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 Report (Date of earliest event reported): September 28, 2006
Sinoenergy Corporation
(Exact name of registrant as specified in its charter)
Nevada 0-30017 84-1491682
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
234-5149 Country Hills Blvd. NW; Suite 429, Calgary, Alberta, Canada T3A 5K8
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(Address of principal executive offices)
Registrant's telephone number, including area code: (832) 274-3766
Franklyn Resources III, Inc.
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(Former name of registrant, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On September 28, 2006, we filed our amended and restated articles of
incorporation (the "Restated Articles") with the Secretary of State of Nevada.
The Restated Articles were approved by the holders of more than 97% of our
outstanding common stock on September 5, 2006, and an information statement was
mailed to our stockholders on September 8, 2006.
The following is a summary of the changes effected by the Restated
Articles. A copy of the Restated Articles is filed as an exhibit to this Form
8-K.
1. Our corporate name was changed to Sinoenergy Corporation.
2. Our authorized capital stock was changed from 25,000,000 shares, all of
which are shares of common stock, par value $.001 per share, to an authorized
capital stock of 110,000,000 shares, of which 10,000,000 shares are shares of
preferred stock, par value $.001 per share, and 100,000,000 shares are shares of
common stock, par value $.001 per share.
3. Our board of directors has broad rights to set the rights, preferences,
privileges, limitation and restrictions for one or more series of preferred
stock, including the following:
(i) the designation of such series;
(ii) the dividend rate of such series, the conditions and
dates upon which such dividends shall be payable, the preference or relation
which such dividends shall bear to the dividends payable on any other class or
classes or of any other series of capital stock, whether such dividends shall be
cumulative or noncumulative, and whether such dividends may be paid in shares of
any class or series of capital stock or other securities of the Corporation;
(iii) whether the shares of such series shall be subject to
redemption by the Corporation, and, if made subject to such redemption, the
times, prices and other terms and conditions of such redemption;
(iv) the terms and amount of any sinking fund provided for the
purchase or redemption of the shares of such series;
(v) whether or not the shares of such series shall be
convertible into or exchangeable for shares of any other class or classes or
series of capital stock or other securities of the Corporation, and, if
provision be made for conversion or exchange, the times, prices, rates,
adjustment and other terms and conditions of such conversion or exchange;
(vi) the extent, if any, to which the holders of the shares of
such series shall be entitled to vote, as a class or otherwise, with respect to
the election of the directors or otherwise, and the number of votes to which the
holder of each share of such series shall be entitled;
(vii) the restrictions, if any, on the issue or reissue of any
additional shares or series of Preferred Stock; and
(viii) the rights of the holders of the shares of such series
upon the dissolution of, or upon the distribution of assets of, the Corporation.
4. The Restated Articles add the following provision:
"The terms and conditions of any rights, options and warrants approved by
the Board of Directors may provide that any or all of such terms and conditions
may not be waived or amended or may be waived or amended only with the consent
of the holders of a designated percentage of a designated class or classes of
capital stock of the Corporation (or a designated group or groups of holders
within such class or classes, including but not limited to disinterested
holders), and the applicable terms and conditions of any such rights, options or
warrants so conditioned may not be waived or amended or may not be waived or
amended absent such consent."
5. The Restated Articles add a provision which eliminates liability of
directors for monetary damages to the fullest extent permitted by Nevada law.
Under Nevada law, with certain limited exception and unless the articles of
incorporation provide for greater individual liability, a director or officer is
not individually liable to the corporation or its stockholders or creditors for
any damages as a result of any act or failure to act in his capacity as a
director or officer unless it is proven that (a) his or her act or failure to
act constituted a breach of fiduciary duties as a director or officer; and (b)
his or her breach of those duties involved intentional misconduct, fraud or a
knowing violation of law.
6. The Restated Articles provide that our officers and directors shall be
indemnified to the fullest extent authorized by Nevada law, and that such right
is a contract right. They also expressly permit us to carry officers and
directors liability insurance that provides coverage whether or not we would
have the power to indemnify such persons under Nevada law.
On September 29, 2006, we filed a certificate of designation setting forth
the rights, preferences and privileges of the holders a series of preferred
stock, designated as the series A preferred stock. The certificate of
designation was filed pursuant to a securities purchase agreement dated June 2,
2006, as amended, with an investor group. As a result of the filing of the
Restated Articles and the certificate of designation, our notes in the principal
amount of $3,700,000 became automatically converted into an aggregate of
5,692,307 shares of series A preferred stock.
The following discussion is a summary of the key provisions of the
certificate of designation, but this summary is qualified in its entirety by
reference to the full text of the certificate of designation, a copy of which is
filed as an exhibit to this Form 8-K. The certificate of designation provides:
o Each share of series A preferred stock is initially convertible into
one share of common stock without the payment of any additional
consideration. The conversion ratio is subject to adjustment as
described below.
o If, while investors in the private placement own shares of series A
preferred stock, we issue common stock at a price, or options,
warrants or other convertible securities with a conversion or
exercise price less than the conversion price (initially $.65), with
certain specified exceptions, the number of shares issuable upon
conversion of one share of series A preferred stock is adjusted to
reflect a conversion price equal to the lower price.
o If our consolidated pre-tax income for 2006 is less than $.212 per
share on a fully-diluted basis, the conversion price shall be
reduced proportionately by up to a maximum of 40%.
o If our consolidated pre-tax income for 2007 is less than $.353 per
share on a fully-diluted basis, the conversion price shall be
reduced proportionately by up to a maximum of 40%.
o No dividends are payable with respect to the series A preferred
stock.
o While the series A preferred stock is outstanding, we may not pay
dividends on or redeem shares of common stock.
o Upon any voluntary or involuntary liquidation, dissolution or
winding-up, the holders of the series A preferred stock are entitled
to a preference of $.65 per share before any distributions or
payments may be made with respect to the common stock or any other
class or series of capital stock which is junior to the series A
preferred stock upon voluntary or involuntary liquidation,
dissolution or winding-up.
o The holders of the series A preferred stock have no voting rights.
However, as long as any shares of series A preferred stock are
outstanding, we shall not, without the affirmative approval of the
holders of 75% of the outstanding shares of series A preferred stock
then outstanding, (a) alter or change adversely the powers,
preferences or rights given to the series A preferred stock or
alter, (b) authorize or create any class of stock ranking as to
dividends or distribution of assets upon liquidation senior to or
otherwise pari passu with the series A preferred stock, or any of
preferred stock possessing greater voting rights or the right to
convert at a more favorable price than the series A preferred stock,
(c) amend our certificate of incorporation or other charter
documents in breach of any of the provisions of the certificate of
designation, (d) increase the authorized number of shares of series
A preferred stock, or (e) enter into any agreement with respect to
the foregoing.
o The holders of the series A preferred stock may not convert the
series A preferred stock to the extent that such conversion would
result in the holders owning more than 4.9% of the outstanding
Common Stock. This limitation may not be amended or waived.
Item 9.01 Financial Statements and Exhibits.
Exhibits
3.1 Amended and Restated Articles of Incorporation.
3.2 Certificate of Designation for the 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.
SINOENERGY CORPORATION
(formerly Franklyn Resources III, Inc.)
(Registrant)
October 3, 2006
By: Bo Huang
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Bo Huang (Chief Executive Officer)