0001214782-15-000156.txt : 20150925
0001214782-15-000156.hdr.sgml : 20150925
20150925141354
ACCESSION NUMBER: 0001214782-15-000156
CONFORMED SUBMISSION TYPE: 4
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20150826
FILED AS OF DATE: 20150925
DATE AS OF CHANGE: 20150925
ISSUER:
COMPANY DATA:
COMPANY CONFORMED NAME: HYDROCARB ENERGY CORP
CENTRAL INDEX KEY: 0001425808
STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311]
IRS NUMBER: 000000000
STATE OF INCORPORATION: NV
FISCAL YEAR END: 1231
BUSINESS ADDRESS:
STREET 1: 800 GESSNER, SUITE 375
CITY: HOUSTON
STATE: TX
ZIP: 77024
BUSINESS PHONE: 281-408-4880
MAIL ADDRESS:
STREET 1: 800 GESSNER, SUITE 375
CITY: HOUSTON
STATE: TX
ZIP: 77024
FORMER COMPANY:
FORMER CONFORMED NAME: DUMA ENERGY CORP
DATE OF NAME CHANGE: 20120404
FORMER COMPANY:
FORMER CONFORMED NAME: STRATEGIC AMERICAN OIL CORP
DATE OF NAME CHANGE: 20080201
REPORTING-OWNER:
OWNER DATA:
COMPANY CONFORMED NAME: WATTS KENT
CENTRAL INDEX KEY: 0001038496
FILING VALUES:
FORM TYPE: 4
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-53313
FILM NUMBER: 151124967
MAIL ADDRESS:
STREET 1: 9700 BISSONNET
STREET 2: SUITE 1700
CITY: HOUSTON
STATE: TX
ZIP: 77036
4
1
primary_doc.xml
PRIMARY DOCUMENT
X0306
4
2015-08-26
0
0001425808
HYDROCARB ENERGY CORP
HECC
0001038496
WATTS KENT
3803 PINE BRANCH DRIVE
PEARLAND
TX
77581
1
1
1
0
Chief Executive Officer
Common Stock
2015-08-27
4
S
0
499997
0.5
D
5113619
D
Common Stock
2015-09-08
4
S
0
166666
0.5
D
4946953
D
Common Stock
2015-09-16
4
S
0
50000
0.5
D
4896953
D
Common Stock
2015-09-17
4
S
0
513335
0.5
D
4383618
D
Common Stock
2015-09-21
4
S
0
66667
0.5
D
4316951
D
Common Stock
2015-09-21
4
J
0
50000
D
4266951
D
Convertible Subordinated Promissory
0.75
2015-09-14
4
J
0
1
A
2015-09-14
2018-09-14
Common Stock
466667
1
D
Convertible Subordinated Promissory
0.75
2015-09-17
4
J
0
1
A
2015-09-17
2018-09-17
Common Stock
222223
1
D
Convertible Subordinated Promissory
4
2015-09-21
4
J
0
1
D
2015-06-10
2018-06-10
Series B Preferred Stock
50000
1
D
In August and September 2015, Mr. Watts sold an aggregate of 1,296,665 shares of restricted common stock which he held to thirteen purchasers in private transactions for $0.50 per share ($648,333 in aggregate). A closing condition to the sale was that Mr. Watts enter into the voting agreement described in footnote (2) below and that Mr. Watts use the funds received to purchase units as described in footnote (3) below.
On or around August 25, 2015, Mr. Watts entered into a voting agreement in favor of S. Chris Herndon, a member of the Board of Directors of the Registrant. Pursuant to the voting agreement, Mr. Watts provided Mr. Herndon a voting proxy to vote all of the shares of common stock which Mr. Watts owns or may acquire in the future, to vote to elect or remove (as applicable) 66.6% of members of the Registrant's Board of Directors on any stockholder vote (i.e., 2 out of 3 directors). The voting agreement was to become effective, only if Mr. Watts sold $1 million in securities in private transactions on similar terms as described above before September 21, 2015, which transactions did not occur, and which voting agreement has subsequently terminated with no force or effect.
On September 14, 2015, Mr. Watts subscribed for $350,000 in Convertible Subordinated Promissory Notes.
All principal and accrued interest on the Convertible Subordinated Promissory Notes is convertible into common stock at a conversion price of $0.75 per share at any time. Additionally, the Registrant may force the conversion of the Convertible Subordinated Promissory Notes into common stock in the event the trading price of the Registrant's common stock is equal to at least $5.00 per share for at least 20 out of any 30 consecutive trading days. Any shares of common stock issuable upon conversion of the Convertible Subordinated Promissory Notes are subject to a lock-up whereby no shares of common stock can be sold until January 1, 2016, and no more than 2,500 shares of common stock can be sold per day thereafter until the Registrant's common stock is listed on the NASDAQ or NYSE market or the trading volume of the Registrant's common stock is in excess of 100,000 shares per day.
On September 17, 2015, Mr. Watts subscribed for $166,667 in Convertible Subordinated Promissory Notes.
On September 21, 2015, Mr. Watts and the Registrant entered into a First Amendment to Exchange Agreement, which amended the Exchange Agreement dated June 10, 2015. Pursuant to the original terms of the Exchange Agreement, Mr. Watts exchanged 8,188 shares of Series A 7% Convertible Voting Preferred Stock, and accrued and unpaid dividends, assuming such Series A 7% Convertible Voting Preferred Stock was correctly designated and issued, into 32 units, each consisting of (a) 25,000 shares of the restricted common stock of the Registrant; and (b) $100,000 in face amount of Convertible Subordinated Promissory Notes. Mr. Watts received an aggregate of 800,000 shares of common stock and a Convertible Promissory Note with an aggregate principal amount of $3.2 million and a maturity date of June 10, 2018 in connection with the Exchange Agreement. The First Amendment reduced the total Units due to Mr. Watts to 30 units.
Among other terms, all principal and accrued interest on the Notes are convertible at the option of the holder into common stock of the Registrant at $4 per share. Additionally, at such time as the Registrant has filed a designation of Series B Convertible Preferred Stock with the Secretary of State of Nevada, the Notes, and any and all accrued and unpaid interest thereon, automatically converts into shares of Series B Convertible Preferred Stock of the Registrant at a conversion price of $1,000 per share (with any remaining amount payable in cash at the time of conversion). The terms of the Notes and Series B Convertible Preferred Stock are described in greater detail in the Form 8-K filed by the Registrant with the SEC on June 19, 2015.
/s/ Kent P. Watts
2015-09-25