SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 1, 1996
CHAPARRAL RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
Colorado 0-7261 84-0630863
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
621 Seventeenth Street, Suite 1301, Denver, Colorado 80293
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (303) 293-2340
15 Total Pages
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
As reported in the Company's Current Report on Form 8-K dated March 8,
1996, the Company had entered into an agreement, as amended, with Darka Petrol
Ticaret Limited Sirketi, a private Turkish company ("Darka"), to acquire 25% of
the outstanding stock of Central Asian Petroleum Guernsey Limited ("CAP-G")
owned by Darka for a total of $2,000,000 in cash and 685,000 shares of the
Company's common stock. The Company paid $600,000 of the cash purchase price and
delivered 625,000 shares of the Company's common stock on March 8, 1996.
On April 1, 1996, the Company completed the purchase from Darka by paying
the $1,400,000 cash balance and by delivering the balance of 60,000 shares.
Item 5. OTHER EVENTS.
On April 5, 1996, the Company completed a private placement of 14,000,000
shares of the Company's common stock at $0.50 a share for a gross amount of
$7,000,000. In connection with the sale of the 14,000,000 shares of common
stock, the Company issued a warrant to purchase 1,022,000 shares of the
Company's common stock for a nominal amount to the placement agent and paid
$21,849 of the placement agent's expenses. To date, the Company has used the
$6,978,151 of net proceeds from the sale of the 14,000,000 shares of common
stock to complete the acquisition of 25% of the outstanding stock of CAP-G owned
by Darka ($1,700,000), to complete the initial acquisition of 15% of the
outstanding stock of CAP-G from Guntekin Koksal ($600,000), to pay the principal
of a promissory note ($750,000) and to pay a portion of the Company's share of
the second quarter budget for the Karakuduk Oil Field project ($340,000). The
Company estimates that the balance of the net proceeds will be used to make the
payments in 1996 to Guntekin Koksal that are required for the Company to
complete the initial purchase of 15% of the outstanding stock of CAP-G
($918,750), to acquire 5% of the outstanding stock of CAP-G owned by OCSCO
($250,000), to pay the Company's remaining portion of the second quarter budget
for the Karakuduk Oil Field project ($410,000) and for working capital
($2,009,401).
In addition, effective April 5, 1996, two holders of promissory notes in
the aggregate amount of $300,000 converted their promissory notes into 600,000
shares of the Company's common stock.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of Central Asian Petroleum Guernsey Limited.
It is not practical to obtain the required financial statements
at the time of this report; the financial statements shall be filed as
soon as practicable but not later than the time required by Item
7(a)(4).
(b) Pro forma financial information.
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It is not practical to obtain the required pro forma financial
statements at the time of this report; the pro form financial
statements shall be filed as soon as practicable but not later than
the time required by Item 7(a)(4).
(c) Exhibits.
Exhibit 10.1 Chaparral Resources, Inc. Warrant Certificate for
1,022,000 shares of common stock.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 10, 1996
CHAPARRAL RESOURCES, INC.
By /s/ Matthew R.. Hoovler
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Matthew R. Hoovler, Vice President
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EXHIBIT INDEX
Exhibit Description Page No.
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10.1 Chaparral Resources, Inc. Warrant Certificate for 6
1,022,000 shares of common stock.
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE LAWS OF ANY STATE. THEY MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
1,022,000 Warrant Shares
CHAPARRAL RESOURCES, INC. WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received Allen & Company Incorporated or registered assigns (the "Holder")
is the owner of the number of warrant shares specified above, each of which
entitles the Holder thereof to purchase, at any time on or before the Expiration
Date (hereinafter defined), one fully paid and non-assessable share of Common
Stock, $.10 par value ("Common Stock"), of Chaparral Resources, Inc., a Colorado
corporation (the "Company"), for the Purchase Price (defined in Paragraph 1
below) in lawful money of the United States of America (subject to adjustment as
hereinafter provided).
1. Warrant; Purchase Price
This Warrant shall entitle the Holder initially to purchase 1,022,000
shares of Common Stock of the Company and the purchase price payable upon
exercise of the Warrant (the "Purchase Price") shall be $10.00. The Purchase
Price and number of shares of Common Stock issuable upon exercise of this
Warrant are subject to adjustment as provided in Article 6 hereof. The shares of
Common Stock issuable upon exercise of the Warrant (and/or other shares of
common stock so issuable by reason of any adjustments pursuant to Article 6) are
sometimes referred to herein as the "Warrant Shares".
2. Exercise; Expiration Date
2.1 The warrant is exercisable, at the option of the Holder, in whole
or in part at any time and from time to time after issuance and on or before the
Expiration Date, upon surrender of this Warrant Certificate to the Company
together with a duly completed Notice of Exercise, in the form attached hereto
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as Exhibit A, and payment of the Purchase Price. In the case of exercise of less
than the entire Warrant represented by this Warrant Certificate, the Company
shall cancel the Warrant Certificate upon the surrender thereof and shall
execute and deliver a new Warrant Certificate for the balance of such Warrant.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time on
April 4, 2002, or if such day shall in the State of New York be a holiday or a
day on which banks are authorized to close, then 5:00 p.m. New York time the
next following day which in the State of New York is not a holiday or a day on
which banks are authorized to close.
3. Registration and Transfer on Company Books
3.1 The Company shall maintain books for the registration and transfer
of the Warrant and the registration and transfer of the Warrant Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
4. Reservation of Shares
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrant, such number of shares of capital stock as shall
then be issuable upon the exercise of all outstanding Warrant. The Company
covenants that all shares of capital stock which shall be issuable upon exercise
of the Warrant shall be duly and validly issued and fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issue thereof, and that upon issuance such shares shall be listed on each
national securities exchange, if any, on which the other shares of such
outstanding capital stock of the Company are then listed.
5. Loss or Mutilation
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrant
Shares.
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6. Adjustment of Purchase Price and Number of
Shares Deliverable
6.1 The number of Warrant Shares purchasable upon the exercise of the
Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital
stock, (ii) subdivide its outstanding shares of Common Stock through
stock split or otherwise, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock, or (iv)
issue by reclassification of its of Common Stock (including any
reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation) other securities of the
Company, the number and/or nature of Warrant Shares purchasable upon
exercise of the Warrant immediately prior thereto shall be adjusted so
that the Holder shall be entitled to receive the kind and number of
Warrant Shares or other securities of the Company which he would have
owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. Any adjustment made pursuant to this paragraph (a) shall
become effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other
than a consolidation or merger in which the outstanding shares of the
Company's Common Stock are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other
disposition to another corporation of all or substantially all the
properties and assets of the Company, the Holder of the Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition that
appropriate provisions shall be made so that such Holder shall
thereafter be entitled to purchase) the kind and amount of shares of
stock and other securities and property (including cash) which the
Holder would have been entitled to receive had such Warrant been
exercised immediately prior to the effective date of such
reorganization, reclassification, consolidation, merger, sale, transfer
or other disposition; and in any such case appropriate adjustments
shall be made in the application of the provisions of this Article 6
with respect to rights and interest thereafter of the Holder of
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the Warrant to the end that the provisions of this Article 6 shall
thereafter be applicable, as near as reasonably may be, in relation to
any shares or other property thereafter purchasable upon the exercise
of the Warrant. The provisions of this Section 6.1(b) shall similarly
apply to successive reorganizations, reclassifications, consolidations,
mergers, sales, transfers or other dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of the Warrant is adjusted, as provided in this Section 6.1,
the Purchase Price with respect to the Warrant Shares shall be adjusted
by multiplying such Purchase Price immediately prior to such adjustment
by a fraction, of which the numerator shall be the number of Warrant
Shares purchasable upon the exercise of the Warrant immediately prior
to such adjustment, and of which the denominator shall be the number of
Warrant Shares so purchasable immediately thereafter.
6.2 Whenever the number of Warrant Shares purchasable upon the
exercise of the Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by the Chief Financial Officer or
Secretary of the Company, which sets forth the number of Warrant Shares
purchasable upon the exercise of the Warrant and the Purchase Price of such
Warrant Shares after such adjustment, a brief statement of the facts requiring
such adjustment and the computation by which such adjustment was made.
6.3 In the event that at any time prior to the expiration of the
Warrant and prior to its exercise:
(a) the Company shall declare any distribution (other than a cash
dividend or a dividend payable in securities of the Company with
respect to the Common Stock); or
(b) the Company shall offer for subscription to the holders of
the Common Stock any additional shares of stock of any class or any
other securities convertible into Common Stock or any rights to
subscribe thereto; or
(c) the Company shall declare any stock split, stock dividend,
subdivision, combination, or similar distribution with respect to the
Common Stock, regardless of the effect of any such event on the
outstanding number of shares of Common Stock; or
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(d) the Company shall declare a dividend, other than a dividend
payable in shares of the Company's own Common Stock; or
(e) there shall be any capital change in the Company as set forth
in Section 6.1(b); or
(f) there shall be a voluntary or involuntary dissolution,
liquidation, or winding up of the Company (other than in connection
with a consolidation, merger, or sale of all or substantially all of
its property, assets and business as an entity);
(each such event hereinafter being referred to as a "Notification Event"), the
Company shall cause to be mailed to the Holder, not less than 20 days prior to
the record date, if any, in connection with such Notification Event (provided,
however, that if there is no record date, or if 20 days prior notice is
impracticable, as soon as practicable) written notice specifying the nature of
such event and the effective date of, or the date on which the books of the
Company shall close or a record shall be taken with respect to, such event. Such
notice shall also set forth facts indicating the effect of such action (to the
extent such effect may be known at the date of such notice) on the Purchase
Price and the kind and amount of the shares of stock or other securities or
property deliverable upon exercise of the Warrant.
7. Conversion Rights
7.1 In lieu of exercise of any portion of the Warrant as provided in
Section 2.1 hereof, the Warrant represented by this Warrant Certificate (or any
portion thereof) may, at the election of the Holder, be converted into the
nearest whole number of shares of Common Stock equal to: (1) the product of (a)
the number of Warrant Shares to be so converted and (b) the excess, if any, of
(i) the market price per share with respect to the date of conversion over (ii)
the purchase price per Warrant Share in effect on the business day next
preceding the date of conversion, divided by (2) the market price per share with
respect to the date of conversion.
7.2 The conversion rights provided under this Section 7 may be
exercised in whole or in part and at any time and from time to time while any
portion of the Warrant remains outstanding. In order to exercise the conversion
privilege, the Holder shall surrender to the Company, at its offices, this
Warrant Certificate accompanied by a duly completed Notice of Conversion in the
form attached hereto as Exhibit B. The Warrant (or so much thereof as shall have
been surrendered for conversion) shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
Warrant Certificate for conversion in accordance with the
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foregoing provisions. As promptly as practicable on or after the conversion
date, the Company shall issue and shall deliver to the Holder (i) a certificate
or certificates representing the number of shares of Common Stock to which the
Holder shall be entitled as a result of the conversion, and (ii) if the Warrant
Certificate is being converted in part only, a new certificate of like tenor and
date for the balance of the unconverted portion of the Warrant Certificate.
8. Voluntary Adjustment by the Company
The Company may, at its option, at any time during the term of the
Warrant, reduce the then current Purchase Price to any amount deemed appropriate
by the Board of Directors of the Company and/or extend the date of the
expiration of the Warrant.
9. Registration Rights
The Company has agreed with Allen & Company Incorporated that the
Company will register for resale the Warrant Shares at the time the Company next
files a registration statement with the United States Securities and Exchange
Commission to register any of its securities.
10. Governing Law
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 5th day of April, 1996.
CHAPARRAL RESOURCES,
By: /s/ Matthew R. Hoovler
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Name: Matthew R. Hoovler
Title: Vice President
[SEAL]
Attest:
/s/ Barry W. Spector
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Name: Barry W. Spector
Title: Secretary
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EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
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Name of Holder
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Signature
Address:
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EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Common Stock of the Company
(the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7.1 of the accompanying Warrant
Certificate.
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Name of Holder
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Signature
Address:
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