Hydrocarb Energy wraps $616,667 sale of convertible promissory notes

Two-year 12% convertible subordinated notes sold to CEO and director

By Devika Patel

Knoxville, Tenn., Sept. 22 – Hydrocarb Energy Corp. sold a $350,000 convertible subordinated promissory note to its chief executive officer and chairman Kent P. Watts on Sept. 14, according to an 8-K filed Friday with the Securities and Exchange Commission. The company sold a similar $100,000 note to director S. Chris Herndon on Aug. 26 and another $166,667 of notes to Watts on Sept. 17.

The 12% note is due in two years and converts into common shares at $0.75 per share, a 52.23% discount to the Aug. 25 closing share price of $1.57.

The $100,000 convertibles convert to common stock at $4.00 per share.

The petroleum exploration company is based in Houston.

Issuer:	Hydrocarb Energy Corp.
Issue:	Convertible subordinated promissory note
Amount:	$616,667
Maturity:	Two years
Coupon:	12%
Conversion price:	$0.75
Warrants:	No
Investors:	Kent P. Watts (for $516,667), S. Chris Herndon (for $100,000)
Settlement dates:	Aug. 26 (for $100,000), Sept. 14 (for $350,000), Sept. 17 (for $166,667)
Stock symbol:	OTCBB: HECC
Stock price:	$1.57 at close Aug. 25
Market capitalization:	$36.76 million

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