SEC Form 4/A · accession 0001214782-15-000222
HYDROCARB ENERGY CORP · HECC
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
This is an amendment (Form 4/A). It replaces an earlier filing for the same period.
Reporting owner
Kent Watts
Officer — CEO · Director · 10% Owner
Period of report
Jun 10, 2015
Accepted (ET)
Nov 25, 2015 · 5:37 pm EST
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 | 1,937,500 | $0.568 | A | 5,410,200 | 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; and (b) $100,000 in face amount of Convertible Subordinated Promissory Notes ($3.2 million in aggregate, the "Note"). Subsequently, as disclosed and reported on the Form 4 filed by Mr. Watts on September 25, 2015 (and not accounted for herein), the parties agreed to reduce the number of units to 30.
- F2Among other terms, all principal and accrued interest on the Note was convertible at the option of the holder into common stock of the Registrant at $4 per share. Additionally, at such time as the Registrant filed a designation of Series B Convertible Preferred Stock with the Secretary of State of Nevada (which occurred on September 28, 2015), the Note, and any and all accrued and unpaid interest thereon, automatically converted into shares of Series B Convertible Preferred Stock of the Registrant at a conversion price of $1,000 per share. 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. The conversion of the Note into Series B Convertible Preferred Stock is discussed in a subsequent Form 4 filing.
- 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 2,237,500 shares of common stock to Mr. Watts of which 300,000 shares are due to Mr. Watts legal counsel pursuant to a contingent legal fee settlement, which shares have therefore not been included in Mr. Watt's ownership above.
- 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.