HOUSTON, July 22, 2016 /PRNewswire/ -- Lucas Energy,
Inc. (NYSE MKT: LEI) ("Lucas" or
the "Company"), an independent oil and gas company with its
operations in central Texas, today
announced that, as previously disclosed in its Annual Report on
Form 10-K for the year ended March 31,
2016, which was filed with the Securities Exchange
Commission on July 13, 2016, the
audited financial statements of the Company contained an audit
opinion from the Company's independent registered public accounting
firm, GBH CPAs, PC, which included a going concern
qualification.
This announcement is made pursuant to the NYSE MKT Company Guide
(the "Company Guide") Sections 401(h) and 610(b), which requires
separate disclosure of receipt of an audit opinion containing a
going concern qualification. For further details, please
refer to Note 2 of the audited financial statements included in
"Part II" – "Item 8. Financial Statements and Supplementary Data"
of the Form 10-K filing.
Additionally, on July 21, 2016,
Lucas was notified by the NYSE MKT
(the "Exchange") that the Company is not in compliance with certain
of the Exchange's continued listing standards as set forth in Part
10 of the NYSE MKT Company Guide (the "Company Guide").
Specifically, Lucas is not in
compliance with Sections 1003(a)(ii) and (iii) of the Company Guide
in that it reported stockholders' equity of $2.4 million as of March
31, 2016 and net losses in its five most recent fiscal years
then ended, meaning that it did not have stockholders' equity over
(a) $4 million (required if an
Exchange-listed company has had losses from continuing operations
and/or net losses in three of its last four fiscal years, as the
Company did) or (b) over $6 million
(required if an Exchange listed company has had losses from
continuing operations and/or net losses in its five most recent
fiscal years, as the Company did).
In order to maintain its listing on the Exchange, the Exchange
has requested that the Company submit a plan of compliance (the
"Plan") by August 21, 2016,
addressing how it intends to regain compliance with Sections
1003(a)(ii) and (iii) of the Company Guide by January 21, 2018. The Company intends to submit a
Plan in the prescribed form to the Exchange by the required due
date, specifying activities that the Company plans to complete in
the near future to address the concerns of the Exchange and regain
compliance with the Exchange's continued listing standards.
Receipt of the letter does not have any immediate effect on the
listing of the Company's shares on the Exchange, except that until
the Company regains compliance with the Exchange's listing
standards, a "BC" indicator will be affixed to the Company's
trading symbol. The Company's business operations, SEC reporting
requirements and debt instruments are unaffected by the
notification, provided that if the Plan is not acceptable, or the
Company does not make sufficient progress under the Plan or
reestablish compliance by January 28,
2018, then the Company will be subject to the Exchange's
delisting procedures. The Company may then appeal a staff
determination to initiate such proceedings in accordance with the
Exchange's Company Guide.
The Company has been operating under a going concern opinion
since December 31, 2014, which
corresponded with the collapse in crude oil prices that began in
June 2014. Lucas anticipates that by the end of its
second quarter of fiscal 2017, it will close its pending
acquisition of assets from various sellers, and in consideration
for the acquisition, the Company will issue approximately 13
million shares of common stock, in addition to preferred stock, and
also undertake various preferred stock and debt transactions. These
financings and transactions are expected to return the Company to
compliance with the requirements of Sections 1003(a)(ii) and (iii)
of the Company Guide. Additionally, the oil and gas reserves
planned to be acquired are currently producing approximately 1,000
barrels of oil equivalent per day from 25 wells, which, together
with the transactions above, should generate sufficient revenues
and cash flows to mitigate the doubt about our ability to continue
as a going concern.
About Lucas Energy, Inc.
Based in Houston, Texas, Lucas
Energy (NYSE MKT: LEI) is a growth-oriented, independent oil and
gas company engaged in the development of crude oil and natural gas
in the Austin Chalk and Eagle Ford formations in South Texas.
For more information, please visit the updated Lucas Energy web
site at www.lucasenergy.com.
Safe Harbor Statement and Disclaimer
This news release includes "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 give our current expectations,
opinions, beliefs or forecasts of future events and performance. A
statement identified by the use of forward looking words including
"may," "expects," "projects," "anticipates," "plans," "believes,"
"estimate," "should," and certain of the other foregoing statements
may be deemed forward-looking statements. Although Lucas believes that the expectations reflected
in such forward-looking statements are reasonable, these statements
involve risks and uncertainties that may cause actual future
activities and results to be materially different from those
suggested or described in this news release. These include risks
inherent in natural gas and oil drilling and production activities,
including risks of fire, explosion, blowouts, pipe failure, casing
collapse, unusual or unexpected formation pressures, environmental
hazards, and other operating and production risks, which may
temporarily or permanently reduce production or cause initial
production or test results to not be indicative of future well
performance or delay the timing of sales or completion of drilling
operations; delays in receipt of drilling permits; risks with
respect to natural gas and oil prices, a material decline which
could cause Lucas to delay or
suspend planned drilling operations or reduce production levels;
risks relating to the availability of capital to fund drilling
operations that can be adversely affected by adverse drilling
results, production declines and declines in natural gas and oil
prices; risks relating to unexpected adverse developments in the
status of properties; risks relating to the absence or delay in
receipt of government approvals or fourth party consents; and other
risks described in Lucas's Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and other
filings with the SEC, available at the SEC's website at
www.sec.gov. Investors are cautioned that any forward-looking
statements are not guarantees of future performance and actual
results or developments may differ materially from those projected.
The forward-looking statements in this press release are made as of
the date hereof. The Company takes no obligation to update or
correct its own forward-looking statements, except as required by
law, or those prepared by third parties that are not paid for by
the Company. The Company's SEC filings are available at
http://www.sec.gov.
Contacts: Carol Coale /
Ken Dennard
Dennard ▪ Lascar Associates LLC
(713) 529-6600
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SOURCE Lucas Energy, Inc.