UNITED STATES 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 Earliest Event Reported: Jan 12, 2000
HYPERDYNAMICS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 000-25496 87-0400335
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or organization) Identification No.)
2656 South Loop West, Suite 103
Houston, Texas 77054
(Address of principal executive offices, including zip code)
(713) 660-9771
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On January 12, 2000, we sold 2,000 shares of our new issue Series A
Preferred Stock for a total of $2,000,000 in cash to three accredited investors.
As part of this transaction, we also issued to the three investors a total of
200,000 warrants to purchase shares of our common stock at a price of $5.9125
per share which are immediately exercisable and expire on January 6, 2005. In
addition, we issued as part of the placement costs a total of 200,000 warrants
to purchase shares of our common stock at a price of $7.095 per share which are
immediately exercisable and expire on January 6, 2005.
On January 25, 2000, we sold an additional 1,000 shares of our new issue
Series A Preferred Stock for a total of $1,000,000 in cash to one of the same
accredited investors who purchased on January 12, 2000. As part of this
transaction, we also issued to the accredited investor a total of 100,000
warrants to purchase shares of our common stock at a price of $5.9125 per share
which are immediately exercisable and expire on January 6, 2005. In addition,
we issued as part of the placement costs, 100,000 warrants to purchase shares of
our common stock at a price of $7.095 per share which are immediately
exercisable and expire on January 6, 2005.
This was a private placement offering of securities that was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and Rule 506 of Regulation D of the Act. Each certificate issued
for these securities contained a legend stating that the securities have not
been registered under the Act and setting forth the restrictions on the
transferability and the sale of the securities. None of the transactions
involved a public offering. We believe that these investors had the knowledge
and experience in financial and business matters that allowed them to evaluate
the merits and risk of the purchase of these securities. We believe that these
investors were knowledgeable about our operations and financial condition.
The Series A Preferred Stock is convertible into our common stock upon the
earlier of (i) the effective date of a registration statement covering the
shares of common stock underlying Series A Preferred Stock (the "Conversion
Shares"), or (ii) the ninetieth (90th) day after the issuance of each such share
of Series A Preferred Stock(referred to as a "Conversion Date"). Each share of
Series A Preferred Stock outstanding on January 30, 2002 shall be converted
automatically into Common Stock on such date in accordance with the Conversion
Formula and the Conversion Price then in effect.
The Series A Preferred Stock is convertible into our common stock in
accordance with the "Conversion Formula" which is $1,000.00 divided by
"Conversion Price", where:
Conversion Price = Average Price at Closing or the Average Price at Conversion,
whichever is less; and
Average Price at Closing = The five (5)-day average Closing Bid Price for the
Corporation's Common Stock on the trading date immediately before the date such
Series A Preferred Stock was issued; and
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Average Price at Conversion = Eighty percent (80%) of (that is, a 20% discount
to) the five (5)-day average Closing Bid Price for the Corporation's Common
Stock immediately before the Conversion Date.
We will use the proceeds of this private placement for working capital, for
general corporate purposes and for acquisitions.
Item 7. Exhibits
Exhibit 4.1 Certificate of Designation of Series A Preferred Stock
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.
HYPERDYNAMICS CORPORATION
Date: January 24, 2000 By: /s/ Kent Watts
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Kent Watts, President
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Exhibit 4.1
[Time and Date Stamp of
State of Delaware
Secretary of State
Division of Corporations
Filed 09:00 AM 01/12/2000
001018278-2402791]
HYPERDYNAMICS CORPORATION
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CERTIFICATE OF DESIGNATION, NUMBER, POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL, AND OTHER SPECIAL RIGHTS AND THE
QUALIFICATIONS, LIMITATIONS, RESTRICTIONS,
AND OTHER DISTINGUISHING CHARACTERISTICS OF
SERIES A PREFERRED STOCK
The undersigned President and Secretary of this Corporation hereby certify
that the Board of Directors of the Corporation, pursuant to the authority
expressly vested in it has adopted the following resolutions creating a Series A
issue of Preferred Stock:
RESOLVED, that five thousand (5,000) of the twenty million (20,000,000)
authorized shares of Preferred Stock of the Corporation shall be designated
Series A Preferred Stock (the "Series A Preferred Stock") and shall possess the
rights and privileges set forth below:
A. Par Value, Stated Value, Accretion Rate, Purchase Price and
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Certificates.
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1. Each share of Series A Preferred Stock shall have $.001 par value
and a stated value (face amount) of One Thousand Dollars ($1,000.00) (the
"Stated Value").
2. The Series A Preferred Stock shall be offered at a purchase price of
One Thousand Dollars ($1,000.00) per share.
3. Certificates representing the shares of Series A Preferred Stock
purchased shall be issued by the Corporation to the purchasers immediately upon
acceptance of the subscriptions to purchase such shares and receipt by the
Corporation of the purchase price for such shares.
B. Dividends.
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1. Amount and Payment of Dividend. Subject to the limitations
----------------------------------
hereinafter set forth, the holders of Series A Preferred Stock shall be entitled
to receive dividends at the rate of four percent (4%) per annum of the original
issue price thereof of One Thousand and No/100 Dollars ($1,000.00) per share,
and no more, payable only at the time such shares are converted pursuant to
Section D hereof. Such dividends may be paid in cash or in shares of Common
Stock of the Corporation as determined by the Corporation in its sole
discretion; provided, however, no fractional shares of either security may be
issued for dividends, any fractional shares will be rounded to the nearest whole
share, and provided further that if any such dividend is paid in whole or in
part by shares of Common Stock, the number of shares of such security to be
issued as a stock dividend shall be determined by the Market Value (as defined
in Section I below) of a share of Common Stock as of the last day of the period
for such stock dividend. Any shares of Series A Preferred Stock issued after
the date hereof shall accrue dividends from the later of the date of full
payment therefor by the purchaser of such shares or issuance thereof by the
Corporation.
<PAGE>
2. Cumulative Rights. To the extent, if any, that dividends at the rate
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set forth in Section B(1) above shall not be paid or set apart in full for the
Series A Preferred Stock, the aggregate deficiency shall be cumulated and must
be fully paid or set apart for payment before any dividends may be paid upon or
set apart for the Common Stock of the Corporation or before the Corporation may
purchase any of its Common Stock or otherwise make any distribution on account
of its Common Stock or any other class of capital stock now or hereafter
authorized or issued by the Corporation which ranks on a parity with or junior
to the Series A Preferred Stock (other than (i) a dividend payable in Common
Stock, or (ii) by conversion into or exchange for capital stock of the
Corporation ranking junior to the Series A Preferred Stock as to dividends).
3. No Interest on Accrued Dividends. Any accumulations of dividends on
--------------------------------
the Series A Preferred Stock shall not bear interest.
C. Liquidation Preference.
-----------------------
1. In the event of any liquidation, dissolution or winding-up of the
Corporation, either voluntary or involuntary (a "Liquidation"), the holders of
shares of the Series A Preferred Stock then issued and outstanding shall be
entitled to be paid out of the assets of the Corporation available for
distribution to its shareholders, whether from capital, surplus or earnings,
before any payment shall be made to the holders of shares of the Common Stock or
upon any other series of Preferred Stock of the Corporation with a liquidation
preference subordinate to the liquidation preference of the Series A Preferred
Stock, an amount per share equal to the Stated Value. If, upon any Liquidation
of the Corporation, the assets of the Corporation available for distribution to
its shareholders shall be insufficient to pay the holders of shares of the
Series A Preferred Stock and the holders of any other series of Preferred Stock
with a liquidation preference equal to the liquidation preference of the Series
A Preferred Stock the full amounts to which they shall respectively be entitled,
the holders of shares of the Series A Preferred Stock and the holders of any
other series of Preferred Stock with liquidation preference equal to the
liquidation preference of the Series A Preferred Stock shall receive all of the
assets of the Corporation available for distribution and each such holder of
shares of the Series A Preferred Stock and the holders of any other series of
Preferred Stock with a liquidation preference equal to the liquidation
preference of the Series A Preferred Stock shall share ratably in any
distribution in accordance with the amounts due such shareholders. After
payment shall have been made to the holders of shares of the Series A Preferred
Stock of the full amount to which they shall be entitled, as aforesaid, the
holders of shares of the Series A Preferred Stock shall be entitled to no
further distributions thereon and the holders of shares of the Common Stock and
of shares of any other series of stock of the Corporation shall be entitled to
share, according to their respective rights and preferences, in all remaining
assets of the Corporation available for distribution to its shareholders.
2. A merger or consolidation of the Corporation with or into any other
corporation, or a sale, lease, exchange, or transfer of all or any part of the
assets of the Corporation which shall not in fact result in the liquidation (in
whole or in part) of the Corporation and the distribution of its assets to its
shareholders shall not be deemed to be a voluntary or involuntary liquidation
(in whole or in part), dissolution, or winding-up of the Corporation.
<PAGE>
D. Conversion of Series A Preferred Stock.
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The holders of Series A Preferred Stock shall have the following
conversion rights:
1. Right to Convert. When such shares become convertible in accordance
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with Section D(1) hereof, each share of Series A Preferred Stock shall be
convertible at the Conversion Prices set forth below into fully paid and
nonassessable shares of Common Stock (sometimes referred to herein as
"Conversion Shares").
2. Mechanics of Conversion. Each holder of Series A Preferred Stock who
-----------------------
desires to convert the same into shares of Common Stock shall provide notice
("Conversion Notice") via facsimile to the Corporation. The original Conversion
Notice and the certificate or certificates representing the Series A Preferred
Stock for which conversion is elected shall be delivered to the Corporation by
international courier, duly endorsed. The date upon which a Conversion Notice
is received by the Corporation shall be a "Notice Date." Upon receipt by the
Corporation of a facsimile copy of a Conversion Notice, the Corporation shall
immediately send to the holder, via facsimile, a confirmation of receipt of the
Conversion notice which shall specify that the Conversion Notice has been
received and the name and telephone number of a contact person at the
Corporation whom the holder should contact regarding information related to the
conversion. The Corporation shall use all reasonable efforts to issue and
deliver within three (3) business days after the Notice Date, to such holder of
Series A Preferred Stock at the address of the holder on the stock books of the
Corporation, a certificate or certificates for the number of shares of Common
Stock to which the holder shall be entitled as aforesaid; provided that the
original shares of Series A Preferred Stock to be converted are received by the
transfer agent or the Corporation within three (3) business days after the
Notice Date and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such date. If the
original certificate(s) representing the shares of Series A Preferred Stock to
be converted are not received by the transfer agent or the Corporation within
three (3) business days after the Notice Date, the Conversion Notice shall
become null and void.
3. Lost or Stolen Certificates. Upon receipt by the Corporation of
---------------------------
evidence of the loss, destruction, theft or mutilation of any Series A Preferred
Stock certificates (the "Certificates") and (in the case of loss, theft or
destruction) of indemnity or security reasonably satisfactory to the
Corporation, and upon surrender and cancellation of the Certificates, if
mutilated, the Corporation shall execute and deliver new Series A Preferred
Stock Certificates of like tenor and date. However, the Corporation shall not
be obligated to re-issue such lost or stolen Series A Preferred Stock
Certificates if the holder thereof contemporaneously requests the Corporation to
convert such Series A Preferred Stock into Common Stock, in which event the
Corporation shall be entitled to rely on an affidavit of loss, destruction or
theft of the Series A Preferred Stock Certificate or, in the case of mutilation,
tender of the mutilated certificate, and shall issue the Conversion Shares.
4. Conversion Dates. The shares of Series A Preferred Stock shall
-----------------
become convertible into shares of Common Stock upon the earlier of (i) the
effective date of a registration statement covering the Conversion Shares, or
(ii) the ninetieth (90th) day after the issuance of each such share of Series A
Preferred Stock (referred to as a "Conversion Date").
5. Conversion Formula/Conversion Price. Each share of Series A
-----------------------------------
Preferred Stock shall be convertible into the number of shares of Common Stock
in accordance with the following formula (the "Conversion Formula"):
<PAGE>
$1,000.00
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Conversion Price
where,
Conversion Price = Average Price at Closing or the Average Price at
Conversion, whichever is less.
Average Price at Closing = The five (5)-day average Closing Bid Price for
the Corporation's Common Stock on the trading
date immediately before the date such Series A
Preferred Stock was issued.
Average Price at Conversion = Eighty percent (80%) of (that is, a 20% discount
to) the five (5)-day average Closing Bid Price
for the Corporation's Common Stock immediately
before the Conversion Date.
For purposes hereof, the term "Closing Bid Price" shall mean the closing bid
price for the Corporation's Common Stock on the NASD Electronic Bulletin Board,
or if no longer traded thereon, the closing bid price on the principal national
securities exchange on which the Common Stock is so traded.
6. Automatic Conversion. Each share of Series A Preferred Stock
---------------------
outstanding on January 30, 2002 shall be converted automatically into Common
Stock on such date in accordance with the Conversion Formula and the Conversion
Price then in effect, and January 30, 2002 shall be deemed to be the Notice Date
with respect to such conversion.
7. No Fractional Shares. If any conversion of the Series A Preferred
---------------------
Stock would create a fractional share of Common Stock or a right to acquire a
fractional share of Common Stock, such fractional share shall be disregarded and
the number of shares of Common Stock issuable upon conversion, if the aggregate,
shall be the next higher number of shares.
8. Reservation of Stock Issuable Upon Conversion. The Corporation
--------------------------------------------------
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Series A Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
then outstanding shares of the Series A Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series A
Preferred Stock, the Corporation will take such corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose.
9. Adjustment to Conversion Price.
---------------------------------
(a) If, prior to the conversion of all shares of Series A Preferred
Stock, the number of outstanding shares of Common Stock is increased by a stock
split, stock dividend, or other similar event, the Conversion Price shall be
proportionately reduced, or if the number of outstanding shares of Common Stock
is decreased by a combination or reclassification of shares, or other similar
event, the Conversion Price shall be proportionately increased.
<PAGE>
(b) If, prior to the conversion of all shares of Series A Preferred
Stock, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which
shares of Common Stock of the Corporation shall be changed into the same or a
different number of shares of the same or another class or classes of stock or
securities of the Corporation or another entity, then the holders of Series A
Preferred Stock shall thereafter have the right to purchase and receive upon
conversion of shares of Series A Preferred Stock, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion, such shares of stock and/or
securities as may be issued or payable with respect to or in exchange for the
number of shares of Common Stock immediately theretofore purchasable and
receivable upon the conversion of shares of Series A Preferred Stock held by
such holders had such merger, consolidation, exchange of shares,
recapitalization or reorganization not taken place, and in any such case
appropriate provisions shall be made with respect to the rights and interests of
the holders of the Series A Preferred Stock to the end that the provisions
hereof (including, without limitation, provisions for adjustment of the
Conversion Price and of the number of shares issuable upon conversion of the
Series A Preferred Stock) shall thereafter be applicable, as nearly as may be
practicable in relation to any shares of stock or securities thereafter
deliverable upon the exercise hereof. The Corporation shall not effect any
transaction described in this subsection unless the resulting successor or
acquiring entity (if not the Corporation) assumes by written instrument the
obligation to deliver to the holders of the Series A Preferred Stock such shares
of stock and/or securities as, in accordance with the foregoing provisions, the
holders of the Series A Preferred Stock may be entitled to purchase.
(c) If any adjustment under this subsection would create a fractional
share of Common Stock or a right to acquire a fractional share of Common Stock,
such fractional share shall be disregarded and the number of shares of Common
Stock issuable upon conversion shall be the next higher number of shares.
E. Voting. Except as otherwise provided below or by the Delaware
------
General Corporation Law, the holders of the Series A Preferred Stock shall have
no voting power whatsoever, and no holder of Series A Preferred Stock shall vote
or otherwise participate in any proceeding in which actions shall be taken by
the Corporation or the shareholders thereof or be entitled to notification as to
any meeting of the Board of Directors or the shareholders.
Notwithstanding the above, Corporation shall provide holders of the Series
A Preferred Stock ("Holders") with notification of any meeting of the
shareholders regarding any major corporate events affecting the Corporation. In
the event of any taking by the Corporation of a record of its shareholders for
the purpose of determining shareholders who are entitled to receive payment of
any dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire any share of any class or any other securities or property
(including by way of merger, consolidation or reorganization), or to receive any
other right, or for the purpose of determining shareholders who are entitled to
vote in connection with any proposed sale, lease or conveyance of all or
substantially all of the assets of the Corporation, or any proposed liquidation,
dissolution or winding up of the Corporation, the Corporation shall mail a
notice to the Holders, at least ten (10) days prior to the record date specified
therein, of the date on which any such record is to be taken for the purpose of
such dividend, distribution, right or other event, and a brief statement
regarding the amount and character of such dividend, distribution, right or
other event to the extent known at such time.
<PAGE>
To the extent that, under Delaware law, the vote of the Holders, voting
separately as a class, is required to authorize a given action of the
Corporation, the affirmative vote or consent of the Holders of at least a
majority of the shares of the Series A Preferred Stock represented at a duly
held meeting at which a quorum is present or by written consent of a majority of
the shares of Series A Preferred Stock (except as otherwise may be required
under Delaware law) shall constitute the approval of such action by the class.
To the extent that under Delaware law the Holders are entitled to vote on a
matter with holders of Common Stock, voting together as one (1) class, each
share of Series A Preferred Stock shall be entitled to a number of votes equal
to the number of shares of Common Stock into which it is then convertible using
the record date for the taking of such vote of stockholders as the date as of
which the Conversion Price is calculated. The Holders also shall be entitled to
notice of all shareholder meetings or written consents with respect to which
they would be entitled to vote, which notice would be provided pursuant to the
Corporation's by-laws and applicable statutes.
F. Protective Provisions. So long as shares of Series A Preferred
----------------------
Stock are outstanding, the Corporation shall not, without first obtaining the
approval (by vote or written consent, as provided by law) of the Holders of at
least seventy-five percent (75%) of the then outstanding shares of Series A
Preferred Stock:
(a) alter or change the rights, preferences or privileges of the Series
A Preferred Stock so as to affect adversely the Series A Preferred Stock;
(b) create any new class or series of stock or issue any capital stock
senior to or having a preference over or parity with the Series A Preferred
Stock with respect to dividends, payments upon Liquidation (as provided for in
Section B of this Designation) or redemption, or increase the number of
authorized shares of Series A Preferred Stock or change the Stated Value
thereof;
(c) do any act or thing not authorized or contemplated by this
Designation which would result in taxation of the holders of shares of the
Series A Preferred Stock under Section 305 of the Internal Revenue Code of 1986,
as amended (or any comparable provision of the Internal Revenue Code as
hereafter from time to time amended); or
(d) enter into a merger in which the Corporation is not the surviving
corporation; provided, however, that the provisions of this subparagraph (d)
shall not be applicable to any such merger if the authorized capital stock of
the surviving corporation immediately after such merger shall include only
classes or series of stock for which no such consent or vote would have been
required pursuant to this section if such class or series had been authorized by
the Corporation immediately prior to such merger or which have the same rights,
preferences and limitations and authorized amount as a class or series of stock
of the Corporation authorized (with such consent or vote of the Series A
Preferred Stock) prior to such merger and continuing as an authorized class or
series at the time thereof.
G. Status of Converted Stock. In the event any shares of Series A
----------------------------
Preferred Stock shall be converted as contemplated by this Designation, the
shares so converted shall be canceled, shall return to the status of authorized
but unissued Preferred Stock of no designated class or series, and shall not be
issuable by the Corporation as Series A Preferred Stock.
H. Taxes. All shares of Common Stock issued upon conversion of Series A
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Preferred Stock will be validly issued, fully paid and nonassessable. The
Corporation shall pay any and all documentary stamp or similar issue or transfer
taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion of Series A Preferred Stock pursuant hereto. The
Corporation shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the Series A Preferred Stock so
converted were registered, and no such issue or delivery shall be made unless
and until the person requesting such transfer has paid to the Corporation the
amount of any such tax or has established to the satisfaction of the Corporation
that such tax has been paid or that no such tax is payable. The Corporation
shall adjust the amount of dividends paid or accrued so as to indemnify the
holders of Preferred Stock against any withholding or similar tax in respect of
such dividends.
<PAGE>
I. Determination of Market Value of Capital Stock of Corporation. The
--------------------------------------------------------------
determination of the per share "Market Value" of Common Stock as set forth in
previous Sections shall be determined using the previous five day average
closing bid price for the day or, where no sale is made on that day, the average
of the closing bid and asked prices for that day on the NASDAQ Stock Market or
the OTC Bulletin Board if the securities are at the time listed or quoted
thereon, respectively, or, if it is not so listed or quoted, on any other
national securities exchange selected by the Corporation on which it is at the
time listed. If at the applicable time the Common Stock is quoted on the OTC
Bulletin Board, the foregoing calculations shall be based on a Trade and Quote
Summary Report from the OTC Bulletin Board Research Service if available, and if
not, on any other publicly available data reasonably deemed reliable by the
Corporation.
FURTHER RESOLVED, that the statements contained in the foregoing
resolutions creating and designating the said Series A Preferred Stock and
fixing the number, powers, preferences and relative, optional, participating,
and other special rights and the qualifications, limitations, restrictions, and
other distinguishing characteristics thereof shall, upon the effective date of
said series, be deemed to be included in and be a part of the Certificate of
Incorporation of the Corporation pursuant to the provisions the Delaware General
Corporation Law.
Signed on December 30, 1999
HYPERDYNAMICS CORPORATION
By: /s/ Kent Watts
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Title: President
Attest:
By: /s/ Lewis Ball
Title: Secretary
<PAGE>
[CORPORATE SEAL]
THE STATE OF TEXAS '
COUNTY OF HARRIS '
BEFORE ME, the undersigned authority, on this day personally appeared Kent
Watts, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL of office this 30th day of December 1999.
[Notary Seal] /s/ Osmeyda G. Canales
NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
THE STATE OF TEXAS '
COUNTY OF HARRIS '
BEFORE ME, the undersigned authority, on this day personally appeared Lewis
Ball, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL of office this 30th day of December 1999.
[Notary Seal] /s/ R. Pulpan
NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
<PAGE>
