SEC Form 4 · accession 0001140361-15-029073
HYDROCARB ENERGY CORP · HECC
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
A later amendment supersedes this filing — read the amendment. The figures below are kept as originally reported (version chain, not an overwrite).
Reporting owner
Kent Watts
Officer — CEO · Director · 10% Owner
Period of report
Jun 10, 2015
Accepted (ET)
Jul 30, 2015 · 12:33 pm EDT
Rule 10b5-1 plan
unknown — predates the checkbox
Issuer CIK
0001425808
Table I — non-derivative securities
| Security | Date | Code | Shares | Price | A/D | Owned after | D/I | Nature of ownership |
|---|---|---|---|---|---|---|---|---|
| Common StockF3,F1,F2 | Jun 10, 2015 | J | 800,000 | — | A | 3,470,088 | D | |
| Common StockF3 | Jul 14, 2015 | J | 2,237,500 | — | A | 5,710,200 | D |
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Preferred Stock, Series AF1,F4 | $2.00 | Jun 10, 2015 | J | 8,188 | D | Dec 9, 2013 | — | Common Stock | 1,637,600 | 0 | D |
| Convertible Subordinated PromissoryF1,F2 | $4.00 | Jun 10, 2015 | J | 1 | A | Jun 10, 2015 | Jun 10, 2018 | Series B Preferred Stock | 800,000 | 1 | D |
Explanation of responses
- F1On June 10, 2015, Mr. Watts exchanged all rights he had to 8,188 shares of Series A 7% Convertible Voting Preferred Stock (which were required to have a face value of $3,275,200) and accrued and unpaid dividends thereunder, totaling, $327,879, 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. Specifically, 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 (the "Note").
- F2Among other terms, all principal and accrued interest on the Note is 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 Note, 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 Note 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.
- F3Pursuant to a settlement agreement entered into between Mr. Watts, Pasquale V. Scaturro, the Registrant's former Chief Executive Officer, and Mr. Watt's adult children, relating to certain disagreements which arose in connection with a private transaction not involving the Registrant, Mr. Scaturro agreed to transfer an aggregate of 2,327,500 shares of common stock to Mr. Watts.
- F4As part of the Stock Exchange Agreement whereby the Registrant acquired Hydrocarb Corporation, Mr. Watts received rights to 8,188 shares of Series A 7% Convertible Voting Preferred Stock which had a stated value of $400 per share and a conversion price of $2.00 per share. The conversion right did not expire.