompanying consolidated balance sheets.  We value the derivative liabilities using a Monte Carlo simulation, which contains significant unobservable, or Level 3, inputs.  The use of valuation techniques requires us to make various key assumptions for inputs into the model, including assumptions about the expected behavior of the instruments’ holders and expected future volatility of the price of our common stock.  At certain common stock price points within the Monte Carlo simulation, we assume holders of the instruments will convert into shares of our common stock. 
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
March 31, 2015
 
Carrying
Amount
 
Level 1
 
Level 2
 
Level 3
Derivative liabilities
 
$
514,950

 
$
—

 
$
—

 
$
514,950

March 31, 2014
 
Carrying
Amount
 
Level 1
 
Level 2
 
Level 3
Derivative liabilities
 
$
2,510

 
$
—

 
$
—

 
$
2,510

Included below is a summary of the changes in our Level 3 fair value measurements:
Balance, December 31, 2014
$
617,125

Change in derivative liabilities
(108,175
)
Issuance of warrant derivative
6,000

Balance, March 31, 2015
$
514,950

 
 

Balance, December 31, 2013
$
2,510

Change in derivative liabilities
—

Issuance of warrant derivative
—

Balance, March 31, 2014
$
2,510

NOTE 9.
INCOME TAXES
Income tax provision for the three months ended March 31, 2015 and 2014 was $0 and $0, respectively.  At March 31, 2015 and December 31, 2014 we have no deferred tax assets or liabilities included in the consolidated balance sheets.
The balance of the valuation allowance as of December 31, 2014 was $11,199,275.  The anticipated effective income tax rate is expected to continue to differ from the Federal statutory rate primarily due to the effect of state income taxes, permanent differences between book and taxable income, changes to the valuation allowance, and certain discrete items.
NOTE 10.
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Additional cash flow information was as follows for the three months ended March 31, 2015 and 2014:
 
 
2015
 
2014
Supplemental disclosures of cash flow information:
 
 

 
 

Total cash paid for interest
 
$
362,879

 
$
14,500

Total cash paid for taxes
 
$
—

 
—


 
 
2015
 
2014
Supplemental disclosure of non-cash information:

 
 

 
 

Warrants issued

 
$
73,700

 
$
—




15


NOTE 11.  SUBSEQUENT EVENTS

On May 4, 2015 the escrow related to the restricted cash was released. The Company notified the holders of the Series A Convertible Preferred Stock that 3,724,004 shares would be redeemed in exchange for $2,752,725 in cash and 971,279 shares to be re-issued. The final redemption of the escrow balance is as follows:

Final escrow balance
 
2,986,204

 
 
 
Final indemnity claim vetted and settled by Sable
60,000

 
Legal fees incurred by Sable in defending the escrow balance
143,856

 
Time and travel costs incurred by Sable in defending the escrow balance
27,123

 
Administrative costs of effecting the final redemption
2,500

 
   Total costs and final claim
 
233,479

Final cash redemption
 
2,752,725




Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and the notes thereto.
Overview
Sable Natural Resources Corporation (“Sable”) is an independent oil and gas company focused on the acquisition and exploitation of unconventional liquids rich gas and oil reserves in the Fort Worth Basin. The company's strategy is to increase production and expand oil and gas reserves through unconventional recompletions and restimulations of existing conventional wells and the drilling of low risk, high rate-of-return gas and oil wells.
Sable and subsidiaries are collectively referred to herein as the "Company,” “we,” “us,” and “our.”

Results of Operations
Selected Data
 
 
Three Months Ended March 31,
 
 
2015
 
2014
Financial Results
 
 

 
 

Revenues - Land Lease
 
$
1,329

 
$
1,074

Revenues - Oil and Gas sales
 
259,821

 
48,133

Revenues - Sale of oil and gas interests
 
—

 
27,260

 
 
 
 
 
Total revenues
 
261,150

 
76,467

 
 
 
 
 
Total operating expenses
 
1,762,680

 
409,439

Total other expense
 
(565,825
)
 
(77,305
)
 
 
 
 
 
Loss before income taxes
 
(2,067,355
)
 
(410,277
)
Income tax benefit (provision)
 
—

 
—

 
 
 
 
 
Net loss
 
$
(2,067,355
)
 
$
(410,277
)
 
 
 
 
 
Operating Results
 
 

 
 

 
 
 
 
 
Consolidated Adjusted EBITDAX(1)
 
$
(1,007,702
)
 
$
(292,009
)
 
________________________________________________________

16

(1)See Results of Operations—Adjusted EBITDAX for a description of Adjusted EBITDAX, which is not a U.S. Generally Accepted Accounting Principles (“GAAP”) measure, and a reconciliation of Adjusted EBITDAX to net loss, which is presented in accordance with GAAP.
Three months ended March 31, 2015 compared to the three months ended March 31, 2014
Revenues.  Revenues increased $184,683 for the three months ended March 31, 2015, compared to the prior year period. This was primarily due to an increase in revenues from oil & gas sales of $211,688 as our production volumes increased following our acquisition of the Panther Creek properties on October 15, 2014. This increase was partially offset by a decrease in the sale of oil and gas interests of $27,260.  We anticipate revenues from land services and sale of oil and gas interests will decrease over time as we continue to focus on operating Panther Creek.  
Oil & gas lease operating expenses.  Lease operating expenses increased significantly by $493,419 for the three months ended March 31, 2015 compared to three months ended March 31, 2014.  This was due to increased field operations following the acquisition of Panther Creek properties.
Exploration.  Exploration costs for the three months ended March 31, 2015 has increased by $39,274 over the prior period due to the shift in focus towards retaining and developing properties. 
Depreciation, depletion, and amortization.  Depreciation, depletion, and amortization (“DD&A”) for the three months ended March 31, 2015, increased by $444,568 over the prior period due to the addition of the Panther Creek property.
Selling, general, and administrative expenses.  Selling, general, and administrative (“SG&A”) expenses increased $375,980 for the three months ended March 31, 2015 compared to the three months ended March 31, 2014.  This increase was due to an overall increase in professional fees and expenses including accounting and legal costs, and increases in payroll related costs due in part to an increase in personnel.  SG&A consists primarily of salary and wages, contract labor, professional fees, lease rental costs, and insurance costs. 
Interest expense.  Interest expense increased $448,629 for the three months ended March 31, 2015 compared to the prior year period primarily due to the addition of the 13% Secured Notes and the 12% convertible debentures.  Interest expense was $526,011 for the three months ended March 31, 2015 compared to $77,382 for the same period in the prior year.
Income tax benefit (provision).  The income tax benefit (provision) for the three months ended March 31, 2015 and 2014 of $0 and $0, respectively, is the result of utilizing existing and current net operating losses to offset taxable income generated by our oil and gas segment. 
Adjusted EBITDAX
To assess the continuing operating results of our business, our chief operating decision maker analyzes net income (loss) before income taxes, interest expense, DD&A, exploration, impairments, gains or losses resulting from the sale of assets or resolution of commercial disputes, changes in fair value attributable to derivative liabilities, and discontinued operations (“Adjusted EBITDAX”).  Our definition of Adjusted EBITDAX, which is not a GAAP measure, excludes interest expense to allow for assessment of segment operating results without regard to our financing methods or capital structure.  Similarly, DD&A, exploration and impairments are excluded from Adjusted EBITDAX as a measure of our operating performance because capital expenditures are evaluated at the time capital costs are incurred.  In addition, changes in fair value attributable to derivative liabilities and the accretion of preferred stock liability are excluded from Adjusted EBITDAX since these unrealized (gains) losses are not considered to be a measure of asset-operating performance. Management believes that the presentation of Adjusted EBITDAX provides information useful in assessing the Company’s financial condition and results of operations and that Adjusted EBITDAX is a widely accepted financial indicator of a company’s ability to incur and service debt, fund capital expenditures and make distributions to stockholders.
Adjusted EBITDAX, as we define it, may not be comparable to similarly titled measures used by other companies. Therefore, our consolidated Adjusted EBITDAX should be considered in conjunction with net income (loss) and other performance measures prepared in accordance with GAAP, such as operating income or cash flow from operating activities. Adjusted EBITDAX has important limitations as an analytical tool because it excludes certain items that affect net income (loss) and net cash provided by operating activities.  Adjusted EBITDAX should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP.  Below is a reconciliation of consolidated Adjusted EBITDAX to consolidated net income (loss) to common stockholders as reported on our consolidated statements of operations.

17

 
 
Three Months Ended March 31,
 
 
 
2015
 
2014
 
Reconciliation of Adjusted EBITDAX to GAAP Net Loss:
 
Net loss
 
$
(2,067,355
)
 
$
(410,277
)
 
 
 
 
 
 
 
Interest expense
 
526,011

 
77,382

 
DD&A
 
454,504

 
9,936

 
Exploration
 
39,274

 
30,950

 
Deferred financing cost amortization
 
283,440

 
—

 
Change in value of accrued working interest
 
(141,401
)
 
—

 
Change in fair value of derivative liabilities
 
(102,175
)
 
—

 
 
 
 
 
 
 
Consolidated Adjusted EBITDAX
 
$
(1,007,702
)
 
$
(292,009
)
 
Liquidity and Capital Resources
Our working capital needs have historically been satisfied through operations, equity and debt investments from private investors, loans with financial institutions, and through the sale of assets.  Historically, our primary use of cash has been to pay for acquisitions and investments, service our debt, and for general working capital requirements.  As of March 31, 2015, we have cash and cash equivalents totaling $426,427, and negative working capital of $(3,066,421).
We do not currently generate sufficient cash flow from operations, and so we are continuing to raise additional capital through equity and/or debt financings to support and expand our drilling activities until such time as we can fully implement our plan of future operations and generate sufficient cash flow.
Cash Flows
The following table summarizes our cash flows and has been derived from our unaudited financial statements for the three months ended March 31, 2015 and 2013.
 
 
Three Months Ended March 31,
 
 
2015
 
2014
Cash flow provided by (used in) operating activities
 
(803,172
)
 
(449,061
)
Cash flow provided by (used in) investing activities
 
(589,684
)
 
49,789

Cash flow provided by (used in) financing activities
 
1,613,284

 
408,557

 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
220,428

 
9,285

Beginning cash and cash equivalents
 
93,728

 
1,484,386

 
 
 
 
 
Ending cash and cash equivalents
 
$
314,156

 
$
1,493,671

 
Cash flows used in operating activities increased for the three months ended March 31, 2015 by $354,111 compared to cash flows from operating activities for the three months ended March 31, 2014. This increase was mainly due to increased LOE costs associated with the Panther Creek properties.
Cash flows used in investing activities for the three months ended March 31, 2015 increased by $639,473 compared to the three months ended March 31, 2014.  The change is primarily due to an $572,262 increase in cash outflows used in the investment in oil & gas properties.
Cash flows provided by financing activities increased by $1,204,727 for the three months ended March 31, 2015 compared to the three months ended March 31, 2014.  The increase was due primarily to the $1,675,000 provided by the issuance of 13% Secured Notes.  
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Critical Accounting Policies
Preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.  We believe the most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain.  Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2014, describe the significant accounting estimates and policies used in preparation of the Consolidated Financial Statements.  Actual results in these areas could differ from management’s estimates.  Other than the clarification to our revenue recognition policy described below, there have been no significant changes in our critical accounting estimates and policies during the three months ended March 31, 2015.
Revenue Recognition
Revenues from the sales of natural gas and crude oil are recorded when product delivery occurs and title and risk of loss pass to the customer, the price is fixed or determinable, and collection is reasonably assured. The Company uses the sales method of accounting for oil and gas revenues. Under this method, revenues are recognized based on the actual volumes of gas and oil sold to purchasers. The volume sold may differ from the volumes the Company may be entitled to, based on the Company's individual interest in the property. Periodically, imbalances between production and nomination volumes can occur for various reasons. In cases where imbalances have occurred, a production imbalance receivable or liability will be recorded when determined. If an imbalance exists at the time the wells’ reserves are depleted, settlements are made among the joint interest owners under a variety of arrangements.
Revenues from land services are recorded when title work is completed and the customer has been invoiced for services provided. Revenues from the sale of interests in oil and gas properties are recorded once a formal agreement has been reached and the agreement has been consummated through the exchange of consideration.
•
Land services revenue - Land services revenues consist of fees generated from analyzing land and mineral title reports, leasehold title analysis and reports, land title runsheets, sourcing, negotiating and acquiring leases, document

18

preparation and performing title curative functions. Such revenues had previously been reported as Other revenues on the consolidated statements of operations. Sable provides land services to its customers by identifying the landowners and performing various land services identified above. The buyer (Sable’s customer) pays the landowner directly for the undeveloped lease acreage. Sable does not take title to the leasehold acreage and the buyer’s purchase from the landowner is non-recourse. For its services, Sable receives fees directly from its customer for services provided for clearing title, etc., generally based on a per acre amount. There is no substantial performance obligation or a retained interest by Sable as we do not obtain an interest in the leasehold acreage (not a conveyance of interests).
•
Sale of oil and gas interests - As there is a very competitive market to purchase oil and gas lease interests, especially in newer oil and gas plays with increasing acreage costs, Sable may purchase undeveloped leasehold acreage from landowners and take title to the leasehold. However, holding the leasehold acreage is generally short term in nature (less than 90 days) as we only acquire the undeveloped property when an identified customer has already agreed to the 100% re-purchase of the leasehold acreage from Sable. Accordingly, we do not acquire the leasehold acreage on a speculative basis nor for our own development. There is no substantial performance obligation or retained interest by Sable as all land services have been performed and Sable sells 100% of the leasehold interest. The difference between the sale price and the amount (cost) paid for the lease by Sable is recognized as a gain on sale in accordance with ASC 932-360-55-8. Such gains are not deemed to be incidental or peripheral transactions as providing land services and facilitating the purchase of oil and gas leasehold interest for its customers are transactions that are part of Sable’s principal ongoing operations, thus reported within the Company’s revenues.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
The information is not required under Regulation S-K for “smaller reporting companies.”
Item 4.  Controls and Procedures

Disclosure Controls and Procedures

Our management performed an evaluation of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and to ensure that the information required to be disclosed by us in reports that we file under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, management has concluded that the Company’s disclosure controls and procedures are not effective as of March 31, 2015.
Changes in Internal Control Over Financial Reporting
No changes in our internal control over financial reporting were made during the three months ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



19

PART II 
Item 1.  Legal Proceedings
At March 31, 2015, the Company was a party to lawsuits that were incurred in the normal course of business, none of which individually or in the aggregate is considered material by management in relation to the Company’s financial position or results of operations.  In management’s opinion, the Company’s consolidated financial statements would not be materially affected by the outcome of these legal proceedings, commitments, or asserted claims.
Item 1A.  Risk Factors
There have been no material changes in the Company’s risk factors from those disclosed in Part I, Item 1A, Risk Factors, in the Company’s Form 10-K for the year ended December 31, 2014.
Item 2.         Unregistered Sales of Equity Securities and Use of Proceeds
13% Secured Notes

On October 15, 2014, the Company completed the acquisition of 19,881 acres held by production in the Fort Worth Basin at a purchase price of $9,500,000 from Upham Oil & Gas Co., L.P. of Mineral Wells, Texas. The acquisition was financed primarily by issuance of Secured Notes of $8,900,000; bearing interest at the rate of 13% per annum with a maturity in three years. In addition, each Secured Lender will receive (i) a pro rata share of a 3.0% overriding royalty interest effective at closing, (ii) on the date that the principal and interest on the Secured Notes is paid in full a record assignment of such Secured Lender's pro rata share of a 33.33% working interest.

Payment terms on the 13% Secured Notes are as follows: Interest only on each Note shall be due and payable quarterly in arrears commencing on January 15, 2015, and continuing on the fifteenth (15) day of each April, July, October, and January thereafter through April 15, 2016. Commencing on July 15, 2016, and continuing on the fifteenth (15) day of each October, January, April and July thereafter, principal and interest shall be due and payable quarterly based upon a fifteen (15) year amortization schedule. The unpaid principal balance, and all accrued and unpaid interest, shall be due and payable on the Maturity Date, October 15, 2017.
RKJ Holdings, LLC is one of the Lenders under the Loan Agreement as of October 14, 2014. RKJ Holdings, LLC is owned and managed by Mr. Cory R. Hall, the President and Chief Operating Officer of Sable and a member of the Sable Board of Directors. As a Lender, RKJ Holdings loaned Sable $2,850,000 at closing and an additional $150,000 during the three months ended March 31, 2015.
As of March 31, 2015 we had raised $11,325,000 under the 13% Secured Notes offering including warrants to purchase up to 6,228,750 shares of the Company's common stock.
The proceeds were used to acquire the Panther Creek property, begin remedial and recompletion operations along with general corporate overhead.

Item 3.         Defaults Upon Senior Securities
None
Item 4.         Mine Safety Disclosures
None
Item 5.         Other Information
None 
Item 6.         Exhibits
The exhibits set forth on the accompanying Exhibit Index have been filed as part of this Form 10-Q.

20

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, thereunto duly authorized.
 
Sable Natural Resources Corporation
 
 
 
 
By:
/s/ Michael K. Galvis
 
 
Michael K. Galvis
 
 
Chief Executive Officer
 
 
May 22, 2015
 

21

EXHIBIT INDEX
 
Exhibit
 
Document
 
 
 
2.1
 
Agreement and Plan of Merger, dated as of May 4, 2012, by and among FDF Resources Holdings LLC, New Francis Oaks, LLC and NYTEX FDF Acquisition, Inc. (filed as Exhibit 2.1 to the Registrant’s Form 8-K filed May 10, 2012 and incorporated herein by reference)
 
 
 
3.1
 
Certificate of Incorporation of the Registrant, as amended (filed as Exhibit 3.1 to the Registrant’s Form 10-12G/A filed August 12, 2010 and incorporated herein by reference)
 
 
 
3.2
 
Bylaws of Registrant, as amended (filed as Exhibit 3.2 to the Registrant’s Form 10-12G/A filed August 12, 2010 and incorporated herein by reference)
 
 
 
4.1
 
Amended and Restated Certificate of Designation in respect of Senior Series A Redeemable Preferred Stock (filed as Exhibit 10.9 to the Registrant’s Form 8-K filed November 30, 2010 and incorporated herein by reference)
 
 
 
4.2
 
Amended and Restated Certificate of Designation in respect of Senior Series B Redeemable Preferred Stock (filed as Exhibit 10.10 to the Registrant’s Form 8-K filed November 30, 2010 and incorporated herein by reference)
 
 
 
4.3
 
Amended and Restated Certificate of Designation in respect of Series A convertible Preferred Stock (filed as Exhibit 4.3 to the Registrant’s Form 10-Q filed November 6, 2012 and incorporated herein by reference)
 
 
 
4.4
 
Amended and Restated Certificate of Designation in respect of Senior Series A Redeemable Preferred Stock (filed as Exhibit 10.9 to the Registrant’s Form 8-K filed November 30, 2010 and incorporated herein by reference)
 
 
 
4.5
 
Amended and Restated Certificate of Designation in respect of Senior Series B Redeemable Preferred Stock (filed as Exhibit 10.10 to the Registrant’s Form 8-K filed November 30, 2010 and incorporated herein by reference)
 
 
 
4.6
 
NYTEX Energy Holdings, Inc. 2013 Equity Incentive Plan (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 28, 2013 and incorporated herein by reference)
 
 
 
4.7
 
NYTEX Energy Holdings, Inc. Amendment No. 1 to 2013 Equity Incentive Plan (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with on February 7, 2013 and incorporated herein by reference)
 
 
 
10.1
 
Employment Agreement - Galvis (filed as Exhibit 10.1 to the Registrant's Form 10-K filed August 14, 2014 and incorporated herein by reference.
 
 
 
10.2
 
Employment Agreement - Hall (filed as Exhibit 10.2 to the Registrant's Form 10-K filed August 14, 2014 and incorporated herein by reference.
 
 
 
10.3
 
NYTEX Energy Holdings, Inc. 2014 12% Convertible Debenture (filed as Exhibit 10.3 to the Registrant's Form 10-K filed August 14, 2014 and incorporated herein by reference.
 
 
 
10.4
 
NYTEX Energy Holdings, Inc. 2014 Debenture Warrant (filed as Exhibit 10.4 to the Registrant's Form 10-K filed August 14, 2014 and incorporated herein by reference.
 
 
 

22

10.5
 
Securities Purchase Agreement - Hall (filed as Exhibit 10.5 to the Registrant's Form 10-K filed August 14, 2014 and incorporated herein by reference.
 
 
 
10.6
 
Form of Loan Agreement - 13% Secured Note (filed as Exhibit 10.1 to the Registrant's Form 8-K filed October 20, 2014 and incorporated herein by reference)
 
 
 
21
 
List of Subsidiaries of Registrant (filed as Exhibit 21 to the Registrant's Form 10-K filed March 31, 2015 and incorporated herein by reference)
 
 
 
23.1
 
Consent of Whitley Penn LLP (filed as Exhibit 23.1 to the Registrant's Form 10-K filed March 31, 2015 and incorporated herein by reference)
 
 
 
31.1*
 
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
 
31.2*
 
Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 
 
32.1*
 
Certifications of Chief Executive Officer and Chief Accounting Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002***
 
 
 
101.INS**
 
XBRL Instance Document.
 
 
 
101.SCH**
 
XBRL Taxonomy Extension Schema.
 
 
 
101.CAL**
 
XBRL Taxonomy Extension Calculation Linkbase.
 
 
 
101.DEF**
 
XBRL Taxonomy Extension Definition Linkbase.
 
 
 
101.LAB**
 
XBRL Taxonomy Extension Label Linkbase.
 
 
 
101.PRE**
 
XBRL Taxonomy Extension Presentation Linkbase.
________________________________________________________
*                 Filed herewith
**          Furnished herewith


23