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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
May 15, 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)
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ITEM 5. OTHER EVENTS
Casmyn Corp. (the "Company") has received sufficient votes from
holders of the Company's Convertible Preferred Stock to approve the
restructuring proposal announced on May 5, 1998 which would establish a fixed
conversion price of $0.04 per Common Share, grant the Preferred Holders voting
rights on an as converted basis subject to approval by the Company's Common
Shareholders and permit the Company to redeem the Preferred Stock at specified
prices. The proposal contemplated that two of the present members of the Board
of Directors would resign upon approval by the Preferred Holders and the
remaining two board members would elect three persons designated by the
Preferred Shareholders as new directors. The Company has not yet received
documentation from the Preferred Holders as to their designees. The fixed
conversion price will remain in effect only if the holders of the Common Stock
approve the change in voting rights and a reverse stock split.
The Company also received a letter from NASDAQ stating that the
Company's Common Stock will be delisted from the NASDAQ SmallCap Market
effective with the close of business on May 25, 1998. The delisting letter
referred to the prior issuances of Common Stock pursuant to the conversion of
the Preferred Stock and the potential issuances pursuant to the restructuring
which NASDAQ alleged to be excessive. The letter further referred to the
restructuring of the Preferred Stock and change in the Board of Directors as
allegedly being in violation of the voting rights policy of NASDAQ. The letter
also pointed to the Company's lack of compliance with the requirements to
maintain a $1.00 minimum bid price and the Company's failure to maintain a
minimum of two active market makers. The Company has appealed the delisting and
may seek further procedural remedies. In the event that the Company is not
successful in maintaining its listing on the NASDAQ SmallCap Market, under the
terms of the Preferred Stock Investment Agreements with the various holders of
the Preferred Stock, the Company would be subject to a obligation to pay 3% of
the purchase price of the shares held by an investor during any 30 day period in
excess of 30 days that such shares are not listed on NASDAQ or a national
exchange. If the Company's Common Shares are delisted, the Company will seek to
obtain a waiver of such obligation from the Preferred Shareholders, although no
assurance can be given that the Company will be able to obtain such waiver.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) The following exhibit is filed herewith:
99.1 Letter dated May 15, 1998 from the NASDAQ Stock Market, Inc.
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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: May 21, 1998
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EXHIBIT 99.1
NASDAQ
The Nasdaq StockMarket, Inc.
1735 K Street NW
Washington, DC 20006-1500
202-496-2500
Fax 202-496-2698
May 15, 1998
Mr. Amyn Dahya
President and Chief Executive Officer
Casym Corp.
1335 Greg Street
Suite 104
Sparks, NV 89431
Dear Mr. Dahya:
The Staff is in receipt of Casmyn Corporation's (the "Company") correspondence,
dated April 30, 1998 and correspondence dated April 24 and May 4, 1998 from
David Ficksman, Outside General Counsel, regarding the Company's efforts to
restructure the terms of the First Convertible Preferred Stock ("Preferred
Stock"). The Staff has also reviewed the Company's correspondence, dated
February 5, 11, 12 and 16, 1998 in response to Staff's inquiries regarding a
press release issued by the Company on January 29, 1998, announcing the
suspension of the prospectus covering the resale of the Common shares underlying
the Company's Preferred Stock.
Based on its review of the above information, the Staff believes that the prior
issuances of Common Stock, which occurred upon the conversion of the Preferred
Stock shares, and the potential issuances, pursuant to the proposed
restructuring terms of the Preferred Stock, are excessive in nature; and thus,
raises significant public interest concerns, as set forth under Marketplace
Rules 4300 and 4330. A review of the information submitted by the Company's
total number of Common shares outstanding increased from 13,376,714 to
137,571,608 or 928%. A majority of these Common Stock issuances were a direct
result of conversions of the Preferred Stock by shareholders. The Company
represents that the conversion of the Preferred Stock at the proposed fixed
conversion rate of $0.04 will cause the potential issuance of an additional
691,880,886 Common shares./1/ This
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/1/ Fasmile from Debbie Barforth-Wood, Casmyn Corp., to Kit Milholland/Ayanna
Ifill, Nasdaq Stock Market, dated April 30, 1998. Common Stock issued and
outstanding, as of April 30, 1998, was 137,571,808.
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issuance will increase the total Common shares outstanding, as stated on April
30, 1998, by approximately 502%. The total number of Common shares outstanding
after the conversion will be approximately 829,452,494. Again, the Staff
believes these potential issuances of Common Stock to be excessive in nature.
The Staff is concerned that the prior substantial issuances have serious
deflated the book value of the common Stock, and that the potential issuance of
approximately 600 million additional Common shares will further depress the
value of the investment of the Common shareholders.
The Staff notes that the Company's Common Stock was halted from trading on The
Nasdaq SmallCap Market from January 30, 1998 until February 13, 1998, pending
the Staff's receipt and review of additional information regarding the
suspension of the Preferred Stock prospectus. The Company indicated that it was
engaged in discussions with the Preferred Stockholders with respect to
restructuring the current terms or replacing the existing Preferred Stock
instrument. The Company represented that the existing prospectus contained
specific information on terms of the Preferred Stock instrument, which could be
materially changed as a result of its recent restructuring discussions.
The Company is proposing the following amendments to the prospectus during a
Special Meeting of the Preferred Stockholders on May 18, 1998:
. Establishment of a fixed conversion rate of $0.04 for all conversion
notices received after the proposal becomes effective. The fixed
conversion price will remain in effect only if within 60 days the
holders of the Common Stock approve the changes for the voting rights
of the Preferred Stockholders and approve a 50:1 reverse stock split
of the Common Stock.
. Subject to approval by the holders of the Company's Common Stock, the
proposal would allow the Preferred Stockholders to have voting rights
consistent with the number of Common shares into which the Preferred
Stock is convertible.
. Permit the Company, at its option, to redeem the Preferred Stock, in
whole or in part, at the following redemption price, plus, in each
case, accrued and unpaid dividends, if redeemed during the twelve
months beginning June 1st, 1998 - $25.00; 1999 - $32.50; 2000 -
$35.00; and 2001 - $40.00 per share thereafter.
If the Preferred Amendment is approved at the Special Meeting, two of the
present members of the Board of Directors will concurrently resign, and the
two remaining members will elect three persons designated by the Preferred
Stockholders as directors of the Company, so that a majority of the Board
will resign if the Common shareholders fail to approve a reserve split of
the Common and the voting rights changes, as stated above.
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The Staff has found that the proposed restructuring of the Preferred Stock and
the Board to be in violation of the voting rights policy of The Nasdaq Stock
Market, as set forth under Marketplace Rule 4310(c)(21). The proposed
restructuring would fundamentally change the existing voting structure of the
company. prior tot he proposed restructuring of the Preferred Stock, the
holders of these shares had no voting rights and were not provided with
designated Board seats. In effect, the restructuring proposal provides the
Preferred shareholders with three designated persons on a five person Board, or
a majority of the board. The restructuring proposal states that the Preferred
shareholders would be granted voting rights consistent with the number of common
shares issuable upon conversion of the Preferred Stock. Using the April 30,
1998 data supplied by the Company/2/, there would be approximately 829,452,494
shares held by Common and Preferred shareholders on a fully diluted basis. Of
these shares, the Preferred shareholders would hold approximately 691,880,886,
or 83% of the total voting power.
Staff believes that the resulting actions would seriously disenfranchise the
existing Common stockholders. These proposed corporate actions, in effect,
would remove control of the company from the Common shareholders to the
Preferred Stockholders. Further, the proposed changes in the Preferred Stock
fundamentally alter the existing voting structure of the Company, and such
actions disenfranchise the current Common shareholders. The Staff is aware that
the Company plans to submit these proposed changes to the Common stockholders
for approval at a subsequent shareholders meeting. However, the ratification of
such actions by the existing Common shareholders would not ameliorate the voting
rights violation.
Presently, the Company is not in compliance with the requirements for continued
listing on The Nasdaq SmallCap Market. Pursuant to Marketplace Rule 4310[c][4],
the Company has not been able to maintain the $1.00 minimum bid price since
January 14, 1998. The Company was formally notified of this deficiency on April
1, 1998 and was given an additional 90 days, ending July 1, 1998, to regain
compliance. In addition, pursuant to Marketplace Rule 4310[c][1], the Company
has failed to maintain a minimum of two active market markers/3/ since April 14,
1998. The Company was notified of this deficiency on April 23, 1998 and was
given an additional 30 days, ending May 26, 1998, to regain compliance.
Currently, the Company has no registered market markers representing the
security on the Pink Sheets and is quoted at 1/32. While technically the
Company retains its Nasdaq listing, all trading in the Company's stock since
April 14, 1998, has been conducted, in effect, through the Pink Sheets.
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/2/ Ibid.
/3/ An active market maker is one who is registered to trade a security and
maintains a continuous, two-sided quotation.
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The Staff is mindful that the Nasdaq Stock Market is entrusted with the
authority to preserve and strengthen the quality and public confidence in the
stocks listed on our market and preserve the integrity of the Common
shareholders, who trade on The Nasdaq Stock Market. Therefore, pursuant to
Marketplace Rules 4300, 4310(c)(21) and 4330, the Company's securities will be
delisted from The Nasdaq SmallCap Market, effective with the close of business
on May 25, 1998.
The Company may seek further procedural remedies. For information regarding a
review of the Staff's findings, please contact the Hearings Department at (202)
496-2635. As previously noted, the Company is presently under grace periods for
bid price and market maker deficiencies. The Staff is also aware that the
Company has ben corresponding with the Nasdaq Listing Investigations Department
regarding additional Staff concerns. The Staff reserves the right to cite
additional deficiencies and/or raise new issues for consideration, as warranted.
If you have any question, please contact your Listing Analyst, Ms. Ayanna Ifill,
at (202) 496-2654 or me at (202) 496-2569.
Sincerely,
Kit Milholland
Assistant Director
Nasdaq Listing Qualifications
cc: David Ficksman, Outside General Counsel, Loeb & Loeb
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