n413152nt10q.htm

PART III - NARRATIVE

State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR or the transition report or portion thereof could not be filed within the prescribed time period.

Introductory Note: Please see the information under the caption “Cautionary Statements” below which sets forth important disclosure regarding forward-looking statements contained in this Form.

The Registrant is unable to file its Quarterly Report on Form 10-Q for the period ended February 28, 2015 (“Form 10-Q”) within the prescribed time period without unreasonable effort and expense given a significant acquisition that it completed on February 3, 2015. As disclosed in a Form 8-K filed on February 9, 2015, pursuant to a Share Purchase Agreement (“Share Purchase Agreement”) with Sefton Resources, Inc. (“Sefton”) the Registrant purchased 100% of the issued and outstanding shares of capital stock of Sefton’s wholly-owned subsidiary, TEG Oil & Gas U.S.A., Inc. (“TEG”). Under the terms of the Share Purchase Agreement, the purchase price for the shares of TEG is $1.00 in cash plus the issuance of 3,000,000 shares of the Registrant’s common stock and a five-year warrant (“Warrant”) to purchase up to an additional 5,000,000 shares of the Registrant’s common stock for $0.25 per share.

Between April 18, 2014 and January 31, 2015, the Registrant and its wholly-owned subsidiary, Tapia Holdings, LLC (“THLLC”), made a number of advances to TEG, pursuant to a secured subordinated loan receivable agreement, as amended. These advances totaled approximately $1,663,227, as of February 3, 2015, including accrued interest receivable. This amount constitutes additional consideration for the TEG acquisition, as this loan receivable was not settled prior to the closing of the Registrant’s acquisition of TEG.

Subsequent to closing (as disclosed in a Form 8-K filed on March 24, 2015), on March 18, 2015, the Registrant entered into a Sixth Amendment to Forbearance Agreement (“Sixth Amendment”) among Sefton and one of its subsidiaries, TEG, the Registrant and Bank of the West (“BOTW”). Under the Sixth Amendment, BOTW has agreed to release Sefton and its subsidiary from all of their respective obligations under the credit agreement (other than any surviving obligations in respect of indemnification) and to remove Sefton and its subsidiary as borrowers (ie. guarantors) under the credit Agreement, subject to (i) BOTW’s receipt of $400,000 in good funds by no later than March 23, 2015, to be applied against the amount outstanding under the Loan, (ii) delivery to BOTW of a collateral assignment of note, executed by Sefton in favor of BOTW and acknowledged and agreed to by the Registrant (“Collateral Assignment”), collaterally assigning to BOTW, to secure all obligations of borrowers under the Credit Agreement, a promissory note, dated March 18, 2015 in the principal amount of $400,000, issued by the Registrant in favor of Sefton (the “Hawker Note”), and (iii) delivery to BOTW of the original Hawker Note. The $400,000 in good funds was timely paid to BOTW and the collateral assignment and the Hawker Note have been delivered to BOTW. In addition, under the terms of the Sixth Amendment, Sefton has agreed to return to the Registrant for cancellation (a) the Warrant, and (b) 1,500,000 shares of the Registrant’s common stock.

Also on March 18, 2015, in connection with transactions contemplated by the Sixth Amendment, the Registrant issued the Hawker Note. The Hawker Note bears simple interest at the rate of 6% per annum and is due on the earlier to occur of (i) March 18, 2018, or (ii) expiration of certain of BOTW’s covenants to forbear in exercising its rights under the credit agreement. Upon payment in full of the loan obligations to BOTW, the Hawker Note will be returned to the Registrant for cancellation.

The Registrant expects to file the Form 10-Q as soon as reasonably practicable, and at this time the Registrant anticipates that it will be able to do so within the extension period of five calendar days provided under Rule 12b-25 of the Securities Exchange Act of 1934, as amended.

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PART IV - OTHER INFORMATION

(1) Name and telephone number of person to contact in regard to this notification:

Darren Katic		(310)		438-7997
(Name)		(Area Code)		(Telephone Number)

(2) Have all other periodic reports required under Section 13 or 15(d) of the Securities Exchange Act of 1934 or Section 30 of the Investment Company Act of 1940 during the preceding 12 months or for such shorter period that the registrant was required to file such report(s) been filed? If answer is no, identify report(s

S Yes £ No

(3) Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof?

S Yes £ No

If so: attach an explanation of the anticipated change, both narratively and quantitatively, and, if appropriate, state the reasons why a reasonable estimate of the results cannot be made.

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Preliminary Results of Operations

The following results of operations are preliminary. The Registrant’s final results of operations could be materially different from the preliminary results of operations set forth below.

The Registrant anticipates that the Form 10-Q will report the following in respect of any significant change in results of operations:

Revenue will include the results of TEG beginning February 3, 2015, the date of closing. This will amount to approximately $73,000. Net loss for TEG for this period and for the Registrant on a consolidated basis for the three and six months ended February 28, 2015 has not yet been finalized.

Included in net loss attributable to the Registrant is a non-cash equity compensation expense of $0.7 million and $1.8 million for the three and six months ended February 28, 2015, respectively, compared to no such expense in the comparable prior year fiscal periods. These amounts include $0.7 million and $1.7 million, respectively, for stock issued to the “HERLLC Sellers” as described below. In addition, we incurred professional fees of $0.2 million and $0.6 million, respectively, largely for pursuing the TEG acquisition and for the litigation described in our Form 10-K for the year ended August 31, 2014 as filed with the SEC on November 24, 2014.

As previously disclosed in our Form 10-K for the year ended August 31, 2014, on October 10, 2014, the Registrant authorized an amendment (the “Amendment”) to the Amended and Restated Option Agreement (“Option Agreement”) dated November 20, 2013. Under the original terms of the Option Agreement, Messrs. Darren Katic and Charles Moore (the “HERLLC Sellers”) were entitled to, in the aggregate, up to 33,000,000 additional shares of Registrant common stock upon the consummation of certain potential follow-on transactions. The Amendment waived all of the follow-on transaction requirements and authorized the immediate issuance to Messrs. Katic and Moore of the full 33,000,000 shares (16,500,000 each). Of those shares, the Registrant initially held 19,000,000 shares in escrow, to be released as follows: (i) 10,000,000 shares upon completion of the acquisition of the assets of TEG Oil & Gas, Inc. (located in the Tapia Field, Los Angeles County, California)(which amount was released from escrow in February 2015), and (ii) 9,000,000 shares upon completion, on or before December 31, 2017, of any one of the transactions evaluated by Hawker Energy (Rincon), LLC (“HERLLC”), our wholly-owned subsidiary, prior to its reorganization with the Registrant, including a transaction resulting in Registrant ownership of oil and gas lease interests in any one of the following unique oil fields:

(a)

Cat Canyon (leases Tognazzini, Wickenden, Los Alamos, GWP, and those immediately adjacent to, in each case, in Santa Barbara County);

(b)

Santa Maria (T 11N, R 36W extending southeast through T9N R33W in Santa Barbara County);

(c)

Casmalia (leases Tompkins, Peshine, and those immediately adjacent to, in each case, in Santa Barbara County);

(d)

North Lost Hills (Sections 12 & 13, T25S, R19E, and Sections 7 & 18, T25S, R 20E, totaling 1,500 acres in Kern County CA);

(e)

Maricopa (McFarland and Jameson leases totaling 40 acres in Kern County);

(f)

Pine Meadows (Section 1 Township 31 South Range 22E in Kern County); or

(g)

Torrance (Joughin and South Torrance Units totaling 900 acres in Los Angeles County).

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During the three months ended November 30, 2014, with respect to 14,000,000 shares of Registrant common stock that were issued as a result of the Amendment, an equity compensation expense of $1.0 million was recorded based on the fair value of the shares at the date of issuance. With respect to the 19,000,000 shares of Registrant common stock that are in escrow, an equity compensation expense of $19,000 was recorded in the three months ended November 30, 2104 based on the par value of the shares at the date of issuance. Total expense was for the three months ended November 30, 2014, was $1.0 million. During the three months ended February 28, 2015, an additional expense of $0.7 million was recorded when 10,000,000 shares were released from escrow to the HERLLC Sellers following the closing of the TEG acquisition. Total expense for the six months ended February 28, 2015, was $1.7 million. As and when subsequently released from escrow, a further expense will be recorded based on the fair value of the 9,000,000 shares (less amounts previously expensed based on par value) concurrently with consummation of the applicable follow-on transaction. All of these amounts are not considered for accounting purposes to be incremental consideration for our acquisition of HERLLC.

Cautionary Statements

This Form 12B-25 includes forwarding looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding Hawker Energy, Inc. and its business that are not historical facts. All statements in this Form 12B-25 that address activities, events, results or developments that the Registrant expects, believes or anticipates, will or may occur in the future are forward-looking statements. Forward-looking statements can be identified by such forward-looking terminology as “expects,” “anticipates,” “believes,” “seeks,” “estimates,” and words or phrases of similar import. With the exception of historical information, the matters discussed in this notification, including without limitation, the timing of the preparation and filing of the Registrant’s quarterly report, is a forward-looking statement. Forward-looking statements are subject to many risks and uncertainties that could cause the Registrant’s actual results to differ materially from any future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, other events that may require the attention of the Registrant’s management and other events, factors and risks previously and from time to time disclosed in the Registrant’s filings with the Securities and Exchange Commission, including, specifically, those factors set forth in the "Risk Factors" section of the Registrant’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. The Registrant undertakes no obligation to update, and does not have a policy of updating or revising, the forward-looking statements in this report.

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Hawker Energy, Inc.

(Name of Registrant as Specified in Charter)

has caused this notification to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	April 14, 2015		By:	/s/ Darren Katic
				Darren Katic Chief Executive Officer

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