UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
(Amendment No. 2)
TIDELANDS OIL & GAS CORPORATION
(Name of Issuer)
Common Stock
(Title of Class of Securities)
886405109
(CUSIP Number)
December 31, 2005
(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 15 Pages
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Mercator Momentum Fund, L.P.
EIN:03-0021366
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
5. SOLE VOTING POWER
0
NUMBER OF -----------------------------------------------------------------
SHARES 6. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 751,974
EACH -----------------------------------------------------------------
REPORTING 7. SOLE DISPOSITIVE POWER
PERSON
WITH 0
-----------------------------------------------------------------
8. SHARED DISPOSITIVE POWER
751,974
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
751,974
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
0.97%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-2-
SCHEDULE 13G
CUSIP No. 886405109 Page 3 of 15 Pages
--------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Mercator Momentum Fund III, L.P.
EIN:32-0056070
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
5. SOLE VOTING POWER
0
NUMBER OF -----------------------------------------------------------------
SHARES 6. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 521,928
EACH -----------------------------------------------------------------
REPORTING 7. SOLE DISPOSITIVE POWER
PERSON
WITH 0
-----------------------------------------------------------------
8. SHARED DISPOSITIVE POWER
521,928
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
521,928
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
0.67%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-3-
SCHEDULE 13G
CUSIP No. 886405109 Page 4 of 15 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Monarch Pointe Fund, Ltd.
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
--------------------------------------------------------------------------------
5. SOLE VOTING POWER
0
NUMBER OF -----------------------------------------------------------------
SHARES 6. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,690,460
EACH -----------------------------------------------------------------
REPORTING 7. SOLE DISPOSITIVE POWER
PERSON
WITH 0
-----------------------------------------------------------------
8. SHARED DISPOSITIVE POWER
1,690,460
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,690,460
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
2.14%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-4-
SCHEDULE 13G
CUSIP No. 886405109 Page 5 of 15 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Robinson Reed, Inc.
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
--------------------------------------------------------------------------------
5. SOLE VOTING POWER
200,000
NUMBER OF -----------------------------------------------------------------
SHARES 6. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
EACH -----------------------------------------------------------------
REPORTING 7. SOLE DISPOSITIVE POWER
PERSON
WITH 0
-----------------------------------------------------------------
8. SHARED DISPOSITIVE POWER
200,000
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
200,000
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
0.26%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON*
CO
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-5-
SCHEDULE 13G
CUSIP No. 886405109 Page 6 of 15 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
M.A.G. Capital, 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
--------------------------------------------------------------------------------
5. SOLE VOTING POWER
0
-----------------------------------------------------------------
NUMBER OF 6. SHARED VOTING POWER
SHARES
BENEFICIALLY 6,336,072, some of which are held by Mercator Momentum Fund
OWNED BY and Mercator Momentum Fund III (together, the "Funds"), some
EACH of which are owned by Monarch Pointe Fund, Ltd. ("MPF"), and
REPORTING some of which are owned by M.A.G. Capital, LLC ("MAG"). MAG
PERSON is the general partner of the Funds and controls the
WITH investments of MPF.
-----------------------------------------------------------------
7. SOLE DISPOSITIVE POWER
0
-----------------------------------------------------------------
8. SHARED DISPOSITIVE POWER
6,536,072, some of which are held by the Funds, some by MPF,
some by Robinson Reed, Inc. ("RR") and some by MAG.
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,536,072
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
7.81%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON*
IA
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-6-
SCHEDULE 13G
CUSIP No. 886405109 Page 7 of 15 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
--------------------------------------------------------------------------------
5. SOLE VOTING POWER
0
-----------------------------------------------------------------
NUMBER OF 6. SHARED VOTING POWER
SHARES
BENEFICIALLY 6,336,072, all of which are held by the Funds, MPF and
OWNED BY MAG. David F. Firestone is Managing Member of MAG.
EACH -----------------------------------------------------------------
REPORTING 7. SOLE DISPOSITIVE POWER
PERSON
WITH 0
-----------------------------------------------------------------
8. SHARED DISPOSITIVE POWER
6,536,072, all of which are held by the Funds, MPF, RR and
MAG. David F. Firestone is Managing Member of MAG.
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,536,072
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
7.81%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-7-
SCHEDULE 13G
CUSIP No. 886405109 Page 8 of 15 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 M.A.G. Capital, LLC (formerly 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 Islands. MAG controls
the investments of MPF. Robinson Reed, Inc. ("RR") is a corporation organized
under the laws of the British Virgin Islands. MAG controls the investments of RR
in the Issuer's securities. The Funds, MPF, RR, 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 4200, 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. The business address of RR is AV.Du Leman 8B, CH-1003, Lausanne,
Switzerland.
(c) Each of the Funds is a California limited partnership. MAG, their
general partner, is a California limited liability company. Each of MPF and RR
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).
-8-
SCHEDULE 13G
CUSIP No. 886405109 Page 9 of 15 Pages
(d) |_| Investment company registered under Section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8).
(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.
MMF III owns shares of Common Stock. The Funds, MPF, RR and MAG each own
warrants to purchase shares of Common Stock.
The documentation governing the terms of the warrants contains provisions
prohibiting any exercise of the warrants that would result in the Reporting
Persons owning beneficially more than 9.99% 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 December 31, 2005, the Funds, MPF, RR and MAG owned the following
securities of the Issuer:
Momentum Fund owned warrants to purchase up to 751,974 shares of Common
Stock.
Momentum Fund III owned 3,836 shares of Common Stock and warrants to
purchase up to 518,092 shares of Common Stock.
MPF owned warrants to purchase up to 1,690,460 shares of Common Stock.
RR owned warrants to purchase up to 200,000 shares of Common Stock.
MAG owned warrants to purchase up to 3,371,710 shares of Common Stock.
-9-
SCHEDULE 13G
CUSIP No. 886405109 Page 10 of 15 Pages
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. The
right to vote the shares beneficially owned by RR is held solely by RR. The
right to dispose of the shares beneficially owned by RR is shared among RR, MAG
and David F. Firestone.
Assuming that the Issuer had 77,156,341 shares of Common Stock outstanding
as of December 31, 2005, which is the number reported by the Issuer as
outstanding as of September 30, 2005 in its Quarterly Report on Form 10-QSB for
the quarter ended September 30, 2005, 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 751,974 0.97%
Momentum Fund III 521,928 0.67%
MPF 1,690,460 2.14%
Robinson Reed 200,000 0.26%
MAG 6,536,072 7.81%
David F. Firestone 6,536,072 7.81%
-10-
SCHEDULE 13G
CUSIP No. 886405109 Page 11 of 15 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.
-11-
SCHEDULE 13G
CUSIP No. 886405109 Page 12 of 15 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: May 1, 2006 MERCATOR MOMENTUM FUND, L.P.
By: M.A.G. CAPITAL, LLC,
its general partner
By:
----------------------------------
Harry Aharonian, Portfolio Manager
Dated: May 1, 2006 MERCATOR MOMENTUM FUND III, L.P.
By: M.A.G. CAPITAL, LLC,
its general partner
By:
----------------------------------
Harry Aharonian, Portfolio Manager
Dated: May 1, 2006 MONARCH POINTE FUND, LTD.
By:
----------------------------------
Harry Aharonian, Portfolio Manager
Dated: May 1, 2006 ROBINSON REED, INC.
By:
----------------------------------
Harry Aharonian, Portfolio Manager
Dated: May 1, 2006 M.A.G. CAPITAL, LLC
By:
----------------------------------
Harry Aharonian, Portfolio Manager
Dated: May 1, 2006
--------------------------------
David F. Firestone
-12-
SCHEDULE 13G
CUSIP No. 886405109 Page 13 of 15 Pages
EXHIBIT INDEX
Exhibit A Agreement of Joint Filing
-13-
SCHEDULE 13G
CUSIP No. 886405109 Page 14 of 15 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.,
Robinson Reed, Inc., M.A.G. Capital, LLC and David F. Firestone and such other
holdings as may be reported therein.
Dated: May 1, 2006
MERCATOR MOMENTUM FUND, L.P.
By: M.A.G. CAPITAL, LLC,
its general partner
By:
----------------------------------
Harry Aharonian, Portfolio Manager
MERCATOR MOMENTUM FUND III, L.P.
By: M.A.G. CAPITAL, LLC,
its general partner
By:
----------------------------------
Harry Aharonian, Portfolio Manager
MONARCH POINTE FUND, LTD.
By:
----------------------------------
Harry Aharonian, Portfolio Manager
ROBINSON REED, INC.
By:
----------------------------------
Harry Aharonian, Portfolio Manager
-14-
SCHEDULE 13G
CUSIP No. 886405109 Page 15 of 15 Pages
M.A.G. CAPITAL, LLC
By:
----------------------------------
Harry Aharonian, Portfolio Manager
----------------------------------
David F. Firestone
-15-