ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S - Eurogas Inc.(EUGS)
On May 30, 1997, the Company sold 15,000 shares of a newly and specifically
created 1997 Series A Convertible Preferred Stock (the "Preferred") to 17
offshore investors for aggregate gross proceeds of $15,000,000 ($1,000 per
share) and net proceeds of $13,500,000. The newly created Preferred pays a
dividend of 6% per annum and may be converted into that number of common shares
calculated by dividing $1,000 by the lesser of $13.20, or 82% of the average
closing bid price as reported by Bloomberg with respect to the Frankfurt and
Nasdaq Bulletin Board Exchanges for the five trading days preceding the
conversion date and multiplying the result by the number of shares of Preferred
to be converted. If the entire conversion of the Preferred to common were to
occur today, approximately 1,500,000 shares of common stock would be issued.
However, the holders of the Preferred may only convert 25% of the Preferred
to common after July 14, 1997, an additional 25% (50% cumulative) after August
13, 1997, another 25% (75% cumulative) after September 12, 1997, and all the
Preferred after October 12, 1997. All the Preferred must be converted by May
30, 2000.
If the Company undertakes another offering within 90 days which relies on
the exemption from registration pursuant to Regulation S, the holders of the
Preferred may accelerate their conversion of the Preferred to common so that it
all may occur any time after July 14, 1997, and the applicable conversion ratio
will be calculated based on an additional 7% discount. Each of the investors
must take reasonable steps to sell any common shares received on conversion on
the Frankfurt or Berlin Stock Exchange.
The Company paid a commission of $1,500,000 and 50,000 shares of the
Company's restricted common stock in connection with the placement.
The Company relied on the provisions of Rules 901 through 904 promulgated
by the Securities and Exchange Commission under the Securities Act and codified
at 17 CFR Section 230.901-230.904 (Regulation S) as an exemption from the
requirement to register the Preferred and the common stock to be issued upon
conversion and based its reliance primarily upon the facts that all the
purchasers were non-U.S. persons or entities; all purchasers made undertakings
to sell the common stock received on the Frankfurt or Berlin Stock Exchange to
the extent possible; and the Company currently has an extremely active trading
market on the Frankfurt and Berlin Stock Exchange (in excess of 1,500,000 shares
of common stock per week).
The Company used $6,000,000 of the proceeds raised to complete the purchase
of an exploration subsidiary of OMV Group, Austria's largest industrial concern,
which was announced on June 12, 1997.
Corrected Filing to
ARTICLES OF AMENDMENT
EUROGAS, INC.
DESIGNATION OF RIGHTS, PRIVILEGES, AND PREFERENCES
1997 SERIES A CONVERTIBLE PREFERRED STOCK
Pursuant to the provisions of the Utah Revised Business Corporation Act,
section 16-10a-124, of the laws of the state of Utah, the undersigned
corporation hereby adopts the following corrections to the Designation of
Rights, Privileges, and Preferences of 1997 Series A Convertible Preferred Stock
(the "Designation") filed May 29, 1997, a copy of which is attached hereto and
incorporated herein by reference.
FIRST: The name of the Corporation is EuroGas, Inc.
SECOND: This corrective filing is made by the Corporation by reason of the
fact that section 4.03 and section 4.04 of the Resolution did not contain the
complete text as approved. The complete text of the section 4.03 and 4.04 are
as follows:
4.03 The holder is entitled, at its option, to convert 25% of the
shares of 1997 Series A Convertible Preferred Stock into shares of Common
Stock 45 days after the issuance of the shares of 1997 Series A Convertible
Preferred Stock. The holder is entitled, at its option, to convert an
additional 25% (50% cumulatively) of the shares 75 days after the issuance
of the shares of 1997 Series A Convertible Preferred Stock, an additional
25% (75% cumulatively) 105 days after the issuance of the shares of 1997
Series A Convertible Preferred Stock, and an additional 25% (100%
cumulatively) 135 days after the issuance of the shares of 1997 Series A
Convertible Preferred Stock. In the event the Corporation raises
additional funds through a Regulation S offering, the above conversion
periods shall change so that all shares of 1997 Series A Convertible
Preferred Stock may be converted after 45 days.
4.04 The number of shares of the Corporation's Common Stock issuable
upon conversion of each share of the 1997 Series A Convertible Preferred
shall equal the $1,000 plus the amount of any accrued but unpaid dividends
through the "Conversion Date" as defined below, divided by the lesser of
(i) 125% of the average closing bid price, as reported by Bloomberg with
respect to the Frankfurt and the Nasdaq Bulletin Board exchanges, for the
five trading days preceding the issuance of the 1997 Series A Convertible
Preferred Stock; or (ii) 82% of the average closing bid price, as reported
by Bloomberg with respect to the Frankfurt and Nasdaq Bulletin Board
exchanges, for the five trading days preceding the Conversion Date. Any
necessary currency conversion shall be at the rate reported by Bloomberg at
4:00 p.m. New York, New York, time each day. In the event the Corporation
raises additional funds through a Regulation S offering, 82% shall become
75%. |
