SEC Form 4 · accession 0001214782-15-000225
HYDROCARB ENERGY CORP · HECC
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
Reporting owner
Kent Watts
Officer — CEO · Director · 10% Owner
Period of report
Sep 30, 2015
Accepted (ET)
Nov 25, 2015 · 6:43 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 StockF2 | Sep 30, 2015 | J | 3,210 | $1.42 | A | 3,970,166 | D |
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Convertible Subordinated PromissoryF3,F4 | $4.00 | Sep 28, 2015 | C | 1 | D | Jun 10, 2015 | Jun 10, 2018 | Series B Preferred Stock | 750,000 | 1 | D |
| Series B Convertible Preferred StockF3,F4,F5,F6 | — | Sep 28, 2015 | J | 3,000 | A | Sep 28, 2015 | — | Common Stock | 750,000 | 3,000 | D |
Explanation of responses
- F1Represents shares of common stock due on September 30, 2015, in consideration for accrued interest on the $516,667 in outstanding Convertible Subordinated Notes held by Mr. Watts.
- F2On 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). On November 16, 2015 the conditions to effectiveness of that agreement were removed, and the voting agreement went into effect. The voting rights remain in effect until the earlier of: (a) August 19, 2017; and (b) the due date of a certain convertible note which a company affiliated with Mr. Herndon (Duma Holdings, LLC) may choose to purchase from the Registrant in the future.
- F3Among other terms, all principal and accrued interest on the Convertible Subordinated Promissory Note in the amount of $3 million (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 (i.e., 3,000 shares of Series B Convertible Preferred Stock).
- F4The 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.
- F5Each share of Series B Convertible Preferred Stock converts into 250 shares of common stock.
- F6The conversion rights do not expire.