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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 September 30, 2020

or

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number: 001-31899

Graphic

WHITING PETROLEUM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

    

20-0098515

(State or other jurisdiction
of incorporation or organization)

(I.R.S. Employer
Identification No.)

1700 Lincoln Street, Suite 4700
Denver, Colorado

80203-4547

(Address of principal executive offices)

(Zip code)

(303) 837-1661

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.001 par value

WLL

New York Stock Exchange

(Title of each class)

(Trading symbol)

(Name of each exchange on which registered)

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      No  

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted 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 such files).   Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Smaller reporting company

Accelerated filer

Emerging growth company

Non-accelerated filer

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes      No  

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Yes      No  

Number of shares of the registrant’s common stock outstanding at October 30, 2020: 38,051,210 shares.

TABLE OF CONTENTS

Glossary of Certain Definitions

1

PART I – FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

5

Condensed Consolidated Balance Sheets

5

Condensed Consolidated Statements of Operations

6

Condensed Consolidated Statements of Cash Flows

8

Condensed Consolidated Statements of Equity (Deficit)

10

Notes to Condensed Consolidated Financial Statements

11

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

38

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

56

Item 4.

Controls and Procedures

57

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

57

Item 1A.

Risk Factors

57

Item 6.

Exhibits

63

Table of Contents

GLOSSARY OF CERTAIN DEFINITIONS

Unless the context otherwise requires, the terms “we,” “us,” “our” or “ours” when used in this Quarterly Report on Form 10-Q refer to Whiting Petroleum Corporation, together with its consolidated subsidiaries.  When the context requires, we refer to these entities separately.

We have included below the definitions for certain terms used in this report:

“ASC” Accounting Standards Codification.

“Bankruptcy Code” Title 11 of the United States Code.

“Bankruptcy Court” United States Bankruptcy Court for the Southern District of Texas.

“Bbl” One stock tank barrel, or 42 U.S. gallons liquid volume, used in this report in reference to oil, NGLs and other liquid hydrocarbons.

“Bcf” One billion cubic feet, used in reference to natural gas.

“BOE” One stock tank barrel of oil equivalent, computed on an approximate energy equivalent basis that one Bbl of crude oil equals six Mcf of natural gas and one Bbl of crude oil equals one Bbl of natural gas liquids.

“Btu” or “British thermal unit” The quantity of heat required to raise the temperature of one pound of water one degree Fahrenheit.

“completion” The process of preparing an oil and gas wellbore for production through the installation of permanent production equipment, as well as perforation and fracture stimulation to optimize production.

“costless collar” An option position where the proceeds from the sale of a call option at its inception fund the purchase of a put option at its inception.  

“deterministic method” The method of estimating reserves or resources using a single value for each parameter (from the geoscience, engineering or economic data) in the reserves calculation.

“development well” A well drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.

“differential” The difference between a benchmark price of oil and natural gas, such as the NYMEX crude oil spot price, and the wellhead price received.

“FASB” Financial Accounting Standards Board.

“field” An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition.  There may be two or more reservoirs in a field that are separated vertically by intervening impervious strata, or laterally by local geologic barriers, or both.  Reservoirs that are associated by being in overlapping or adjacent fields may be treated as a single or common operational field.  The geological terms “structural feature” and “stratigraphic condition” are intended to identify localized geological features as opposed to the broader terms of basins, trends, provinces, plays, areas of interest, etc.

“GAAP” Generally accepted accounting principles in the United States of America.

“ISDA” International Swaps and Derivatives Association, Inc.

“lease operating expense” or “LOE” The expenses of lifting oil or gas from a producing formation to the surface, constituting part of the current operating expenses of a working interest, and also including labor, superintendence, supplies, repairs, short-lived assets,

1

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maintenance, allocated overhead costs and other expenses incidental to production, but not including lease acquisition or drilling or completion expenses.

“LIBOR” London interbank offered rate.

“MBbl” One thousand barrels of oil, NGLs or other liquid hydrocarbons.

“MBbl/d” One MBbl per day.

“MBOE” One thousand BOE.

“MBOE/d” One MBOE per day.

“Mcf” One thousand cubic feet, used in reference to natural gas.

“MMBbl” One million barrels of oil, NGLs or other liquid hydrocarbons.

“MMBOE” One million BOE.

“MMBtu” One million British Thermal Units, used in reference to natural gas.

“MMcf” One million cubic feet, used in reference to natural gas.

“MMcf/d” One MMcf per day.

“net production” The total production attributable to our fractional working interest owned.

“NGL” Natural gas liquid.

“NYMEX” The New York Mercantile Exchange.

“plugging and abandonment” Refers to the sealing off of fluids in the strata penetrated by a well so that the fluids from one stratum will not escape into another or to the surface.  Regulations of most states legally require plugging of abandoned wells.

“probabilistic method” The method of estimating reserves using the full range of values that could reasonably occur for each unknown parameter (from the geoscience and engineering data) to generate a full range of possible outcomes and their associated probabilities of occurrence.

“prospect” A property on which indications of oil or gas have been identified based on available seismic and geological information.

“proved developed reserves” Proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well.

“proved reserves” Those reserves which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs and under existing economic conditions, operating methods and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation.  The project to extract the hydrocarbons must have commenced, or the operator must be reasonably certain that it will commence the project, within a reasonable time.

The area of the reservoir considered as proved includes all of the following:

a.The area identified by drilling and limited by fluid contacts, if any, and

2

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b.Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.

Reserves that can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when both of the following occur:

a.Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based, and
b.The project has been approved for development by all necessary parties and entities, including governmental entities.

Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined.  The price shall be the average price during the 12-month period before the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

“proved undeveloped reserves” or “PUDs” Proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.  Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.  Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless specific circumstances justify a longer time.  Under no circumstances shall estimates of proved undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, or by other evidence using reliable technology establishing reasonable certainty.

“reasonable certainty” If deterministic methods are used, reasonable certainty means a high degree of confidence that the quantities will be recovered.  If probabilistic methods are used, there should be at least a 90 percent probability that the quantities actually recovered will equal or exceed the estimate.  A high degree of confidence exists if the quantity is much more likely to be achieved than not, and, as changes due to increased availability of geoscience (geological, geophysical and geochemical) engineering, and economic data are made to estimated ultimate recovery with time, reasonably certain estimated ultimate recovery is much more likely to increase or remain constant than to decrease.

“reserves” Estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations.  In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.

“reservoir” A porous and permeable underground formation containing a natural accumulation of producible crude oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.

“resource play” An expansive contiguous geographical area with known accumulations of crude oil or natural gas reserves that has the potential to be developed uniformly with repeatable commercial success due to advancements in horizontal drilling and completion technologies.

“royalty” The amount or fee paid to the owner of mineral rights, expressed as a percentage or fraction of gross income from crude oil or natural gas produced and sold, unencumbered by expenses relating to the drilling, completing or operating of the affected well.

“SEC” The United States Securities and Exchange Commission.

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“working interest” The interest in a crude oil and natural gas property (normally a leasehold interest) that gives the owner the right to drill, produce and conduct operations on the property and to a share of production, subject to all royalties, overriding royalties and other burdens and to all costs of exploration, development and operations and all associated risks.

“workover” Operations on a producing well to restore or increase production.

4

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PART I – FINANCIAL INFORMATION

Item 1.    Condensed Consolidated Financial Statements

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share and per share data)

Successor

Predecessor

September 30,

December 31,

2020

2019

ASSETS

Current assets:

Cash and cash equivalents

$

13,702

$

8,652

Restricted cash

13,233

-

Accounts receivable trade, net

128,577

308,249

Prepaid expenses and other

22,056

14,082

Total current assets

177,568

330,983

Property and equipment:

Oil and gas properties, successful efforts method

1,829,472

12,812,007

Other property and equipment

72,856

178,689

Total property and equipment

1,902,328

12,990,696

Less accumulated depreciation, depletion and amortization

(19,447)

(5,735,239)

Total property and equipment, net

1,882,881

7,255,457

Other long-term assets

38,007

50,281

TOTAL ASSETS

$

2,098,456

$

7,636,721

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable trade

$

44,171

$

80,100

Revenues and royalties payable

146,767

202,010

Accrued capital expenditures

14,809

64,263

Accrued liabilities and other

63,987

85,007

Accrued lease operating expenses

23,757

38,262

Accrued interest

1,432

53,928

Taxes payable

16,985

26,844

Total current liabilities

311,908

550,414

Long-term debt

400,328

2,799,885

Asset retirement obligations

119,262

131,208

Operating lease obligations

17,749

31,722

Deferred income taxes

-

73,593

Other long-term liabilities

19,723

24,928

Total liabilities

868,970

3,611,750

Commitments and contingencies

Equity:

Predecessor common stock, $0.001 par value, 225,000,000 shares authorized; 91,743,571 issued and 91,326,469 outstanding as of December 31, 2019

-

92

Successor common stock, $0.001 par value, 500,000,000 shares authorized; 38,051,210 issued and outstanding as of September 30, 2020

38

-

Additional paid-in capital

1,189,178

6,409,991

Accumulated earnings (deficit)

40,270

(2,385,112)

Total equity

1,229,486

4,024,971

TOTAL LIABILITIES AND EQUITY

$

2,098,456

$

7,636,721

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

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WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

Successor

Predecessor

One Month Ended September 30, 2020

Two Months Ended August 31, 2020

Three Months Ended September 30, 2019

OPERATING REVENUES

Oil, NGL and natural gas sales

$

61,084

$

122,558

$

375,891

OPERATING EXPENSES

Lease operating expenses

18,526

32,646

85,320

Transportation, gathering, compression and other

1,980

4,259

11,176

Production and ad valorem taxes

5,908

10,362

35,220

Depreciation, depletion and amortization

20,110

71,240

211,025

Exploration and impairment

4,207

10,217

10,890

General and administrative

10,345

16,513

29,890

Derivative (gain) loss, net

(30,594)

43,125

(30,597)

Loss on sale of properties

395

1,280

595

Amortization of deferred gain on sale

-

(1,171)

(2,266)

Total operating expenses

30,877

188,471

351,253

INCOME (LOSS) FROM OPERATIONS

30,207

(65,913)

24,638

OTHER INCOME (EXPENSE)

Interest expense

(2,128)

(11,379)

(48,447)

Gain on extinguishment of debt

-

-

4,598

Interest income and other

6

139

144

Reorganization items, net

-

259,232

-

Total other income (expense)

(2,122)

247,992

(43,705)

INCOME (LOSS) BEFORE INCOME TAXES

28,085

182,079

(19,067)

INCOME TAX EXPENSE (BENEFIT)

Current

2,316

-

-

Deferred

(14,501)

(55,346)

-

Total income tax benefit

(12,185)

(55,346)

-

NET INCOME (LOSS)

$

40,270

$

237,425

$

(19,067)

INCOME (LOSS) PER COMMON SHARE

Basic

$

1.06

$

2.60

$

(0.21)

Diluted

$

1.06

$

2.60

$

(0.21)

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

38,051

91,464

91,299

Diluted

38,051

91,464

91,299

(Continued)

6

Table of Contents

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

Successor

Predecessor

One Month Ended September 30, 2020

Eight Months Ended August 31, 2020

Nine Months Ended September 30, 2019

OPERATING REVENUES

Oil, NGL and natural gas sales

$

61,084

$

459,004

$

1,191,644

OPERATING EXPENSES

Lease operating expenses

18,526

158,228

256,384

Transportation, gathering, compression and other

1,980

22,266

32,145

Production and ad valorem taxes

5,908

41,204

102,796

Depreciation, depletion and amortization

20,110

338,757

612,166

Exploration and impairment

4,207

4,184,830

44,045

General and administrative

10,345

91,816

97,437

Derivative (gain) loss, net

(30,594)

(181,614)

7,431

Loss on sale of properties

395

927

1,681

Amortization of deferred gain on sale

-

(5,116)

(6,963)

Total operating expenses

30,877

4,651,298

1,147,122

INCOME (LOSS) FROM OPERATIONS

30,207

(4,192,294)

44,522

OTHER INCOME (EXPENSE)

Interest expense

(2,128)

(73,054)

(145,274)

Gain on extinguishment of debt

-

25,883

4,598

Interest income and other

6

211

1,102

Reorganization items, net

-

217,419

-

Total other income (expense)

(2,122)

170,459

(139,574)

INCOME (LOSS) BEFORE INCOME TAXES

28,085

(4,021,835)

(95,052)

INCOME TAX EXPENSE (BENEFIT)

Current

2,316

2,718

-

Deferred

(14,501)

(59,092)

(1,373)

Total income tax benefit

(12,185)

(56,374)

(1,373)

NET INCOME (LOSS)

$

40,270

$

(3,965,461)

$

(93,679)

INCOME (LOSS) PER COMMON SHARE

Basic

$

1.06

$

(43.37)

$

(1.03)

Diluted

$

1.06

$

(43.37)

$

(1.03)

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

38,051

91,423

91,274

Diluted

38,051

91,423

91,274

(Concluded)

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

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WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)

Successor

Predecessor

One Month Ended September 30, 2020

Eight Months Ended August 31, 2020

Nine Months Ended September 30, 2019

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$

40,270

$

(3,965,461)

$

(93,679)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation, depletion and amortization

20,110

338,757

612,166

Deferred income tax benefit

(14,501)

(59,092)

(1,373)

Amortization of debt issuance costs, debt discount and debt premium

371

13,535

23,707

Stock-based compensation

-

4,188

5,086

Amortization of deferred gain on sale

-

(5,116)

(6,963)

Loss on sale of properties

395

927

1,681

Oil and gas property impairments

-

4,161,885

15,729

Gain on extinguishment of debt

-

(25,883)

(4,598)

Non-cash derivative (gain) loss

(29,563)

(136,131)

22,228

Non-cash reorganization items, net

-

(274,588)

-

Other, net

(438)

(223)

1,141

Changes in current assets and liabilities:

Accounts receivable trade, net

7,752

181,416

(4,076)

Prepaid expenses and other

1,133

(5,491)

4,998

Accounts payable trade and accrued liabilities

(18,163)

(46,734)

(18,397)

Revenues and royalties payable

1,261

(56,504)

(28,110)

Taxes payable

3,013

(12,872)

(8,615)

Net cash provided by operating activities

11,640

112,613

520,925

CASH FLOWS FROM INVESTING ACTIVITIES

Drilling and development capital expenditures

(9,040)

(238,456)

(624,707)

Acquisition of oil and gas properties

(162)

(493)

(5,955)

Other property and equipment

56

(1,072)

(7,525)

Proceeds from sale of properties

532

29,273

66,738

Net cash used in investing activities

(8,614)

(210,748)

(571,449)

CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings under Predecessor Credit Agreement

-

1,185,000

1,980,000

Repayments of borrowings under Predecessor Credit Agreement

-

(1,402,259)

(1,615,000)

Borrowings under Exit Credit Agreement

75,000

425,328

-

Repayments of borrowings under Exit Credit Agreement

(100,000)

-

-

Repurchase of 1.25% Convertible Senior Notes due 2020

-

(52,890)

(297,000)

Repurchase of 5.75% Senior Notes due 2021

-

-

(23,461)

Debt issuance and extinguishment costs

-

(12,784)

(36)

Restricted stock used for tax withholdings

-

(307)

(3,696)

Principal payments on finance lease obligations

(498)

(3,198)

(3,890)

Net cash provided by (used in) financing activities

$

(25,498)

$

138,890

$

36,917

(Continued)

8

Table of Contents

WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)

Successor

Predecessor

One Month Ended September 30, 2020

Eight Months Ended August 31, 2020

Nine Months Ended September 30, 2019

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

$

(22,472)

$

40,755

$

(13,607)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Beginning of period

49,407

8,652

13,607

End of period

$

26,935

$

49,407

$

-

SUPPLEMENTAL CASH FLOW DISCLOSURES

Interest paid, net of amounts capitalized

$

301

$

80,220

$

156,664

Cash paid for reorganization items

$

14,353

$

33,238

$

-

NONCASH INVESTING ACTIVITIES

Accrued capital expenditures and accounts payable related to property additions

$

23,245

$

26,796

$

147,295

NONCASH FINANCING ACTIVITIES

Derivative termination settlement payments used to repay borrowings under Predecessor Credit Agreement

$

-

$

157,741

$

-

The accompanying notes are an integral part of these condensed consolidated financial statements.

(Concluded)

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WHITING PETROLEUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) (unaudited)

(in thousands)

Additional

Common Stock

Paid-in

Accumulated

Total

Shares

Amount

Capital

Earnings (Deficit)

Equity (Deficit)

BALANCES - January 1, 2019 (Predecessor)

92,067

$

92

$

6,414,170

$

(2,143,946)

$

4,270,316

Net loss

-

-

-

(68,925)

(68,925)

Restricted stock forfeited

(106)

-

-

-

-

Restricted stock used for tax withholdings

(130)

-

(3,693)

-

(3,693)

Stock-based compensation

-

-

4,651

-

4,651

BALANCES - March 31, 2019 (Predecessor)

91,831

92

6,415,128

(2,212,871)

4,202,349

Net loss

-

-

-

(5,687)

(5,687)

Restricted stock issued

63

-

-

-

-

Restricted stock forfeited

(3)

-

-

-

-

Stock-based compensation

-

-

3,965

-

3,965

BALANCES - June 30, 2019 (Predecessor)

91,891

92

6,419,093

(2,218,558)

4,200,627

Net loss

-

-

-

(19,067)

(19,067)

Adjustment to equity component of Convertible Senior Notes upon extinguishment

-

-

(8,070)

-

(8,070)

Restricted stock issued

45

-

-

-

-

Restricted stock forfeited

(175)

-

-

-

-

Restricted stock used for tax withholdings

-

-

(3)

-

(3)

Stock-based compensation

-

-

(3,530)

-

(3,530)

BALANCES - September 30, 2019 (Predecessor)

91,761

$

92

$

6,407,490

$

(2,237,625)

$

4,169,957

BALANCES - January 1, 2020 (Predecessor)

91,744

$

92

$

6,409,991

$

(2,385,112)

$

4,024,971

Net loss

-

-

-

(3,628,571)

(3,628,571)

Adjustment to equity component of Convertible Senior Notes upon extinguishment

-

-

(3,461)

-

(3,461)

Restricted stock issued

185

-

-

-

-

Restricted stock forfeited

(238)

-

-

-

-

Restricted stock used for tax withholdings

(54)

-

(304)

-

(304)

Stock-based compensation

-

-

2,068

-

2,068

BALANCES - March 31, 2020 (Predecessor)

91,637

92

6,408,294

(6,013,683)

394,703

Net loss

-

-

-

(574,315)

(574,315)

Stock-based compensation

-

-

1,333

-

1,333

BALANCES - June 30, 2020 (Predecessor)

91,637

92

6,409,627

(6,587,998)

(178,279)

Net income

-

-

-

237,425

237,425

Restricted stock issued

9

-

-

-

-

Restricted stock used for tax withholdings

(4)

-

(4)

-

(4)

Stock-based compensation

-

-

787

-

787

Cancellation of Predecessor equity

(91,642)

(92)

(6,410,410)

6,350,573

(59,929)

BALANCES - August 31, 2020 (Predecessor)

-

$

-

$

-

$

-

$

-

Issuance of Successor equity

38,051

$

38

$

1,159,818

$

-

$

1,159,856

Issuance of Successor warrants

-

-

29,360

-

29,360

BALANCES - September 1, 2020 (Successor)

38,051

$

38

$

1,189,178

$