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 Report (Date of earliest event reported) April 3, 1998
CHAPARRAL RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
Colorado 0-7261 84-0630863
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
2211 Norfolk, Suite 1150, Houston, Texas 77098
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 807-7100
Item 5. OTHER EVENTS.
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On April 3, 1998, the Company executed a Subscription Agreement
("Agreement") with an investor which was not affiliated with the Company.
Pursuant to the Agreement, the Company agreed to sell to the investor 1,250,000
shares of the Company's common stock for a purchase price of $2.00 per share or
an aggregate purchase price of Two Million Five Hundred Thousand Dollars
($2,500,000). The Company agreed to register the 1,250,000 shares for resale.
Also, the Company agreed that, if at any time by March 31, 1999, the
Company issues additional shares of the Company's common stock at a price of
less than $2.00 per share, the investor will receive an additional number of
shares of common stock which when added to the 1,250,000 shares divided by
$2,500,000 is equal to the price at which the additional shares are sold.
Excluded from the adjustment provisions are all shares of common stock,
including the shares of common stock issuable upon exercise of options or
warrants, issued to management, directors or employees of, or consultants to,
the Company or any subsidiary thereof, shares of common stock issuable upon
exercise of convertible securities, shares of common stock or options or
warrants to acquire common stock issued in connection with investment banking,
financial advisory or legal services provided to the Company and shares of
common stock issued as a dividend or other distribution on any class of stock.
Further, the Company agreed that if, by March 31, 1999, the Company issues or
sells convertible securities (i.e., securities directly or indirectly
convertible into or exchangeable for common stock), other than as a dividend or
other distribution on any class of stock, the investor is entitled to exchange
the 1,250,000 shares for the convertible securities. The amount of convertible
securities to be issued to the investor is to be determined by dividing the
market price of the common stock into the issue price of such convertible
securities. Finally, the Company agreed that, in the event that by March 31,
1999 (i) the Company has not received an investment of $7,500,000 and (ii) the
average market price of the common stock for the twenty day trading period
preceding March 31, 1999, is less than $2.00 per share, then the investor is
entitled to an additional number of shares of common stock which when added to
the 1,250,000 shares and divided by $2,500,000 is equal to the market price of
the common stock on March 31, 1999. This provision is inapplicable if either of
the provisions are satisfied on or before March 31, 1999.
Allen & Company Incorporated acted as placement agent in connection with
the sale of the 1,250,000 shares of common stock. As a result, of the warrants
to purchase 700,000 shares of the Company's common stock held by Allen & Company
Incorporated that were unexercisable, warrants to purchase 100,000 shares of the
Company's common stock have now become exercisable at an exercise price of $0.01
per share and will expire on November 25, 2002.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) Exhibits.
Exhibit 10.1 Subscription Agreement dated April 1, 1998, by and between
Chaparral Resources, Inc. and Network Fund III, Ltd.
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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.
Date: April 13, 1998
CHAPARRAL RESOURCES, INC.
By: /s/ Howard Karren
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Howard Karren, President
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EXHIBIT INDEX
Exhibit 10.1 Subscription Agreement dated April 1, 1998, by and between
Chaparral Resources, Inc. and Network Fund III, Ltd.
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