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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
March 11, 1998
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Date of Report (date of earliest event reported)
CASMYN CORP.
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(Exact Name of Registrant as Specified in its Charter)
Colorado 0-14136 84-0987840
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
Incorporation) Number)
1335 Greg Street, Unit #104, Sparks, Nevada 89431
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(Address of principal executive offices)
(702) 353-4650
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(Registrant's telephone number,
including area code)
Exhibit Index
on Page 4
1 of 13 pages
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ITEM 5. OTHER EVENTS
The Company has sent a Proxy Statement to the holders of the Company's
First Convertible Preferred Stock (the "First Preferred") requesting approval of
an amendment to the existing preferred stock instrument to establish a
conversion floor price of $0.25 per common share and a conversion ceiling price
of $0.75 per share. The amendment will also permit the preferred holders voting
as a class to elect two directors. The request will be considered at a meeting
of the preferred holders to be held on March 26, 1998. In a letter to the
holders of the First Preferred, the Company indicated that it will defer
acceptance of all outstanding conversion requests until March 31, 1998. The
shares which were submitted for conversion prior to March 11, 1998 will be
issued at the prices dictated pursuant to the preferred stock instrument. If
the proposed amendment is passed, shares relating to conversion notices
submitted after March 10, 1998 will be issued at the greater of the price
dictated by the conversion formula or $0.25 subject to the $0.75 ceiling.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
c. Exhibits:
Exhibit
Number Description
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4.1 Letter to Preferred Holders, Notice of Proxy, Proxy Statement and
Form of Proxy
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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.
CASMYN CORP.
By /s/ Amyn Dahya
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Amyn Dahya, President
Dated: March 12, 1998
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INDEX TO EXHIBITS
Exhibit Page
Number Description Number
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4.1 Letter to the Preferred Holders, 5
Notice of Meeting, Proxy Statement
and Form of Proxy
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EXHIBIT 4.1
March 11, 1998
RE: CASMYN PREFERRED STOCK RESTRUCTURING
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Dear Casmyn Preferred Stockholder:
At a special meeting of the preferred holders to be held on March 26,
1998, the Company proposes to amend the terms of the First Convertible Preferred
Stock (the "First Preferred" or "Preferred") stock instrument as follows:
1. establish a conversion floor prices of $0.25 per common
share;
2. establish a conversion ceiling price of $0.75 per common
share; and
3. authorize the preferred holders voting as a class to elect
two directors as long as $20 million of preferred remains
outstanding.
We strongly recommend that the preferred holders accept this proposal.
The $0.25 conversion floor price will allow the market to value Casmyn's common
stock on a more rational basis. With the current threat of unlimited dilution,
rational market pricing is virtually impossible. Based on the proposal, and
assuming conversion of all preferred shares submitted for conversion prior to
March 11, 1998, there would be a maximum of 162 million common equivalent shares
outstanding before giving effect to future preferred stock dividends.
Absent the introduction of a floor price, the common stock may well
continue to drift lower with very limited liquidity. The prospect of
unquantifiable dilution could put the Company at risk with respect to
maintaining its listing on NASDAQ, which will clearly serve to the detriment of
all shareholders. Therefore, this proposal will maximize the chances that the
Company continues to be listed on NASDAQ. In addition, the Company believes
that the existence of the floor will serve to relieve selling pressure on the
common stock.
Exhibit 4.1
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The purposes of the proposed ceiling is to give the Preferred holders
the opportunity for greater returns than are available in the existing Preferred
instrument in return for instituting the floor.
We have analyzed an exchange proposal made by a group of preferred
holders (the "Exchange Proposal") and authorized Salomon Smith Barney to meet
with these holders in order to review and understand it. We have also had
extensive discussions with our financial and legal advisors regarding the
Exchange Proposal and other restructuring alternatives. The Board of Directors
determined that it would not pursue the Exchange Proposal because the Board
believes that it is worse for the Company than the existing preferred stock
agreement. In particular, the Board identified two key reasons for this
position: (1) they do not believe it would be in the best interests of the
Company or its shareholders to commit today to a sale of the assets under
current market conditions and (ii) there is no provision in the current
preferred instrument requiring the Company to cash out the preferred stock.
If this proposal is accepted, the senior management is prepared to
continue to manage the Company and build value for shareholders. In this event,
appropriate management contracts and incentives for both management and outside
directors would be instituted. A key component of the incentive program would
be options with a $0.25 strike price. Management will thereby have the
incentive to increase the stock price as they develop and grow the Company.
The Company will defer acceptance of all conversion requests until
March 31, 1998, which is three business days following the special meeting of
the Preferred shareholders. The shares which were submitted for conversion
prior amendment is passed, shares relating to conversion notices submitted after
March 10, 1998 will be issued at the greater of the price dictated by the
conversion formula or $0.25 subject to the $0.75 ceiling. Prior to the March
17, 1998 records date for the special meeting, the Company will allow conversion
requests to be withdrawn, and thereby the preferred shares subject to the
withdrawal notice will be permitted to vote at the special meeting.
Under Colorado law, the applicable law for Casmyn Corp., and the terms
of the preferred stock instrument, the proposed amendment may be implemented by
a vote of a simple majority of the preferred shares outstanding.
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We hope that you will accept this proposal. Without a sensible
restructuring of the preferred stock, the Company and its shareholders will
continue to be faced with the untenable situation resulting from infinite
potential dilution which does not serve the best interests of any of the
Company's shareholders. If you have any questions about the proposal, please
feel free to contact Al-Karim Haji or myself at 604-601-5200; Robert Martin at
(212) 783-8514 or Lee Buchwald at (212) 783-1760 both of Salomon Smith Barney.
Sincerely,
/S/Amyn Dahya
Amyn Dahya,
Chairman & CEO
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CASMYN CORP.
1500 West Georgia Street, 18th Floor
Vancouver, B.C. V6G 2Z6
(604) 601-5200
NOTICE OF SPECIAL MEETING OF
HOLDERS OF FIRST CONVERTIBLE PREFERRED STOCK
To the Holders of the First Convertible Preferred Stock of Casmyn Corp.:
Notice is hereby given of a Special Meeting (the "Meeting") of the
holders of the First Convertible Preferred Stock (the "First Preferred") of
Casmyn Corp., a Colorado corporation (the "Company"), which will be held at the
offices of Loeb & Loeb LLP, 1000 Wilshire Boulevard, Suite 1800, Los Angeles,
California 90017 at 10:00 a.m., Los Angeles time, on March 26, 1997, to consider
and act upon an amendment to the Company's Articles of Incorporation relating to
the First Preferred, all as more fully described in the accompanying Proxy
Statement which is incorporated herein by this reference.
Holders of the First Preferred at the close of business on March 17,
1998, the record date fixed by the Board of Directors, are entitled to notice
of, and to vote at, the Meeting.
THOSE WHO CANNOT ATTEND ARE URGED TO SIGN, DATE AND OTHERWISE COMPLETE
THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. ANY HOLDER OF THE
FIRST PREFERRED GIVING A PROXY HAS THE RIGHT TO REVOKE IT AT ANY TIME BEFORE IT
IS VOTED.
BY ORDER OF THE BOARD OF DIRECTORS
Amyn Dahya
Chairman of the Board, President and
Chief Executive Officer
Vancouver, British Columbia
March 11, 1998
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CASMYN CORP.
1500 West Georgia Street, 18th Floor
Vancouver, B.C. V6G 2Z6
(604) 601-5200
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PROXY STATEMENT
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The following information is furnished in connection with the
solicitation of proxies for a Special Meeting of the holders of the First
Convertible Preferred Stock (the "First Preferred") of Casmyn Corp., a Colorado
corporation (the "Company"), to be held at the offices of Loeb & Loeb LLP, 1000
Wilshire Boulevard, Suite 1800, Los Angeles, California 90017 on March 26, 1998,
and any adjournments thereof (the "Meeting"), for the purposes stated herein.
SOLICITATION AND REVOCATION OF PROXIES
A form of proxy is being furnished herewith by the Company to each
holder of the First Preferred, and, is solicited on behalf of the Board of
Directors of the Company for use at the Meeting. The entire cost of soliciting
these proxies will be borne by the Company. Proxies duly executed and returned
by holders of the First Preferred and received by the Company before the Meeting
will be voted FOR the proposed amendment to the Company's Articles of
Incorporation, unless a contrary choice is specified in the proxy. Where
specification is indicated as provided in the proxy, the shares represented by
the proxy will be voted and cast in accordance with the specification made. The
persons named as proxies were selected by the Board of Directors of the Company.
Your execution of the enclosed proxy will not effect your right as a
holder to the attend the Meeting and to vote in person. Any holder giving a
proxy has the right to revoke it at any time by (a) a later-dated proxy, (b) a
written revocation sent to and received by the Secretary of the Company prior to
the Meeting, or (c) attendance at the Meeting and voting in person.
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AMENDMENT TO ARTICLES OF INCORPORATION
TO CHANGE CERTAIN OF THE TERMS OF THE
FIRST CONVERTIBLE PREFERRED STOCK
The Board of Directors has unanimously approved and recommended to the
holders of the First Preferred an amendment (the "Preferred Amendment") to the
Articles of Incorporation of the Company amending the rights and preferences of
the First Preferred as follows:
1. To establish a conversion floor price of $0.25 cents per
common share.
2. To establish a conversion ceiling price of $0.75 cents per
common share; and
3. To authorize the holders of the First Preferred voting as
class to elect two directors as long as 800,000 shares
($20,000,000.00) of First Preferred remain outstanding.
The Board of Directors has approved the above proposed amendment for
the reasons set forth in the letter of Amyn Dahya dated March 11, 1998 which
accompanies this Proxy Statement. Attached as Exhibit A is a summary of the
proposed changes to the rights and preferences of the First Preferred.
Under the terms of the resolutions establishing the terms of the First
Preferred and applicable Colorado law, the approval of the Preferred Amendment
requires the consent of the holders of a majority of the First Preferred.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT
TO THE ARTICLES OF INCORPORATION TO CHANGE THE TERMS OF THE FIRST PREFERRED.
BY ORDER OF THE BOARD OF DIRECTORS
Amyn Dahya
Chairman of the Board, President
Chief Executive Officer
Vancouver, British Columbia
March 11, 1998
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HOLDERS OF THE FIRST PREFERRED ARE URGED TO SPECIFY THEIR CHOICE AND TO DATE,
SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. QUICK RESPONSE IS
HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED.
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SUMMARY OF PROPOSED
AMENDMENT TO RIGHTS AND PREFERENCES
OF FIRST CONVERTIBLE PREFERRED STOCK
1. Section 4(e)(i) of the Resolution Establishing Preferences
of First Convertible Preferred Stock shall be amended by adding at the end
thereof the following sentence:
"Notwithstanding anything in this Resolution to the contrary, the
minimum Conversion Price shall be $0.25 per share (the "Minimum Price") and the
maximum Conversion Price shall be $0.75 per share (the "Maximum Price")
provided, however, that if the Corporation shall declare or pay any dividend on
the Common Stock payable in Common Stock or any rights to acquire any Common
Stock, or shall effect a stock split or reverse stock split, or a combination,
consolidation or reclassification of the Common Stock, then the Minimum Price
and the Maximum Price then in effect shall be proportionally decreased or
increased, as appropriate, to give effect to such event."
2. Section 7 of the Resolution Establishing Preferences of
First Convertible Preferred Stock shall be deleted in its entirety in lieu of
the following:
"As long as 800,000 shares of First Preferred are outstanding, the
following shall apply. At any meeting of shareholders of the Corporation, the
holders of the First Preferred voting as a separate class shall be entitled to
elect two members of the Board of Directors of the Corporation, and to remove
any such directors as may be necessary to create vacancies to be filled by the
holders of the First Preferred. Until the first meeting of shareholders,
holders of the majority of the shares of First Preferred shall be entitled to
designate two members of the Board of Directors of the Corporation, and shall
entitled to remove and replace any such designee."
3. Except as altered and amended, all other rights and
preferences of the First Convertible Preferred Stock as originally set forth in
the Resolution Establishing Preferences thereof shall remain in full force and
effect.
Exhibit A
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CASMYN CORP.
1500 WEST GEORGIA STREET, 18TH FLOOR
VANCOUVER, B.C. V6G 2Z6
(604) 601-5200
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Amyn Dahya and Al Karim Haji as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them or either of them to represent and to vote as designated below, all of the
shares of First Convertible Preferred Stock of Casmyn Corp. held of record by
the undersigned on March 17, 1998, at a Special Meeting of holders of First
Convertible Preferred Stock to be held on March 26, 1998, or any adjournment
thereof.
1. AMENDMENT TO ARTICLES OF INCORPORATION TO CHANGE CERTAIN OF THE TERMS OF
THE FIRST CONVERTIBLE PREFERRED STOCK
[ ]FOR [ ]AGAINST [ ] ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED HOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL.
Dated: ____________________, 1998
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Signature
________________________________
Signature if held jointly
Please sign exactly as name appears below. When
shares are held by joint tenants, both should
sign. When signing as attorney, as executor,
administrator, trustee, or guardian, please give
full title as such. If a corporation, please sign
in full corporate name by the President or other
authorized officer. If a partnership, please sign
in partnership name by authorized person
PLEASE READ, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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