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
July 15, 1999
Date of Report (Date of earliest event reported)
GULFWEST OIL COMPANY
(Exact name of registrant as specified in its charter)
Texas
(State or other jurisdiction of incorporation)
33-13760-LA 87-0444770
(Commission File Number) (IRS Employer Identification Number)
397 N. Sam Houston Parkway East, Suite 375, Houston, Texas 77060
(Address of principal executive offices)
Registrant's telephone number, including area code: (281) 820-1919
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On July 15, 1999, GulfWest Oil Company ("GulfWest" or the "Company") sold
four million (4,000,0000) shares of the Company's Class A Common Stock (the
"Common Stock") to J. Virgil Waggoner, a director and significant shareholder of
the Company, in a private offering at $.75 per share (the "Offering Price") for
a total price of $3,000,000, to be paid in cash from personal funds. The Company
will use the proceeds for additional acquisitions and development of oil and
natural gas reserves owned by the Company, and for working capital.
As a result of and giving effect to the transactions described below, at
July 15, 1999, Mr. Waggoner beneficially owned and had sole voting and
dispositive power for 8,983,884 shares, representing 78.2% of the Company's
Common Stock, which included 4,250,000 shares issuable subject to the conversion
of presently convertible preferred stock and 20,000 shares issuable subject to
the exercise of presently exersicable options.
Prior to July 15, 1999, Mr. Waggoner beneficially owned and had sole voting
and dispositive power for 1,583,884 shares, representing 38.8% of the shares of
the Company's Common Stock, which included 870,000 shares subject to presently
exercisable options.
Mr. Waggoner has been a director of the Company since December 1, 1997. In
December 1996, he agreed to personally guarantee the Company's revolving
line-of-credit with a financial institution for $2,000,000, which was increased
to $2,750,000 in 1997 and to $3,000,000 in 1998. On December 15, 1997, he
granted a loan to the Company in the amount of $1,000,000, bearing interest at
the floating Prime Rate, which was 8.5% at the time of the loan. The $1,000,000
principal amount of the loan was converted to 615,384 shares of Common Stock in
a private offering on June 29, 1998 at a rate of $1.625 per share of Common
Stock.
In two transactions on December 28, 1998 and May 28, 1999, Mr. Waggoner
converted $1,915,000 and $635,000, respectively, in outstanding principal and
interest of loans previously made to the Company to shares of the Company's
Series BB Convertible Preferred Stock, par value $.01 and liquidation value $500
per share (the "Series BB Preferred Stock"). Mr. Waggoner is the sole
shareholder of the Series BB Preferred Stock. The Series BB Preferred Stock was
convertible to Common Stock, subject to shareholder approval, one (1) year from
the date of issue at a conversion rate of $.60 per share of Common Stock. On
July 15, 1999, the Company agreed to amend the terms of the Series BB Preferred
Stock to make it convertible at anytime, at the option of the holder. The market
closing price of the Common Stock on December 28, 1998 and May 28, 1999 was $.60
and $.375 per share, respectively.
As part of the line of credit guaranty and loan transactions discussed
above, the Company had granted Mr. Waggoner a series of options (the "Options")
to purchase an aggregate of 850,000 shares of Common Stock with an exercise date
of July 1, 1999 and an exercise price of $1.25 per share of Common Stock. On
July 15, 1999, Mr. Waggoner and the Company mutually agreed to irrevocably void
the Options retroactively to the dates of issue.
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At July 15, 1999, the Company had obtained agreements with twenty-four (24)
stockholders of the Company's 9% Cumulative Convertible Class AAA Preferred
Stock, par value $.01 and liquidation value $500 per share (the "Class AAA
Preferred Stock") to convert their Class AAA Preferred Stock, valued at an
aggregate of $1,612,500, plus accrued dividends of $290,250, to Common Stock at
a conversion rate of $.90 per share of Common Stock, which is 120% of the
Offering Price. Upon the conversion, the Company will issue an aggregate of
2,114,166 shares of Common Stock to these holders, which will result in a
reduction of Mr. Waggoner's beneficial ownership from 78.2% to 66.1% of the
Company's Common Stock.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
c) Exhibits
21.1 Security Ownership of Certain Beneficial
Owners and Management filed herewith.
21.2 Form of Letter of Agreement with Class AAA
Preferred Stockholders, dated July 7, 1999,
filed herewith.
21.3 Press release issued by the Company on July 12,
1999 announcing the sale of $3,000,000 of Common
Stock to Mr. J. Virgil Waggoner, a director and
significant shareholder, and the agreement with
the Class AAA Preferred Stockholders to convert
their preferred stock to Common Stock, filed
herewith.
SIGNATURE
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.
GULFWEST OIL COMPANY
Date: July 23, 1999 By:/s/ Jim C. Bigham
Jim C. Bigham
Executive Vice President\Secretary
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<TABLE>
<CAPTION>
Exhibit 21.1
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of July 15, 1999, regarding
the beneficial ownership of Common Stock by each person known by the Company to
own beneficially 5% or more of the outstanding Common Stock, each director of
the Company, certain named executive officers, and the directors and executive
officers of the Company as a group. The persons named in the table have sole
voting and investment power with respect to all shares of Common Stock owned by
them, unless otherwise noted.
<S> <C> <C> <C>
Name and Address of
Beneficial Owner Amount and
Nature of
Beneficial
Ownership (Note) Percent
John E. Loehr 492,159 1,2 6.4%
Marshall A. Smith III 333,520 2,3 4.4%
Thomas R. Kaetzer 116,000 2,4 1.6%
Jim C. Bigham 160,935 2,5 2.2%
Richard L. Creel 35,000 2,6 *
Henri M. Nevels 31,430 2,7 *
Anthony P. Towell 365,683 2,8 4.8%
J. Virgil Waggoner 8,983,884 2,9 78.2%
All current directors and
officers as a group (8 persons) 10,519,611 10 82.3%
Anaconda Opportunity Fund 604,444 11 7.7%
Carlin Equities Corporation 377,777 12 5.0%
Renier Nevels 390,000 13 5.1%
* Less than 1%
</TABLE>
<PAGE>
1 Includes 322,159 shares subject to presently exercisable warrants
and options and 20,494 shares held directly; 6,000 shares subject
to presently exercisable warrants, 76,923 shares issuable upon
conversion of a debenture, 39,333 shares issuable upon conversion of
presently convertible Preferred Stock, and 25,250 shares held by ST
Advisory Corporation; and 2,000 shares held by his Mr. Loehr's
daughter's trust, the Joanna Drake Loehr Trust. Mr. Loehr is
president and sole shareholder of ST Advisory Corporation.
2 Shareholder's address is 397 N. Sam Houston Parkway East, Suite 375,
Houston, Texas 77060.
3 Includes 16,000 shares subject to warrants exercisable at 09/01/99.
4 Includes 290,000 shares subject to presently exercisable warrants
and options and 40,104 shares owned directly, 83 shares owned by
Joyce Smith, the wife of Mr. Smith, and 3,333 shares owned by
Marshall A. Smith IV and Mark Shelton, sons of Mr. Smith. Mr. Smith
disclaims beneficial ownership of the shares and warrants owned by
Senior Drilling Company, which is controlled by Mitchell D. Smith, the
brother of Mr. Smith.
5 Includes 120,000 shares subject to presently exercisable warrants and
options, and 40,935 shares held directly, and 1,000 shares held by
Jeff G. Gray, son of Mr. Bigham.
6 Includes 30,000 subject to presently exercisable options.
7 Includes 31,430 shares subject to presently exercisable warrants and
options. Mr. Nevels disclaims beneficial ownership of the shares and
warrants owned by his father, Renier Nevels.
8 Includes 262,222 shares issuable upon conversion of presently
convertible Preferred Stock, 60,000 shares subject to presently
exercisable warrants and options, and 38,461 shares issuable upon
conversion of a debenture.
9 Includes 4,250,000 shares subject to presently convertible Preferred
Stock and 20,000 shares subject to presently exercisable options.
10 Includes 5,562,528 shares subject to presently exercisable warrants,
options and convertible securities.
11 Includes 524,444 shares issuable upon conversion of presently
convertible preferred stock and 80,000 shares subject to presently
exercisable warrants. Shareholder's address is c/o Anaconda Capital,
730 Fifth Avenue, 15th Floor, New York, New York 10019.
12 Includes 327,777 shares issuable upon conversion of presently
convertible preferred stock and 50,000 shares subject to presently
exercisable warrants. Shareholder's address is 250 Park Avenue, 12th
Floor, New York, New York 10017.
13 Includes 195,000 shares issuable upon conversion of presently
convertible preferred stock at a price per share of Common Stock of
$5.00, and 405,000 shares subject to presently exercisable warrants.
Shareholder's address is P. O. Box 1, 3680 Maaseik, Belgium.
<PAGE>
Exhibit 21.2
Form of Letter of Agreement
with Class AAA Preferred Stockholder
(GulfWest Oil Company Letterhead)
July 7, 1999
(Class AAA Preferred Stockholder)
Dear Stockholder,
This letter is to obtain your agreement to amend Section 7 of the
Certificate of the Designation, Preferences, Rights and Limitations of the Class
AAA Preferred Stock of GulfWest Oil Company (the "Amendment"). The conversion
price will change from the lesser of $3.50 per share or 70% of the average
closing bid price of the Company's Common Stock to a set price equal to 120% of
the sales price per share of GulfWest's $3 million private offering of Common
Stock (the "Offering"). The conversion of the Preferred Stock and unpaid
dividends to Common Stock at the set price will occur simultaneously with the
closing of the Offering. The Amendment will be predicated upon the successful
close of the Offering.
If you agree to the Amendment, please acknowledge below and fax the
executed copy to me at (713) 974-0617. I greatly appreciate your cooperation in
this matter.
Sincerely,
\s\ Marshall A. Smith
Marshall A. Smith, CEO
Signed:\s\ (Class AAA Preferred Stockholder)
<PAGE>
Exhibit 21.3
Press Release Issued by the Company
FOR IMMEDIATE RELEASE Contact: Thomas R. Kaetzer, President, GulfWest Oil
Company, 397 N. Sam Houston Prkwy. East, Suite 375, Houston,Texas 77060
(281-820-1919)
GULFWEST SELLS $3 MILLION OF EQUITY
Proceeds to be Used for Acquisition and Development of
Company's Oil and Natural Gas Reserves
HOUSTON, TEXAS, July 12, 1999 - GulfWest Oil Company (OTC: GULF Boston
Stock Exchange: GFW), announced today it has sold $3,000,000 of Common Stock to
a director at $.75 per share to be used for additional acquisitions and
development of oil and natural gas reserves owned by the Company.
"In the near term, this allows us to continue our immediate workover
program, increasing production and cashflow, and taking advantage of the higher
prices. For the longer term, this is further evidence of the continued
commitment of the Board of Directors and management to support the Company and
fund additional development and acquisitions", explained Thomas R. Kaetzer,
president.
The Company also announced today that it has reached agreement with holders
of the Company's 9% Cumulative Convertible Class AAA Preferred Stock to convert
all of their stock and accrued dividends to Common Stock at $.90 per share.
"The conversion of the Class AAA Preferred Stock is an important step
toward the recapitalization of GulfWest, as this transaction eliminates any
Preferred Stock with conversion to Common Stock at a discount to the market
price of the Common Stock," stated Mr.Anthony Towell, chairman.
*************
The matters discussed herein may contain "forward-looking" statements that
involve risks and uncertainties including, without limitation, competitive
factors in the marketplace.
