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MarketScreener Homepage  >  Equities  >  Nyse MKT  >  Houston American Energy Corporation    HUSA

HOUSTON AMERICAN ENERGY CORPORATION

(HUSA)
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HOUSTON AMERICAN ENERGY CORP : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Unregistered Sale of Equity Securities, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K)

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09/20/2019 | 04:07pm EDT

Item 1.01. Entry into a Material Definitive Agreement

On September 18, 2019, Houston American Energy Corp. (the "Company") entered into Bridge Loan Agreements (the "Bridge Loan Agreement") with the Company's Chief Executive Officer and principal shareholder pursuant to which the Company issued promissory notes (the "Bridge Loan Notes") in the principal amount of $621,052 and warrants (the "Warrants") to purchase common stock. The aggregate consideration received by the Company for the Bridge Loan Notes and Warrants was $590,000.




Bridge Loan Notes



The Bridge Loan Notes are unsecured obligations bearing interest at 12.0% per annum and payable interest only on the last day of each calendar month with any unpaid principal and accrued interest being payable in full in 120 calendar days.

The Bridge Loan Notes are subject to mandatory prepayment from and to the extent of (i) 100% of net proceeds received by the Company from any sales, for cash, of equity or debt securities (other than Bridge Loan Notes) of the Company, (ii) 100% of net proceeds received by the Company from the sale of assets (other than sales in the ordinary course of business); and (iii) 75% of net proceeds received from the sale of oil and gas produced from the Company's Hockley County, Texas properties. Additionally, the Company has the option to prepay the Bridge Loan Notes, at its sole election, without penalty.



Warrants


The Warrants are exercisable for a period of ten years to purchase shares of common stock at $0.197 per share and subject to standard adjustments to reflect stock splits, reverse stock splits and stock dividends.

Each Warrant evidences a right to purchase two shares of common stock for each dollar of consideration paid for Bridge Loan Notes, or an aggregate of 1,180,000 shares.

The foregoing is qualified in its entirety by reference to the forms of Bridge Loan Agreement, Bridge Loan Note and Warrant filed herewith as Exhibits 10.1, 10.2 and 10.3.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an

           Off-Balance Sheet Arrangement of a Registrant



The information relating to the Bridge Loan Agreement and Bridge Loan Notes included in Item 1.01 of this Form 8-K is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities

See Item 1.01 above regarding the sale of Bridge Loan Notes and Warrants.

Proceeds from the sale of the Bridge Loan Notes will be used to pay for the acquisition of a 20% working interest in 5,871 gross acres in the Northern Shelf of the Permian Basin.

The Bridge Loan Notes and Warrants were offered and sold in a private placement transaction (the "Offering") pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 (the "Securities Act") and Rule 506(b) promulgated thereunder. Each of the investors is an affiliate of the Company and represented that it is an "accredited investor", as defined in Rule 501 promulgated under the Securities Act.

No placement agents, underwriters or finders participated in the Offering and no commissions or similar fees were paid in connection with the Offering.

This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any securities. At the time of their issuance, the Bridge Loan Notes, the Warrants and the shares of Common Stock issuable upon exercise of the Warrants have not been registered under the Securities Act, or any applicable state securities laws and may not be offered or sold in the United States, absent registration or an applicable exemption from such registration requirements.

Pursuant to the Warrant, the Company granted certain "piggyback" registration rights" to the Warrant holders.

Item 7.01. Regulation FD Disclosure.

Houston American Energy Corp. (the "Company") issued a press release on September 20, 2019 announcing financing and completion of the acquisition of additional acreage in the Permian Basin. The press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 7.01.

In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 7.01, including Exhibit 99.1, is furnished pursuant to Item 7.01 and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.




  (c) Exhibits




  10.1   Form of 2019 Bridge Loan Agreement

  10.2   Form of 2019 Bridge Loan Note

  10.3   Form of 2019 Warrant

  99.1   Press release, dated September 20, 2019

© Edgar Online, source Glimpses

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Managers
NameTitle
James A. Schoonover President, Chief Executive Officer & Director
Stephen Hartzell Chairman
R. Keith Grimes Independent Director
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