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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4 )*
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COTTON VALLEY RESOURCES CORPORTAION
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(NAME OF ISSUER)
Common Stock
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(TITLE OF CLASS OF SECURITIES)
221905-10-2
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(CUSIP NUMBER)
John M. Liviakis, 2420 "K" St., Suite 220, Sacramento, CA 95816, (916) 448-6084
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
December 3, 1997
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
CUSIP No. 221905-10-2 PAGE 2 OF 7 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Liviakis Financial Communications, Inc.
68-0311399
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00, AF, WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of California
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7 SOLE VOTING POWER
2,966,851
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,966,851
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
None
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,966,851
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.3 %
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
CUSIP No. 221905-10-2 PAGE 3 OF 7 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert B. Prag
###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
250,000
NUMBER OF ----------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 250,000
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
250,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.5%
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14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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Page 4 of 7
3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to a Consulting Agreement (the "Consulting Agreement")
effective as of November 7, 1996 by and between the Corporation and Liviakis
Financial Communications, Inc. ("LFC"), the Corporation agreed to issue to LFC
an aggregate of 1,490,000 shares of the Corporation's Common Stock ("Common
Stock"), all of which have been issued.
The Consulting Agreement also (i) granted LFC the right, which LFC
has exercised in its entirety, to purchase 375,000 units ("Units"), each
consisting of one share of Common Stock and one stock purchase warrant (a
"Warrant"), entitling the holder thereof to acquire one share of Common Stock at
an exercise price of One Dollar and Ten Cents Canadian (CDN$1.10) during the
period commencing on January 2, 1998 and terminating on November 7, 2001, and
(ii) granted Robert B. Prag ("RBP") the right, which RBP has exercised in its
entirety, to purchase 125,000 Units.
Under the Consulting Agreement, LFC has performed certain investor
communications, financial and investor public relations, corporate finance and
related services for the Corporation. Copies of the Consulting Agreement and the
form of certificate representing the Warrants are attached to Schedule 13D, as
amended, as Exhibits "1" and "2", respectively.
Through the filing of Amendment No. 3 to the Schedule 13D, LFC had
purchased 505,500 shares of Common Stock in open market transactions. Since that
filing, LFC has not purchased any additional shares of Common Stock in open
market transactions.
On June 30, 1997, LFC advanced to the Corporation $579,000 pursuant
to a 9% Convertible Secured Promissory Note (the "Note") dated June 24, 1997.
Amounts outstanding under the Note were originally due on October 24, 1997,
which maturity date the Corporation extended pursuant to the terms of the Note
to November 24, 1997. The outstanding principal amount of the Note together with
accrued but unpaid interest were convertible by LFC into shares of Common Stock
at a conversion price of $1.6667 per share. On or about December 3, 1997, the
Corporation repaid $479,000 of the principal amount of the Note and paid all
interest accrued on the Note, and LFC converted $100,000 principal amount of the
Note into 60,000 shares of Common Stock. A copy of the Note is attached to
Schedule 13D, as amended, as Exhibit "4".
In connection with the loan represented by the Note, the Corporation
issued to LFC warrants (the "Loan Warrants") expiring April 30, 2002 to purchase
161,351 shares of Common Stock at an exercise price of $2.08 per share. A copy
of the certificate representing the Loan Warrants is attached to Schedule 13D,
as amended, as Exhibit "5".
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This Amended Schedule 13D is being filed to report 2,430,500 shares
of Common Stock owned by LFC, 375,000 shares of Common Stock which LFC has the
right to acquire within the next sixty days through exercise of the Warrants,
161,351 shares of Common Stock which LFC has the right to acquire within the
next sixty days through exercise of the Loan Warrants, 125,000 shares of Common
Stock owned by RBP, and 125,000 shares of Common Stock which RBP has the right
to acquire within the next sixty days through the exercise of the Warrants.
Of the 2,430,500 shares of Common Stock owned by LFC, 1,490,000 were
received in consideration of services rendered, and 60,000 were received upon
conversion of $100,000 principal amount of the Note. LFC acquired 375,000 shares
of Common Stock through the purchase of 375,000 Units at a cost of $281,250. LFC
also acquired an aggregate of 505,500 shares of Common Stock through open market
purchases in the over-the-counter market for aggregate consideration of
$925,911, or an average of $1.83 per share. The source of funds LFC used in
purchasing Units and making open market purchases of 135,000 shares of Common
Stock for aggregate consideration of $253,275 was advances by John M. Liviakis
to LFC on an open account basis, payable on demand. The source of funds for the
balance of the open market purchases, as well as the loan to the Corporation
represented by the Note, was LFC's working capital, including working capital
acquired through margin loans provided by Everen Securities, Inc. In the event
LFC acquires additional shares of Common Stock through the exercise of Warrants
or the Loan Warrants, it would anticipate utilizing its working capital as its
source of funds.
The 125,000 shares of Common Stock owned by RBP were acquired
through the purchase of 125,000 Units at a cost of $93,750. The source of funds
RBP used in purchasing Units was RBP's personal funds. In the event RBP acquires
additional shares of Common Stock through the exercise of Warrants, he would
anticipate utilizing personal funds as his source of funds.
5. INTEREST IN SECURITIES OF THE ISSUER.
LFC has the sole power to direct the vote or disposition of the
2,430,500 shares of Common Stock owned by LFC and expects to have the sole power
to direct the vote or disposition of such of the 536,351 shares of Common Stock
which LFC has the right to acquire within the next sixty days as LFC in fact
acquires. Such power is exercised through LFC's directors and officers.
RBP has the sole power to direct the vote or disposition of the
125,000 shares of Common Stock owned by RBP and expects to have the sole power
to direct the vote or disposition of such of the 125,000 shares of Common Stock
which RBP has the right to acquire within the next sixty days as RBP in fact
acquires.
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Page 6 of 7
The 2,966,851 shares of Common Stock that LFC owns or has the right
to acquire within sixty days of the date hereof, and as to which LFC has or
would have the sole power to direct the vote or disposition, represent
approximately 17.3% of that class of securities. The 250,000 shares of Common
Stock that RBP owns or has the right to acquire within sixty days of the date
hereof, and as to which RBP has or would have the sole power to direct the vote
or disposition, represent approximately 1.5% of that class of securities. The
3,216,851 shares of Common Stock which LFC and RBP in the aggregate own or have
the right to acquire within sixty days of the date hereof, and as to which LFC
or RBP has or would have the sole power to direct the vote or disposition,
represent approximately 18.7% of that class of securities. In each case, the
calculation of the percentage of the class of Common Stock is based on the
16,511,367 shares of Common Stock which the Corporation reported in its
Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
1997 as being outstanding as of September 30, 1997.
LFC disclaims any beneficial interest in any shares of Common Stock
owned by RBP or which RBP has the right to acquire. RBP disclaims any beneficial
interest in any shares of Common Stock owned by LFC or which LFC has the right
to acquire, except for such beneficial interest as may be associated with his
service as an officer and director of LFC.
During the past sixty days, neither LFC nor RBP has engaged in any
transactions in Common Stock, except as reported herein.
6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The Corporation has issued shares of Common Stock to LFC in
consideration for consulting services performed by LFC pursuant to the
Consulting Agreement. The Corporation has also sold Units to LFC and RBP
pursuant to the Consulting Agreement. In the Consulting Agreement and in the
certificates representing the Warrants and the Loan Warrants, the Corporation
grants to LFC and RBP certain rights to have shares of Common Stock registered
under the Securities Act of 1933, as amended. Pursuant to the Note, the
Corporation was obligated to repay, with interest, amounts advanced by LFC, and
LFC was entitled to convert amounts owing under the Note into shares of Common
Stock.
In connection with the agreement of LFC to continue to provide
investor relations and financial consulting services to the Corporation after
the termination of the Consulting Agreement in accordance with its terms,
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Page 7 of 7
the Corporation agreed to issue to LFC stock purchase warrants expiring
December 31, 2000 entitling LFC to purchase up to 100,000 shares of Common
Stock at an exercise price of $3.50 per share (the "Acquisition Warrants")
in connection with each acquisition the Corporation completes while LFC
continues to provide such services to the Corporation pursuant to the
arrangements currently in effect. The parties have not yet specified the form
of certificate that would represent the Acquisition Warrants.
Except for the Consulting Agreement, the Note, the Loan Warrants,
the Warrants and the understanding of the Corporation and LFC regarding the
Acquisition Warrants, there are no contracts, arrangements, understandings or
relationships between any of the persons named in Item 2 of the Schedule 13D
and any other person with respect to any securities of the Corporation.
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: December 15, 1997
LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
By:/s/John M. Liviakis
------------------------------------
John M. Liviakis, President
/s/Robert B. Prag
---------------------------------------
Robert B. Prag
