CURRENT REPORT FOR ISSUERS SUBJECT TO THE
1934 ACT REPORTING REQUIREMENTS
FORM 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Event: November 7, 2003
(date of earliest event reported)
NEXIA HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
033-22128D 84-1062062
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(Commission File Number) (IRS Employer Identification Number)
268 West 400 South, Suite 300, Salt Lake City, Utah 84101
(Address of principal executive offices)
(801) 575-8073
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
On the 7th day of November, 2003, Nexia Holdings, Inc. (the "Company") approved
for filing with the Secretary of State for Nevada a "Certificate of
Determination of the Rights and Preferences of Preferred Stock of Nexia
Holdings, Inc." This document sets forth and designates the rights and
privileges of the Preferred Stock of the Company that are designated as Series A
Convertible Preferred Stock and authorized in the amount of 10,000,000 shares,
out of the total number of 50,000,000 preferred shares authorized by the
Company's Articles of Incorporation.
The Series A Convertible Preferred Stock is designated as having a par value of
$0.001 per share and designated as senior to the Common Stock of the Company. In
the event of liquidation the shares have a priority right to $10.00 per share in
any distribution as a result of liquidation. These shares are given the same
voting rights as Common Shares on a one hundred-for-one basis.
Rights to dividends are granted to the Series A Convertible Preferred Stock
equal to those of the Common Stock, when, as and if declared by the Directors of
the Company, to be paid in cash or in common stock equal to market value at the
election of the Company. Conversion rights into shares of Common Stock are given
to the Series A Convertible Preferred Stock based upon that number of shares of
the Company's Common Stock equal in market value to $10.00 at the time of
conversion.
The information provided hereinabove is merely a synopsis of the basic terms of
the determination document referenced above, which descriptions are qualified in
their entirety by the terms of the document itself, which document is attached
hereto as an exhibit and thereby incorporated herein by reference
ITEM 7. Financial Statements and Exhibits The following exhibits are included as
part of this report:
Exhibit No.Page No. Description
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4 3 Certificate of Determination of the Rights and Preferences
of Preferred Stock of Nexia Holdings, Inc.
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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.
Dated this 7th day of November, 2003.
Nexia Holdings, Inc.
/s/ Richard Surber
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Richard Surber, President
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Exhibit 4
CERTIFICATE OF DETERMINATION
OF THE RIGHTS AND PREFERENCES OF PREFERRED STOCK
OF NEXIA HOLDINGS INC.
WHEREAS, the Articles of Incorporation of Nexia Holdings, Inc., a
corporation organized and existing under the laws of Nevada (the "Company"), as
amended, provide that the Company has authorized Fifty Million (50,000,000)
shares of par value $0.001 preferred stock ("Preferred Stock") and, further,
that the designation, powers, preferences and relative participating, option or
other special rights and qualification, limitations or restrictions of the
shares of such Preferred Stock may be issued from time to time in one or more
series, each of such series to have such voting powers, designation,
preferences, and relative participating, optional or other special rights and
the qualifications, limitations or restrictions thereof, as expressed herein or
in a resolution or resolutions, providing for the issuance of such series,
adopted by the directors; and
WHEREAS, THE COMPANY DOES HEREBY CERTIFY that pursuant to the authority
contained in its Articles of Incorporation, and in accordance with the
provisions of applicable law of Nevada, the Company's directors have duly
adopted the following resolutions determining the Designations, Rights and
Preferences of a special class of its authorized Preferred Stock, herein
designated as Series A Convertible Preferred Stock.
"RESOLVED, that pursuant to the authority vested in the directors of this
Company by its Articles of Incorporation, a special class of preferred stock of
the Company be and is hereby created out of the 50,000,000 shares of Preferred
Stock available for issuance, such series to be designated as Series A
Convertible Preferred Stock (the "Series A Preferred"), consisting of Ten
Million (10,000,000) shares, of which the preferences and relative rights and
qualifications, limitations or restrictions thereof (in addition to those set
forth in the Company's Articles of Incorporation), shall be as follows:
1. DEFINITIONS
Common Stock. The term "Common Stock" shall mean all shares now or
hereafter authorized of any class of Common Stock of the Company and any
other stock of the Company, howsoever designated, authorized after the
Issue Date, which has the right (subject always to prior rights of any
class or series of Preferred Stock) to participate in the distribution of
the assets and earnings of the Company without limit as to per share
amount.
Issue Date. The term "Issue Date" shall mean the date that shares of
Series A Preferred are first issued by the Company.
Junior Stock. The term "Junior Stock" shall mean, for purposes of these
resolutions, any class or series of stock of the Company authorized after
the Issue Date not entitled to receive any dividends in any dividend
period unless any dividends required to have been paid or declared and set
apart for payment on the Series A Preferred shall have been so paid or
declared and set apart for payment and, for purposes of these resolutions,
shall mean Common Stock and any other class or series of stock of the
Company authorized after the Issue Date not entitled to receive any assets
upon liquidation, dissolution or winding up of
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the affairs of the Company until the Series A Preferred shall have
received the entire amount to which such stock is entitled upon such
liquidation, dissolution or winding up.
Parity Stock. The term "Parity Stock" shall mean, for purposes of these
resolutions the Common Stock and any other class or series of stock of the
Company authorized after the Issue Date entitled to receive payment of
dividends subject only to those preferential rights of dividends granted
to the Series A Preferred and, for purposes of these resolutions, shall
mean any class or series of stock of the Company authorized after the
Issue Date entitled to receive assets upon liquidation, dissolution or
winding up of the affairs of the Company subject to only those
preferential rights and preference granted to the Series A Preferred.
Senior Stock. The term "Senior Stock" shall mean, for purposes of these
resolutions, any class or series of stock of the Company authorized before
the Issue Date of the Series A Preferred except for those preferential
rights as granted herein but the right to receive dividends providing all
dividends granted to the Series A Preferred shall have been paid or set
aside to be paid, and, for purposes of these resolutions, shall mean any
class or series of stock of the Company authorized after the Issue Date
ranking equal to the Series A Preferred and the right to participate in
any distribution upon liquidation, dissolution or winding up of the
affairs of the Company except for those preferential rights granted to the
Series A Preferred herein.
2. Rights, Powers and Preferences
The Series A Preferred shall have the voting powers, preferences and
relative, participating, optional and other special rights,
qualifications, limitations and restrictions as follows:
A. Designation and Amount. All of the present authorized Ten Million
(10,000,000) shares of par value $0.001 preferred stock shall be
designated as shares of "Series A Convertible Preferred Stock" and
par value set at $0.001 per share.
B. Rank. The Series A Preferred shall be senior to the Common Stock and
any other series or class of the Company's Preferred Stock.
C. Liquidation Rights.
(i) In the event of any liquidation, dissolution, or winding up of
the Company, whether voluntary or involuntary, the holders of
the Series A Preferred then outstanding shall be entitled to
be paid out of the assets of the Company available for
distribution to its shareholders, before any payment or
declaration and setting apart for payment of any amount shall
be made in respect of any outstanding capital stock of the
Company, an amount equal to Ten Dollars ($10.00) per share,
plus the Redemption provison (as defined below). Then all of
the assets of the Company available to be distributed shall be
distributed ratably to the holders of the Series A Preferred
and then to the holders of other outstanding shares of capital
stock of the Company. If upon any liquidation, dissolution, or
winding up of the Company, whether
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voluntary or involuntary, the assets to be distributed to the
holders of the Series A Preferred shall be insufficient to
permit the payment to the holders thereof the full
preferential amount as provided herein, then such available
assets shall be distributed ratably to the holders of the
Series A Preferred.
D. Voting Rights. In all matters the Series A Preferred shall have the
same voting rights as the Common Stock on a one hundred-for-one
basis. If the Company effects a stock split which either increases
or decreases the number of shares of Common Stock outstanding and
entitled to vote, the voting rights of the Series A Preferred shall
not be subject to adjustment unless such stock split shall be
applied to the Series A Preferred.
3. Dividends
The holders of the Series A Preferred shall be entitled to receive Common
Stock dividends when, as, and if declared by the directors of the Company,
to be paid in cash or in Market Value of the Company's common stock at the
election of the Company. "Market Value", for the purposes of this
Certificate of Determination shall mean the average of the bid and ask
prices for the common stock of the Company for the five business days
preceding the declaration of a dividend by the Board of Directors.
Without prior written consent of the majority of the holders of Series A
Preferred, so long as any shares of Series A Preferred shall be
outstanding, the Company shall not declare or pay on any Junior Stock any
dividend whatsoever, whether in cash, property or otherwise, nor shall the
Company make any distribution on any Junior Stock, nor shall any Junior
Stock be purchased or redeemed by the Company or any of its subsidiaries
of which it owns not less than 51% of the outstanding voting stock, nor
shall any monies be paid or made available for a sinking fund for the
purchase or redemption of any Junior Stock, unless all dividends to which
the holders of Series A Preferred shall have been entitled for all
previous dividend periods shall have been paid or declared and a sum of
money sufficient for the payment thereof and the Redemption Price is set
apart.
4. Conversion
The Series A Preferred shall have the following conversion rights (the
"Conversion Rights"):
A. Holder's Optional Right to Convert.
----------------------------------
Each share of Series A Preferred shall be convertible, at the option
of the holder(s), on the Conversion Basis in effect at the time of
conversion. Such right to convert shall commence as of the Issue
Date and shall continue thereafter for a period of ten years, such
period ending on the tenth anniversary of the Issue Date. In the
event that the holder(s) of the Series A Preferred elect to convert
such shares into Common Stock, the holder(s) shall have sixty (60)
days from the date of such notice in which to tender their shares
of Series A Preferred to the Company.
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B. Conversion Basis. Each share of Series A Preferred shall be
convertible into that number of shares of the Company's Common
Stock, equal in Market Value to Ten Dollars ($10.00).
C. Mechanics of Conversion.
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Before any holder of Series A Preferred shall be entitled to convert
the same into shares of Common Stock, such holder shall (i) give
written notice to the Company, at the office of the Company or of
its transfer agent for to Common Stock or the Preferred Stock, that
he elects to convert the same and shall state therein the number of
shares of Series A Preferred being converted; and (ii)surrender
the certificate or certificates therefor, duly endorsed. Thereupon
the Company shall promptly issue and deliver to such holder of
Series A Preferred certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled.
The conversion shall be deemed to have been made and the resulting
shares of Common Stock shall be deemed to have been issued
immediately prior to the close of business on the date of such
notice and surrender of the shares of Series A Preferred.
D. Adjustments to the Conversion Basis.
(i) Stock Splits and Combinations.
-----------------------------
At any time after the Company first issues the Series A
Preferred and while any of the shares of Series A Preferred
remain outstanding, if the Company shall effect a subdivision
or combination of the Common Stock subject to the Protective
Provisions (as defined below), the Conversion Basis then in
effect immediately before that subdivision or combination
shall be proportionately adjusted. Any adjustment shall
become effective at the close of business on the date the
subdivision or combination becomes effective.
(ii) Reclassification, Exchange or Substitution. At any time after
the Company first issues the Series A Preferred and while any
of the shares of Series A Preferred remain outstanding, if the
Common Stock issuable upon the conversion of the Series A
Preferred shall be changed into the same or a different number
of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend
provided for above, or a reorganization, merger,
consolidation, or sale of assets), then and in each such event
the holder of each share of Series A Preferred shall have the
right thereafter to convert such shares into the kind and
amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification, or
other change, by holders of the number of shares of Common
Stock into which such shares of Series A Preferred might have
been converted immediately prior to such reorganization,
reclassification, or change, all subject to further
adjustments as provided herein.
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(iii) Reorganization, Mergers, Consolidations or Sales of Assets. At
any time after the Company first issues the Series A Preferred
and while any of such shares remain outstanding, if there
shall be a capital reorganization of the Common Stock (other
than a subdivision, combination, reclassification, or exchange
of shares), or a merger or consolidation of the Company with
or into another Company, or the sale of all or substantially
all of the Company's assets to any other person, then as a
part of such reorganization, merger, consolidation, or sale,
provision shall be made so that the holders of the Series A
Preferred thereafter shall be entitled to receive upon
conversion of the Series A Preferred, the number of shares of
stock or other securities or property of the Company, or of
the successor Company resulting from such merger or
consolidation or sale, to which a holder of Series A Preferred
deliverable upon conversion would have been entitled on such
capital reorganization, merger, consolidation, or sale.
E. Notices of Record Date.
----------------------
In the event of any reclassification or recapitalization of the
capital stock of the Company, any merger or consolidation of the
Company, or any transfer of all or substantially all of the assets
of the Company to any other Company, entity, or person, or any
voluntary or involuntary dissolution, liquidating, or winding
up of the Company, the Company shall mail to each holder of Series
A Preferred at least 30 days prior to the record date specified
therein, a notice specifying the date on which any such
reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation, or winding up is expected to become
effective, and the time, if any is to be fixed, as to when the
holders of record of Common Stock (or other securities) shall be
entitled to exchange their shares of Common Stock (or other
securities) for securities or other property deliverable upon such
reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation, or winding up.
F. Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the Series A Preferred. In lieu of any
fractional shares to which the holder would otherwise be entitled,
the Company shall pay cash equal to the product of such fraction
multiplied by the fair market value of one share of the Company's
Common Stock on the date of conversion, as determined in good faith
by the Company's directors.
G. Reservation of Stock Issuable Upon Conversion. At such time as the
Company increases its authorized capital resulting in a sufficient
number of shares of Common Stock becoming available for the
conversion of the Series A Preferred, the Company shall reserve and
keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of the
shares of the Series A Preferred, a number of its shares of Common
Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Series A Preferred.
5. Protective Provisions
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Notwithstanding anything contained herein to the contrary, including but
not limited to paragraph 4.D above, so long as any of the Series A
Preferred shall be outstanding, the Company shall not without first
obtaining the approval (by vote or written consent, as provided by law) of
the holders of at least two-thirds of the total number of shares of Series
A Preferred outstanding:
A. Alter or change the rights, preferences or privileges of the Series
A Preferred by way of reverse stock split, reclassification, merger
consolidation or otherwise, so as to adversely affect in any manner
the voting rights including number of votes presently allowed or the
conversion basis by which the shares of Series A Preferred are
presently converted into shares of Common Stock.
B. Increase the authorized number of Series A Preferred.
C. Create any new class of shares having preferences over or being on a
parity with the Series A Preferred as to dividends or assets, unless
the purpose of creation of such class is, and the proceeds to be
derived from the sale and issuance thereof are to be used for, the
retirement of all Series A Preferred then outstanding.
D. Repurchase any of the Company's Common Stock.
E. Merge or consolidate with any other Company, except into or with a
wholly-owned subsidiary of the Company with the requisite
shareholder approval.
F. Sell, convey or otherwise dispose of, or create or incur any
mortgage, lien, charge or encumbrance on or security interest in or
pledge of, or sell and leaseback, all or substantially all of the
property or business of the Company.
G. Incur, assume or guarantee any indebtedness (other than such as may
be represented by the obligation to pay rent under leases) maturing
more than 18 months after the date on which it is incurred, assumed
or guaranteed by the Company, except purchase money obligations,
obligations assumed as part of the price of property purchased, or
the extension, renewal or refunding of any thereof.
6. Redemption
Subject to the applicable provisions of Nevada law, the Company, at the
option of its directors, may at any time or from time to time redeem the
whole or any part of the outstanding Series A Preferred. Upon redemption
the Company shall pay for each share redeemed the amount of Ten Dollars
($10.00) per share, payable in cash, plus a premium to compensate the
original purchaser(s) for the investment risk and cost of capital equal to
the greater of (a) Five Dollars ($5.00) per share, or (b) an amount per
share equal to fifty percent (50%) of the market capitalization of the
Company on the date of notice of such redemption divided by 10,000,000
(the "Redemption Premium"), the redemption amount and the Redemption
Premium hereinafter being referred to as the "Redemption Price." Such
redemption shall be on an all-or-nothing basis.
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At least thirty (30) days previous notice by mail, postage prepaid,
shall be given to the holders of record of the Series A Preferred to
be redeemed, such notice to be addressed to each such shareholder at
the address of such holder appearing on the books of the Company or
given by such holder to the Company for the purpose of notice, or if
no such address appears or is given, at the place where the
principal office of the Company is located. Such notice shall state
the date fixed for redemption and the redemption price, and shall
call upon the holder to surrender to the Company on said date at the
place designated in the notice such holder's certificate or
certificates representing the shares to be redeemed. On or after the
date fixed for redemption and stated in such notice, each holder of
Series A Preferred called for redemption shall surrender the
certificate evidencing such shares to the Company at the place
designated in such notice and shall thereupon be entitled to receive
payment of the redemption price. If less than all the shares
represented by any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares. If
such notice of redemption shall have been duly given, and if on the
date fixed for redemption funds necessary for the redemption shall
be available therefore, notwithstanding that the certificates
evidencing any Series A Preferred called for redemption shall not
have been surrendered, the dividends with respect to the shares so
called for redemption shall forthwith after such date cease and
determine, except only the right of the holders to receive the
redemption price without interest upon surrender of their
certificates therefore.
If, on or prior to any date fixed for redemption of Series A
Preferred, the Company deposits, with any bank or trust company as a
trust fund, the number of shares of Common Stock of a sum sufficient
to redeem, on the date fixed for redemption thereof, the shares
called for redemption, with irrevocable instructions and authority
to the bank or trust company to give the notice of redemption
thereof (or to complete the giving of such notice if theretofore
commenced) and to pay, or deliver, on or after the date fixed for
redemption or prior thereto, the redemption price of the shares to
their respective holders upon the surrender of their share
certificates, then from and after the date of the deposit (although
prior to the date fixed for redemption), the shares so called shall
be redeemed and any dividends on those shares shall cease to accrue
after the date fixed for redemption. The deposit shall constitute
full payment of the shares to their holders and from and after the
date of the deposit the shares shall no longer be outstanding and
the holders thereof shall cease to be shareholders with respect to
such shares, and shall have no rights with respect thereto except
the right to receive from the bank or trust company payment of the
redemption price of the shares without interest, upon the surrender
of their certificates therefore. Any interest accrued on any funds
so deposited shall be the property of, and paid to, the Company. If
the holders of Series A Preferred so called for redemption shall
not, at the end of six years from the date fixed for redemption
thereof, have claimed any funds so deposited, such bank or trust
company shall thereupon pay over to the Company such unclaimed
funds, and such bank or trust company shall thereafter be relieved
of all responsibility in respect thereof to such holders and such
holders shall look only to the Company for payment of the redemption
price.
7. Reissuance
No share or shares of Series A Preferred acquired by the Company by reason
of conversion or otherwise shall be reissued as Series A Preferred, and
all such shares thereafter shall be
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returned to the status of undesignated and unissued shares of Preferred
Stock of the Company.
8. Headings or Subdivisions
The heading of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the
provisions hereto.
9. Severability of Provisions
If any right, preference or limitation of the Series A Preferred set forth
in this resolution (as such resolution may be amended from time to time)
is invalid, unlawful or incapable of being enforced by reason of any rule
of law or public policy, all other rights, preferences and limitations set
forth in this resolution (as so amended) which can be given effect without
the invalid, unlawful or unenforceable right, preference or limitation
shall, nevertheless, remain in full force and effect, and no right,
preference or limitation herein set forth shall be deemed dependent upon
any other such right, preference or limitation unless so expressed herein.
10. Status of Reacquired Stock
Shares of Series A Preferred which have been issued and reacquired in any
manner shall, upon compliance with any applicable provisions of Nevada
law, have the status of authorized and unissued shares of Preferred Stock
and may be redesignated and reissued in any series or class."
IN WITNESS WHEREOF, the undersigned Directors of NEXIA HOLDINGS INC., a Nevada
corporation, did hereby execute this Certificate effective the _____ day of
November, 2003.
Richard Surber, President /s/ Richard Surber
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Gerald Einhorn, Secretary /s/ Gerald Einhorn
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Approved by the Board of Directors
Richard D. Surber, Director
/s/ Richard Surber
Gerald Einhorn, Director
/s/ Gerald Einhorn
Adrienne Bernstein, Director
/s/ Adriennd Bernstein
John E. Fry, Jr., Director
/s/ John E. Fry
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