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 8, 2004
(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
(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 8. OTHER EVENTS
On the 8h day of November, 2004, Nexia Holdings, Inc. (the ACompany@) approved
for filing with the Secretary of State for Nevada a ACertificate 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 C Preferred Stock and authorized in the amount of 5,000,000 shares,
out of the total number of 50,000,000 preferred shares authorized by the
Company's Articles of Incorporation.
The Series C 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 $5.00 per share in any
distribution as a result of liquidation. These shares have no voting rights
equivalent to the common shares.
Rights to dividends are granted to the Series C 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. The Series C Preferred Stock hold conversion rights into shares of
the Company's common stock into that number of shares equal in market value to
$5.00. The Series C Preferred Shares are subject to redemption by the Company
upon a $5.00 cash payment for each Series C share or the issuance of common
shares with a market value of $5.00.
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:
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Exhibit No. Page No. Description
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4 4 Certificate of Determination of the Rights and Preferences of Preferred Stock of Nexia Holdings, Inc.
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 9th day of November, 2004.
Nexia Holdings, Inc.
/S/ Richard Surber
Richard Surber, President
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 C 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 C Convertible Preferred Stock (the "Series C Preferred"), consisting
of Five Million (5,000,000) 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 C 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 C 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 the affairs of the Company until the Series C 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 C 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 C 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 C Preferred except for those preferential rights as
granted herein but the right to receive dividends providing all dividends
granted to the Series C 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 C
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 C Preferred herein.
2. Rights, Powers and Preferences
The Series C 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. Of the currently authorized
preferred stock, Five Million (5,000,000) shares of par value $0.001 preferred
stock shall be designated as shares of "Series C Convertible Preferred Stock"
and carry a stated conversion value of $5.00 per share.
B. Rank. The Series C Preferred shall be senior to the
Common Stock and any other series or class of the Company=s Preferred Stock
except Series A 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 C 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 Five Dollars ($5.00) per share. Then
all of the assets of the Company available to be
distributed shall be distributed ratably to the holders
of the Series C 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 voluntary or involuntary, the
assets to be distributed to the holders of the Series
C 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 C
Preferred.
(ii) None of the following events shall be treated as or
deemed to be a liquidation hereunder:
(a) A merger, consolidation or reorganization of
the Company;
(b) A sale or other transfer of all or
substantially all of the Company's assets;
(c) A sale of 50% or more of the Company's capital
stock then issued and outstanding;
(d) A purchase or redemption by the Company of
stock of any class; or
(e) Payment of a dividend or distribution from
funds legally available therefor.
D. No Voting Rights. In any and all matters the Series C
Preferred shall have no voting rights in any matter presented to the
shareholders of the common stock of the Company. Only matters affecting the
rights of holders of Series C Preferred shares to dividends or affecting their
liquidation rights shall be presented to holders thereof for a vote of approval
as herein provided for and for no other purpose. .
3. Dividends
The holders of the Series C 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. AMarket 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
C Preferred, so long as any shares of Series C 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 C 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 C Preferred shall have the following conversion rights (the
"Conversion Rights"):
A. Holder's Optional Right to Convert. Each share of Series
C 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 C 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 C Preferred
to the Company.
B. Conversion Basis. Each share of Series C Preferred
shall be convertible into that number of shares of the Company's Common
Stock, equal in Market Value to Five Dollars ($5.00).
C. Mechanics of Conversion. Before any holder of Series C
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 the Common Stock or the Preferred
Stock, that he elects to convert the same and shall state therein the number
of shares of Series C 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 C Preferred a
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 C Preferred.
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D. Adjustments to the Conversion Basis.
(i) Stock Splits and Combinations. At any time after
the Company first issues the Series C Preferred and while any of the shares of
Series C 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 C
Preferred and while any of the shares of Series C
Preferred remain outstanding, if the Common Stock
issuable upon the conversion of the Series C 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 C
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 C Preferred might
have been converted immediately prior to such
reorganization, reclassification, or change, all subject
to further adjustments as provided herein.
(iii) Reorganization, Mergers, Consolidations or Sales of
Assets. At any time after the Company first issues the
Series C 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 C Preferred thereafter shall be entitled to
receive upon conversion of the Series C 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 C 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 C 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 C 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 C 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 C 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 C Preferred.
5. Protective Provisions
Notwithstanding anything contained herein to the contrary, including but
not limited to paragraph 4.D above, so long as any of the Series C 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
fifty one percent (51%) of the total number of shares of Series C Preferred
outstanding:
A. Alter or change the rights, preferences or privileges of
the Series C Preferred so as to adversely affect in any manner the conversion
basis by which the shares of Series C Preferred are presently converted into
shares of Common Stock.
B. Increase the authorized number of Series C Preferred.
C. Create any new class of shares having preferences over
or being on a parity with the Series C 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 C Preferred then outstanding.
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 C Preferred. Upon redemption the Company
shall pay for each share redeemed the amount of Five Dollars ($5.00) per share,
payable in cash or common stock of the Company.
At least thirty (30) days previous notice by mail, postage prepaid,
shall be given to the holders of record of the Series C 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 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 C 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 C
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 C 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 C
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 C Preferred acquired by the Company by
reason of conversion or otherwise shall be reissued as Series C Preferred, and
all such shares thereafter shall be 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 C 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 C 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 15th day of
October, 2004.
/s/ Richard D. Surber
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Richard D. Surber, Director
/s/ Gerald Einhorn
Gerald Einhorn, Director
/s/ Adrienne Bernstein
Adrienne Bernstein, Director
/s/ John E. Fry, Jr.
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John E. Fry, Jr., Director