0000910662-18-000032.txt : 20180823 0000910662-18-000032.hdr.sgml : 20180823 20180823151008 ACCESSION NUMBER: 0000910662-18-000032 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20180823 DATE AS OF CHANGE: 20180823 GROUP MEMBERS: NATALE REA (2013) FAMILY TRUST SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FIELDPOINT PETROLEUM CORP CENTRAL INDEX KEY: 0000316736 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 840811034 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-59277 FILM NUMBER: 181034665 BUSINESS ADDRESS: STREET 1: 609 CASTLE ROAD STREET 2: SUITE 335 CITY: AUSTIN STATE: TX ZIP: 78746 BUSINESS PHONE: 5122508692 MAIL ADDRESS: STREET 1: 609 CASTLE ROAD STREET 2: SUITE 335 CITY: AUSTIN STATE: TX ZIP: 78746 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: 2390530 Ontario Inc. CENTRAL INDEX KEY: 0001673729 IRS NUMBER: 000000000 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 9200 WESTON ROAD STREET 2: PIAZZA VILLAGIO, P.O. BOX 92030 CITY: VAUGHAN STATE: A6 ZIP: L4H 3J3 BUSINESS PHONE: 905 833 2265 MAIL ADDRESS: STREET 1: 9200 WESTON ROAD STREET 2: PIAZZA VILLAGIO, P.O. BOX 92030 CITY: VAUGHAN STATE: A6 ZIP: L4H 3J3 SC 13D/A 1 amendment5.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
 
 
FieldPoint Petroleum Corporation
(Name of Issuer)
 
 Common Stock, $.01 Par Value
(Title of Class of Securities)
 
 316570100
(CUSIP Number)
 
2390530 Ontario Inc
Natale Rea (2013) Trust
c/o Derrick Divetta
9200 Weston Rd.
Piazza Villagio
P.O. Box 92030
Vaughan, Ontario
L4H 3J3
Canada
(905) 833-2265 
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
 
 August 16, 2018
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ☐.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
1
CUSIP No. 316570100
 
1
NAMES OF REPORTING PERSONS
 
 
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
 
 
2390530 Ontario Inc.
 
 
 
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
☐
 
(b)
☒
 
 
3
SEC USE ONLY
 
 
 
 
 
 
 
4
SOURCE OF FUNDS (SEE INSTRUCTIONS)
 
 
AF
 
 
 
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)
 
☐
 
 
 
 
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
 
Canada
 
 
 
 
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
 
0
 
 
 
 
8
SHARED VOTING POWER
 
 
744,212 (see Item 5)
 
 
 
 
9
SOLE DISPOSITIVE POWER
 
 
0
 
 
 
 
10
SHARED DISPOSITIVE POWER
 
 
744,212 (see Item 5)
 
 
 
 
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
 
744,212 (see Item 5)
 
 
 
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
 
☐
 
 
 
 
 
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
 
6.98%
 
 
 
 
14
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
 
 
CO
 
 
 
 
2
CUSIP N0.  316570100
 
1
NAMES OF REPORTING PERSONS
 
 
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
 
 
Natale Rea (2013) Family Trust
 
 
 
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
☐
 
(b)
☒
 
 
3
SEC USE ONLY
 
 
 
 
 
 
 
4
SOURCE OF FUNDS (SEE INSTRUCTIONS)
 
 
AF
 
 
 
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)
 
☐
 
 
 
 
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
 
Canada
 
 
 
 
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
 
0
 
 
 
 
8
SHARED VOTING POWER
 
 
744,212 (see Item 5)
 
 
 
 
9
SOLE DISPOSITIVE POWER
 
 
0
 
 
 
 
10
SHARED DISPOSITIVE POWER
 
 
744,212 (see Item 5)
 
 
 
 
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
 
744,212 (see Item 5)
 
 
 
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
 
☐
 
 
 
 
 
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
 
6.98%
 
 
 
 
14
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
 
 
OO
 
 
 
 
 
 
 
 
 
3
 
Item 1.  Security and Issuer.

This Amendment No. 5 ("Amendment No. 5") amends the statement on Schedule 13D previously filed on August 21, 2015 (the "Original Schedule 13D"), Amendment No. 1 filed on September 24, 2015 ("Amendment No. 1"), Amendment No. 2 filed on October 13, 2015 ("Amendment No. 2"), Amendment No. 3 filed on May 4, 2016 ("Amendment No. 3") and Amendment No. 4 filed on April 20, 2018 ("Amendment No. 4")  and, together with the Original Schedule 13D, Amendment No. 1, Amendment no. 2, Amendment No. 3, Amendment No. 4  and this Amendment No. 5, (the "Schedule 13D"). The Schedule 13D relates to the shares of Common Stock of FieldPoint Petroleum Corporation (the "Issuer"). Unless the context otherwise requires, references herein to the "Common Stock" are to such Common Stock of the Issuer. Unless otherwise indicated, all capitalized terms used herein but not defined herein shall have the same meanings as set forth in the Schedule 13D. 
 

Item 4.  Purpose of Transaction.

Item 4 of the Schedule 13D is hereby amended and supplemented by adding the following information:

On August 16, 2018, the Reporting Persons sent a second letter to the Issuer's Board of Directors.

In the letter, the Reporting Persons stated they have been actively engaged with the Issuer's management to discuss strategic alternatives to improve the Issuer's financial and operational position.  The Reporting Persons proposed that the Issuer would structue a capital raise as an underwritten rights issue, with the proceeds being used for debt repayment.  All of the Issuer's shareholders would have the option to acquire new shares through a rights issue, while a reduction in outstanding debt would give the Issuer more flexibility under the credit facility to pursue transactions that create value for shareholders.

Accordingly, the Reporting Persons stated that they had asked their representatives to contact the Board members to arrange a time and place to meet to discuss a proposal for an underwritten rights issue.


The foregoing summary is qualified in its entirety by the full text of the letter, which is filed as Exhibit 99.1  to the Schedule 13D and is incorporated herein by reference.


Item 5.  Interest in Securities of the Issuer.
 
Item 5(a) of the Schedule 13D is hereby amended and restated in its entirety as follows:
 
(a) As of the date of this Schedule 13D, the Reporting Persons beneficially own 744,212  shares of Common Stock, all of which are directly held by 2390530 (the "Shares"). The Shares represent approximately 6.98% of the Common Stock outstanding. Percentages of the Common Stock outstanding reported in this Schedule 13D are calculated based upon the 10,669,229 shares of Common Stock outstanding as of August 10, 2018, as reported in the Issuer's Quarterly Report on Form 10-Q filed by the Issuer with the Securities and Exchange Commission on August 14, 2018.
 
 
 
4

 
Item 6.  Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Except as described above in Item 4, none of the Reporting Persons has any contracts, arrangements, understandings
or relationships with respect to the securities of the Issuer.
 
 
Item 7.  Material to Be Filed as Exhibits.
 
Item 7 of the Schedule 13D is hereby amended and supplemented as follows:

Exhibit 99.1: Letter to the Board of Directors
 

5
SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 
 
Dated: August 23, 2018
2390530 Ontario Inc.
 
 
 
 
 
 
 
By:
 
/s/ Natale Rea
 
 
Name: Natale Rea
 
 
Title: President
 
 
 
 
 
 
 
 
 
Dated: August 23, 2018
Natale Rea (2013) Family Trust
 
 
 
 
By:
 
/s/ Natale Rea
 
 
Name: Natale Rea
 
 
Title: President
 
 
 
 
 
 
 
6
 EX-99.1 2 ex99_1.htm LETTER TO BOARD

2390530 Ontario Inc.
Natale Rea (2013) Trust
9200 Weston Road
PO Box 92030
Vaughan, ON L4H 3J3
Canada

Board of Directors
Fieldpoint Petroleum Corporation
609 Castle Ridge Road
Suite 335
Austin, TX 78746

August [16], 2018

Dear Board of Directors,

We are writing to you today as material shareholders of Fieldpoint Petroleum Corp. ("FPPP" or the "Company") to express our continued extreme disappointment with the current financial position and stock price of the Company.

As you are aware, on April 20, 2018, we sent you a letter (the "First Letter") expressing our deep concern about the Company's continuing poor performance, the delisting from the NYSE and the resulting decline in the Company's stock price, which have resulted in a dramatic loss of shareholder value over the past several years.  We filed the First Letter as an exhibit to our Amendment No.4 to our statement on Schedule 13D.  Our concern is now a matter of public record and we were completely open and transparent in our desire to engage in a constructive dialogue with the Company's Board of Directors to resolve the various problems and to mediate our deep concern.

In the First Letter, we mentioned that the Company's financial position continues to deteriorate despite improving crude oil prices.  To reiterate, in the two years since the oil price bottom in February 2016, the price of West Texas Intermediate crude oil has recovered 250% to $65 per barrel.  Over the same period, however, the Company's cash balance has fallen to less than $400K1, Debt/EBITDA has increased to 54x2 and the stock price has fallen 60% to $0.20 per share.  The Company has also been out of compliance with the terms of its credit facility with Citigroup since October 2016 and has required multiple forbearances to prevent a default.

The Company's primary action in response to the deteriorating financial situation has been to sell assets and use the proceeds to repay debt.  Although this tactic may have bought time with the bank, it also resulted in de-listing of the Company's stock from the NYSE, materially reducing shareholder liquidity.  It has also not solved the Company's underlying financial and business problems.


1 Source: FPPP Q2 2018 10Q
2 As of 6/30/18
1

Our greatest concern, however, is the fact that the Company's asset base has now shrunk to the point that operating cash flow is not sufficient to meet working capital, G&A and interest payments3, let alone pay off the outstanding debt balance or even finance internal growth.

We believe that if the Company does not make a material change in its strategy and direction, there is a very real risk of bankruptcy or even insolvency.  It is the Board's fiduciary duty to prevent a bankruptcy or insolvency event.

Since our First Letter, we actively engaged with the Company's management to discuss strategic alternatives to improve the Company's financial and operational position, as we do not believe that continued piecemeal asset sales will solve the fundamental business issue of how to create shareholder value.  These strategic alternatives included raising new capital through issuing stock to the Rea Trust, as well as selling assets to Trivista Operating, LLC.  Unfortunately, the discussions were not successful and a different approach is now clearly necessary.

There appear to be two major obstacles to any transaction.  First, negotiating the price at which new shares would be issued to a single shareholder.  Second, structuring an asset sale that does not breach the covenants of the Citigroup credit facility, or cause a deterioration in the Company's compliance with those covenants.

Both of these problems would be solved, however, by structuring a capital raise as an underwritten rights issue, with the proceeds being used for debt repayment.  All FPPP shareholders would have the option to acquire new shares through a rights issue, while a reduction in outstanding debt would give the Company more flexibility under the credit facility to pursue transactions that created value for shareholders.

Accordingly, we have asked our representatives to contact each of you to arrange a time and place to meet to discuss a proposal for an underwritten rights issue.  At a very high level, the terms we would like to propose are summarized on Attachment 1 to this letter.

In the absence of any credible alternative proposals and with increasing risk of a bankruptcy or insolvency, we are no longer willing to accept the status quo.  Any further time and money spent by the Company pursuing and analyzing less advantageous options than the one we present here is an irresponsible waste of corporate assets and must conclude.  We trust that the best interests of the shareholders continues to be of the utmost significance to the members of the Board, and look forward to your prompt response. If there are any credible alternative proposals from the Board that address the Company's fundamental business problems, they must be presented to us right now.


3 Per the Company's Q2 2018 10Q, operating cash flow (i.e., Total Revenue less Production Expense, G&A and changes in Working Capital) for the 6 months through 6/30/18 was minus $39,579.  Interest Expense was $72,459, i.e. the Company's cashflow after Interest Expense was minus $112,218.
2

Please ensure that all members of the Board receive this letter. Depending on the Company's response, we may be filing in the future amendments to our Schedule 13D which may include this letter, as required by the applicable SEC rules.


Yours sincerely,

/s/Natale Rea
3

Attachment  1 – Summary Proposed Rights Issue Terms


1.  
Amount - $
$1.25 MM
2.  
Amount - Shares
10 MM
3.  
Share Price
$0.125
4.  
Use of Proceeds
Repayment of Debt
5.  
Shareholder Participation %
FPPP equity ownership % as of [9/30/18]
6.  
Unsubscribed Shares
Unsubscribed shares will be re-offered to subscribing shareholders pro rata to their FPPP equity ownership % post the initial rights issue offering
7.  
Residual Unsubscribed Shares
Residual unsubscribed shares will be purchased by the Rights Issue Underwriter
8.  
Rights Issue Underwriter
[Rea Trust]

4