UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
(Amendment No. ___)
TIDELANDS OIL & GAS CORPORATION
(Name of Issuer)
Common Stock
(Title of Class of Securities)
886405109
(CUSIP Number)
November 18, 2004
(Date of Event Which Requires Filing of this Statement)
|_| Rule 13d-1(b)
|X| Rule 13d-1(c)
|_| Rule 13d-1(d)
SCHEDULE 13G
CUSIP No. 886405109 Page 2 of 13 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Mercator Momentum Fund, L.P.
EIN:03-0021366
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. CITIZENSHIP OR PLACE OF ORGANIZATION
California
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NUMBER OF 5. SOLE VOTING POWER
SHARES 0
-----------------------------------------------------------------
BENEFICIALLY 6. SHARED VOTING POWER
OWNED BY 2,789,372
-----------------------------------------------------------------
EACH 7. SOLE DISPOSITIVE POWER
REPORTING 0
-----------------------------------------------------------------
PERSON 8. SHARED DISPOSITIVE POWER
WITH 2,789,372
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9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,789,372
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
4.512%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON
PN
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-2-
SCHEDULE 13G
CUSIP No. 886405109 Page 3 of 13 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Mercator Momentum Fund III, L.P.
EIN:32-0056070
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. CITIZENSHIP OR PLACE OF ORGANIZATION
California
--------------------------------------------------------------------------------
NUMBER OF 5. SOLE VOTING POWER
SHARES 0
-----------------------------------------------------------------
BENEFICIALLY 6. SHARED VOTING POWER
OWNED BY 1,921,811
-----------------------------------------------------------------
EACH 7. SOLE DISPOSITIVE POWER
REPORTING 0
-----------------------------------------------------------------
PERSON 8. SHARED DISPOSITIVE POWER
WITH 1,921,811
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,921,811
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
3.153%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON
PN
--------------------------------------------------------------------------------
-3-
SCHEDULE 13G
CUSIP No. 886405109 Page 4 of 13 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Monarch Pointe Fund, Ltd.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3. SEC USE ONLY
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4. CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
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NUMBER OF 5. SOLE VOTING POWER
SHARES 0
-----------------------------------------------------------------
BENEFICIALLY 6. SHARED VOTING POWER
OWNED BY 6,270,597
-----------------------------------------------------------------
EACH 7. SOLE DISPOSITIVE POWER
REPORTING 0
-----------------------------------------------------------------
PERSON 8. SHARED DISPOSITIVE POWER
WITH 6,270,597
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,270,597
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.603%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON
PN
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-4-
SCHEDULE 13G
CUSIP No. 886405109 Page 5 of 13 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Mercator Advisory Group, LLC
EIN: 300021359
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. CITIZENSHIP OR PLACE OF ORGANIZATION
California
--------------------------------------------------------------------------------
NUMBER OF 5. SOLE VOTING POWER
SHARES 0
-----------------------------------------------------------------
BENEFICIALLY 6. SHARED VOTING POWER
OWNED BY 6,558,009, some of which are held by Mercator Momentum Fund
and Mercator Momentum Fund III (together, the "Funds"), some
EACH of which are owned by Monarch Pointe Fund, Ltd. ("MPF"), and
some of which are owned by Mercator Advisory Group, LLC
REPORTING ("MAG"). MAG is the general partner of the Funds and
controls the investments of MPF.
PERSON -----------------------------------------------------------------
7. SOLE DISPOSITIVE POWER
WITH
0
-----------------------------------------------------------------
8. SHARED DISPOSITIVE POWER
6,558,009, some of which are held by the Funds, some by MPF
and some by MAG.
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,558,009
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.999%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON
IA
--------------------------------------------------------------------------------
-5-
SCHEDULE 13G
CUSIP No. 886405109 Page 6 of 13 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
David F. Firestone
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 5. SOLE VOTING POWER
SHARES 0
-----------------------------------------------------------------
BENEFICIALLY 6. SHARED VOTING POWER
OWNED BY 6,558,009, all of which are held by the Funds, MPF and MAG.
David F. Firestone is Managing Member of MAG.
EACH -----------------------------------------------------------------
7. SOLE DISPOSITIVE POWER
REPORTING
0
PERSON -----------------------------------------------------------------
8. SHARED DISPOSITIVE POWER
WITH
6,558,009, all of which are held by the Funds, MPF and MAG.
David F. Firestone is Managing Member of MAG.
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,558,009
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.999%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
-6-
SCHEDULE 13G
CUSIP No. 886405109 Page 7 of 13 Pages
This statement is hereby amended and restated in its entirety as follows:
Item 1. Issuer.
(a) The name of the issuer is Tidelands Oil & Gas Corporation (the
"Issuer").
(b) The address of the Issuer's principal executive office is 1862 West
Bitters Rd., San Antonio, Texas 78410.
Item 2. Reporting Person and Security.
(a) Mercator Momentum Fund, L.P. ("Momentum Fund") and Mercator Momentum
Fund III, L.P. ("Momentum Fund III" and, with Momentum Fund, the "Funds") are
private investment limited partnerships organized under California law. The
general partner of each of the Funds is Mercator Advisory Group, LLC ("MAG"), a
California limited liability company. David F. Firestone is the Managing Member
of MAG. Monarch Pointe Fund, Ltd. ("MPF") is a corporation organized under the
laws of the British Virgin Island. MAG controls the investments of MPF. The
Funds, MPF, MAG and David F. Firestone are referred to herein as the "Reporting
Persons."
(b) The business address of each of the Funds, MAG and David F. Firestone
is 555 S. Flower Street, Suite 4500, Los Angeles, CA 90071. The business address
of MPF is c/o Bank of Ireland Securities Services, Ltd., New Century House,
International Financial Services Center, Mayor Street Lower, Dublin 1, Republic
of Ireland.
(c) Each of the Funds is a California limited partnership. MAG, their
general partner, is a California limited liability company. MPF is a corporation
organized under the laws of the British Virgin Islands.
(d) The title of the class of securities to which this statement relates
is the common stock of the Issuer, par value $0.001 per share (the "Common
Stock").
(e) The CUSIP number is 886405109.
Item 3. If This Statement is Filed Pursuant to Rule 13d-1(b) or 13d-2(b) or (c),
Check Whether the Person Filing is a:
(a) |_| Broker or dealer registered under Section 15 of the Act (15 U.S.C.
78o).
(b) |_| Bank as defined in Section 3(a)(6) of the Act (15 U.S.C. 78c).
(c) |_| Insurance company as defined in Section 3(a)(19) of the Act (15
U.S.C. 78c).
(d) |_| Investment company registered under Section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8).
-7-
SCHEDULE 13G
CUSIP No. 886405109 Page 8 of 13 Pages
(e) |_| An investment adviser in accordance with ss.
240.13d-1(b)(1)(ii)(E).
(f) |_| An employee benefit plan or endowment fund in accordance with ss.
240.13d-1(b)(1)(ii)(F).
(g) |_| A parent holding company or control person in accordance with ss.
240.13d-1(b)(1)(ii)(G).
(h) |_| A savings association as defined in Section 3(b) of the Federal
Deposit Insurance Act (12 U.S.C. 1813).
(i) |_| A church plan that is excluded from the definition of an
investment company under Section 3(c)(14) of the Investment Company Act of 1940
(15 U.S.C. 80a-3).
(j) |_| Group, in accordance with ss. 240.13d-1(b)(1)(ii)(J).
Not Applicable.
Item 4. Ownership.
The Funds, MPF and MAG each own warrants to purchase shares of Common
Stock. The Funds and MPF each own 7% Convertible Debentures (the "Debentures")
issued by the Issuer which are convertible into Common Stock. Each Debenture is
convertible into the number of shares of Common Stock determined by dividing the
principal balance of the Debenture by the Conversion Price at the time of
conversion. The Conversion Price is defined as 85% of the "Market Price," which
is defined as the average of the lowest four intra-day trading prices of the
Common Stock during the ten trading days preceding the conversion, rounded to
the nearest penny; providing, however, that the Conversion Price may not be less
than $0.45 or more than $0.76, adjusted for stock splits and similar events.
Upon the occurrence of certain events specified in the Debentures,
including any Event of Default, as defined in the Debentures, the Conversion
Price will be reduced from 85% of the Market Price to 75% of the Market Price,
but in no event higher than $0.76 or lower than $0.45.
The Funds and MPF purchased the Debentures from the Issuer, and the Funds,
MPF and MAG received the warrants on November 18, 2004.
The documentation governing the terms of the warrants and the Debentures
contains provisions prohibiting any exercise of the warrants or conversion of
Debentures that would result in the Reporting Persons owning beneficially more
than 9.999% of the outstanding shares of Common Stock as determined under
Section 13(d) of the Securities Exchange Act of 1934. The Reporting Persons have
never had beneficial ownership of more than 9.99% of the outstanding shares of
Common Stock.
As of November 18, 2004, the Funds, MPF and MAG owned the following
securities of the Issuer:
-8-
SCHEDULE 13G
CUSIP No. 886405109 Page 9 of 13 Pages
Momentum Fund owned Debentures with a principal balance of $1,270,000 and
warrants to purchase up to 835,526 shares of Common Stock.
Momentum Fund III owned Debentures with a principal balance of $875,000
and warrants to purchase up to 575,658 shares of Common Stock.
MPF owned Debentures with a principal balance of $2,855,000 and warrants
to purchase up to 1,878,290 shares of Common Stock.
MAG owned warrants to purchase up to 3,289,474 shares of Common Stock.
David F. Firestone owned no securities of the Issuer directly.
The right to vote and the right to dispose of the shares beneficially
owned by Momentum Fund, Momentum Fund III and MPF are, in each case, shared
among either Momentum Fund, Momentum Fund III or MPF, as applicable, and both
MAG and David F. Firestone. The right to vote and the right to dispose of the
shares beneficially owned by MAG are shared by MAG and David F. Firestone.
Assuming that the Issuer had 59,028,647 shares of Common Stock outstanding
as of November 18, 2004, which is the number reported by the Issuer as
outstanding as of September 30, 2004 in its Quarterly Report on Form 10-QSB for
the quarter ended September 30, 2004, the individual Reporting Persons had
beneficial ownership of the following numbers of shares of Common Stock which
represented the following percentages of the Common Stock outstanding:
Shares Owned Percentage
------------ ----------
Momentum Fund 2,789,372 4.512%
Momentum Fund III 1,921,811 3.153%
MPF 6,270,597 9.603%
MAG 6,558,009 9.999%
David F. Firestone 6,558,009 9.999%
The percentages of the outstanding Common Stock held by the Reporting
Parties set forth above and on the cover pages to this report were determined
using a Conversion Price of $0.65 with respect to the Debentures.
-9-
SCHEDULE 13G
CUSIP No. 886405109 Page 10 of 13 Pages
Item 5. Ownership of Five Percent or Less of a Class.
If this Schedule is being filed to report the fact that as of the date
hereof the Reporting Person has ceased to be the beneficial owner of more than
five percent of the class of securities, check the following [__]
Not Applicable.
Item 6. Ownership of More than Five Percent on Behalf of Another Person.
Not Applicable.
Item 7. Identification and Classification of the Subsidiary Which Acquired the
Security Being Reported on By the Parent Holding Company or Control
Person.
Not Applicable.
Item 8. Identification and Classification of Members of the Group.
Not Applicable.
Item 9. Notice of Dissolution of Group.
Not Applicable.
Item 10. Certifications.
By signing below I certify that, to the best of my knowledge and
belief, the securities referred to above were not acquired and are not held for
the purpose of or with the effect of changing or influencing the control of the
issuer of the securities and were not acquired and are not held in connection
with or as a participant in any transaction having that purpose or effect.
-10-
SCHEDULE 13G
CUSIP No. 886405109 Page 11 of 13 Pages
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: November 30, 2004 MERCATOR MOMENTUM FUND, L.P.
By: MERCATOR ADVISORY GROUP, LLC,
its general partner
By: /s/ David F. Firestone
-------------------------------------
David F. Firestone, Managing Member
Dated: November 30, 2004 MERCATOR MOMENTUM FUND III, L.P.
By: MERCATOR ADVISORY GROUP, LLC,
its general partner
By: /s/ David F. Firestone
-------------------------------------
David F. Firestone, Managing Member
Dated: November 30, 2004 MONARCH POINTE FUND, LTD.
By: /s/ David F. Firestone
-------------------------------------
Its: Director
Dated: November 30, 2004 MERCATOR ADVISORY GROUP, LLC
By: /s/ David F. Firestone
-------------------------------------
David F. Firestone, Managing Member
Dated: November 30, 2004
/s/ David F. Firestone
----------------------------------------
David F. Firestone
-11-
SCHEDULE 13G
CUSIP No. 886405109 Page 12 of 13 Pages
EXHIBIT INDEX
Exhibit A Agreement of Joint Filing
-12-
SCHEDULE 13G
CUSIP No. 886405109 Page 13 of 13 Pages
EXHIBIT A
AGREEMENT OF JOINT FILING
The undersigned hereby agree that they are filing jointly pursuant to Rule
13d-1 of the Securities Exchange Act of 1934 a report on Schedule 13G,
containing the information required by Schedule 13G, for shares of the common
stock of Tidelands Oil & Gas Corporation beneficially owned by Mercator Momentum
Fund, L.P., Mercator Momentum Fund III, L.P., Monarch Pointe Fund, Ltd.,
Mercator Advisory Group, LLC and David F. Firestone and such other holdings as
may be reported therein.
Dated: November 30, 2004
MERCATOR MOMENTUM FUND, L.P.
By: MERCATOR ADVISORY GROUP, LLC, its general partner
By: /s/ David F. Firestone
-------------------------------------
David F. Firestone, Managing Member
MERCATOR MOMENTUM FUND III, LP
By: MERCATOR ADVISORY GROUP, LLC,
its general partner
By: /s/ David F. Firestone
-------------------------------------
David F. Firestone, Managing Member
MONARCH POINTE FUND, LTD.
By: /s/ David F. Firestone
-------------------------------------
Its: Director
MERCATOR ADVISORY GROUP, LLC
By: /s/ David F. Firestone
-------------------------------------
David F. Firestone, Managing Member
/s/ David F. Firestone
-----------------------------------------
David F. Firestone
-13-