10QSB 1 doc1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934: For the quarterly period ended: December 31, 2003 ------------------ or [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934: For the transition period from _______ to _________ Commission file number: 000-25496 HYPERDYNAMICS CORPORATION (Exact name of registrant as specified in its charter) Delaware 87-0400335 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 9700 Bissonnet, Suite 1700 Houston, Texas 77036 (Address of principal executive offices, including zip code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS As of January 31, 2004, 31,767,991 shares of common stock, $0.001 par value, were outstanding. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
Table of Contents Part I Financial Information Item 1 Financial Statements 3 Consolidated Balance Sheet at December 31, 2003 3 Consolidated Statements of Operations for the three and six months ended December 31, 2003 and 2002 (restated) 4 Consolidated Statements of Cash Flows for the six months ended December 31, 2003 and 2002 (restated) 5 Notes to Consolidated Financial Statements 7 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3 Disclosure Controls and Procedures 10 Part II Other Information Item 1 Legal Proceedings 11 Item 2 Changes in Securities 11 Item 6 Exhibits and Reports on Form 8-K 11 (a) Exhibits (b) Reports on Form 8-K Signatures 12
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Part 1 Financial Information Item 1 Financial Statements HYPERDYNAMICS CORPORATION Consolidated Balance Sheet As of December 31, 2003 ASSETS Current Assets Cash $ 221,864 Restricted certificate of deposit 86,120 Accounts receivable, net of allowance for doubtful accounts of $24,742 16,352 Inventory 7,153 Stock subscription receivable 105,000 Other current assets 1,671 ---------------- Total Current Assets 438,160 Property and Equipment, net of accumulated depreciation of $170,410 75,465 Other Assets Restricted certificate of deposit 109,075 Unproved Oil and Gas properties, using Full Cost Method of Accounting 2,752,563 Deposits 23,432 ---------------- Total other assets 2,885,070 ---------------- TOTAL ASSETS $ 3,398,695 ================ LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Current portion of capital leases $ 20,265 Accounts payable and accrued expenses 1,555,667 Accrued expense for issuable options 159,375 Accounts payable seismic data 650,000 Customer deposits 3,264 Short-term note payable 44,000 Dividends payable 314,064 Dividends payable to related party 109,000 ---------------- Total Current Liabilities 2,855,635 ---------------- Long-term portion of capital leases 22,381 Mandatorily redeemable preferred stock, net of $38,625 unamortized offering costs and $309,000 unamortized discount 424,875 Deferred Rent 136,694 ---------------- TOTAL LIABILITIES 3,439,585 ---------------- Commitments and contingencies Stockholders' Deficit Preferred stock, par value $0.001; 20,000,000 shares authorized Series A - 1,945 shares issued and outstanding 2 Series B - 2,725 shares issued and outstanding 3 Common stock, $.001 par value, 250,000,000 shares authorized, 30,576,451 shares issued and outstanding 30,576 Additional paid-in capital 11,866,642 Accumulated deficit (11,938,113) ---------------- Total stockholders' deficit ( 40,890) ---------------- Total Liabilities and Stockholders' Deficit $ 3,398,695 ================
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HYPERDYNAMICS CORPORATION Consolidated Statements of Operations 3 Months and 6 Months ended December 31, 2003 and 2002 (Restated) 3 Months ended 6 Months ended 2003 2002 2003 2002 (Restated) (Restated) -------------------------------------------------------------- Revenues $ 24,027 $ 204,777 $ 24,027 $ 336,532 Operating Expenses Cost of revenues 49,714 117,204 49,714 236,862 Selling 9,701 17,549 19,731 20,822 General and administration 276,334 305,335 624,519 653,350 Depreciation and amortization 9,375 47,982 19,307 95,968 (Gain) on sale of assets ( 7,514) --------------- -------------- -------------- ------------- Total Operating Expenses 345,124 488,070 713,271 999,488 --------------- -------------- -------------- ------------- LOSS FROM OPERATIONS ( 321,097) ( 283,293) ( 689,244) ( 662,956) Other Income (Expense) Other income (expense) ( 1,275) 170 Interest income 215 1,417 924 2,862 Interest expense ( 325,394) ( 8,623) ( 366,551) ( 15,213) --------------- -------------- -------------- ------------- NET LOSS ( 647,551) ( 290,499) ( 1,054,701) ( 675,307) Preferred dividend requirement ( 46,694) ( 46,854) ( 93,389) ( 93,709) --------------- -------------- -------------- ------------- Net loss chargeable to common $ ( 694,245) $ ( 337,353) $ ( 1,148,090) $ ( 769,016) shareholders =============== ============== ============== ============= Basic and diluted loss per common $ (.02) $ (.02) $ (.04) $ (.04) share Weighted average shares outstanding 28,351,267 21,345,889 27,996,540 21,215,945
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HYPERDYNAMICS CORPORATION Consolidated Statements of Cash Flows 6 Months Ended December 31, 2003 and 2002 (Restated) 2003 2002 (Restated) ----------------- ---------------- Cash flows from operating activities Net loss $ ( 1,054,701) $ ( 675,307) Adjustments to reconcile net loss to cash used by Depreciation and amortization 19,307 95,968 Gain on sale of assets ( 7,514) Options and warrants expense 168,890 219,003 Stock issued for services 27,800 Accretion of interest and amortization of offering costs of mandatorily redeemable preferred stock 115,875 Beneficial conversion feature associated with convertible notes payable to officers 249,066 Bad debt expense 8,071 4,678 Changes in: Accounts receivable ( 17,068) ( 117,091) Inventory ( 1,160) ( 6,721) Other current assets ( 1,270) ( 1,092) Accrued salary payable to officers 92,630 Deposits from customers ( 184) ( 375) Change in deferred rent 4,788 4,788 Accounts payable and accrued expenses 399,552 223,950 ----------------- ---------------- Net cash used in operating activities ( 108,834) ( 139,283) ----------------- ---------------- Cash flows from investing activities Decrease in restricted cash 86,392 80,715 Investment in unproved property ( 1,044,559) ( 67,853) Proceeds from sale of equipment 39,356 Purchase of equipment (6,100) ( 35,267) ----------------- ---------------- Net cash provided by (used in) investing activities ( 964,267) 16,951 ----------------- ---------------- Cash flows from financing activities Stock subscription receivable ( 105,000) Proceeds of short-term note payable 44,000 Payments on installment debt ( 9,311) ( 9,662) Proceeds from sale of units consisting of warrants in Hyperdynamics and preferred stock in subsidiary, net of $39,500 offering cost 355,500 Proceeds from sale of common stock and warrants, net of $92,640 offering cost 833,759 116,640 ----------------- ---------------- Net cash provided by financing activities 1,118,948 106,978 ----------------- ---------------- Net increase (decrease) in cash 45,847 ( 15,354) Cash at beginning of period 176,017 29,015 ----------------- ---------------- Cash at end of period $ 221,864 $ 13,661 ================= ================
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HYPERDYNAMICS CORPORATION Consolidated Statements of Cash Flows 6 Months Ended December 31, 2003 and 2002 (Restated) (Continued) Non-cash transactions Issuance of common stock for accounts payable $ 35,000 $35,170 Conversion of notes payable to common stock 268,056 Geological and geophysical work performed on unproved oil and gas properties paid with stock options 159,375 Acquisition and interpretation of seismic data for accounts payable 651,792
6 HYPERDYNAMICS CORPORATION NOTES TO FINANCIAL STATEMENTS 1. Basis of Presentation The unaudited consolidated financial statements of Hyperdynamics Corporation ("Hyperdynamics") have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in Hyperdynamics' latest Annual Report filed with the SEC on Form 10-KSB. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year 2003 as reported in the Form 10-KSB, have been omitted. Prior to the quarter ended December 31, 2003, Hyperdynamics accounted for stock options issued to employees under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. Effective October 1, 2003, Hyperdynamics adopted the fair value recognition provisions of FASB statement 123, Accounting for Stock-Based Compensation. All prior periods presented have been restated to reflect the compensation cost that would have been recognized had the provisions of Statement 123 been applied to all awards granted to employees after January 1, 1995. We recorded $$108,443 and $219,003 of stock-based employee compensation costs for the three and six months ended December 31, 2002, respectively, and $4,178,000 for the three months ended September 30, 2003 because certain warrants were accounted for as variable awards beginning in the first quarter of fiscal year ended June 30, 2002 as required by FIN 44. These amounts have been restated to $183,600 for the three and six months ended December 31, 2002 and $66,430 for the three months ended September 30, 2003. 2. Short-term Note Payable Hyperdynamics received $44,000 on December 4, 2003, pursuant to a promissory note payable, due on or before January 4, 2004. The note had no stated interest rate. On January 14, 2004, the note holder converted the amount due, $44,000, to 73,333 shares of Hyperdynamics common stock. 3. Mandatorily Redeemable Preferred Stock During the six months ended December 31, 2003, Hyperdynamics sold an additional 3.95 units of mandatorily redeemable preferred stock for net proceeds of $395,500. The proceeds were allocated $118,597 to warrants to purchase 147,500 shares of Hyperdynamics at $.25 per share that expire on December 31, 2008 and $276,903 to mandatorily redeemable preferred stock. Costs of the offering were $39,500. There are a total of 5.15 units of mandatorily redeemable preferred stock outstanding. The stock will be redeemable for $150,000 per unit, or $772,500, on July 1, 2005, at the option of the holder. Hyperdynamics recorded amortization of the offering costs of $12,875 and accretion of interest of $103,000 during the six months ended December 31, 2003. 4. Stock Issuances During the six months ended December 31, 2003, Hyperdynamics issued 20,917 shares of common stock for accounts payable of $35,000. Additionally, private investors purchased 1,328,454 shares of common stock and 360,253 warrants with an exercise price of $2.00 per share, expiring in second quarter 2006, for $926,400. Offering costs were $92,640, resulting in net proceeds of $833,760. Hyperdynamics' officers converted their convertible notes payable during the quarter ended December 31, 2003, which at that time totaled $268,056 in principal and interest, at a price of $.168. This resulted in the issuance of 1,595,573 shares. Hyperdynamics delivered 1,227,764 shares issued pursuant to the notes payable on December 31, 2003 and 367,809 shares, the balance of the shares issued pursuant to the notes payable, on January 14, 2004. 7 5. Subsequent Events On January 14, 2004, Hyperdynamics entered a service agreement with Seacon, Inc. under which Seacon, Inc. would provide geophysical and geological services relating to the Guinea concession through June 30, 2005. The contract provides for payment of 252,500 options to purchase Hyperdynamics common stock at $.01 per share, expiring one year from the date of vesting. 93,750 options vested upon the execution of the contract and related to services performed during the six months ended December 31, 2003. The cost related to those options, $159,375, was accrued as of December 31, 2003. The remaining 158,750 options vest 31,250 quarterly beginning on March 31, 2004. During January and February 2004, subscriptions receivable of $105,000 were collected and an additional 1,191,540 shares of common stock were sold for $761,174. In conjunction with some of these stock purchases, 181,250 warrants to purchase common stock at $2 per share, expiring three years from the date of issuance, were issued. CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION The Company is including the following cautionary statement to make applicable and take advantage of the safe harbor provision of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, the Company. This quarterly report on form 10QSB contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, expectations, future events or performance and underlying assumptions and other statements which are other than statements of historical facts. Certain statements contained herein are forward-looking statements and, accordingly, involve risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company's expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitations, management's examination of historical operating trends, data contained in the Company's records and other data available from third parties, but there can be no assurance that management's expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors and matters discussed elsewhere herein, the following are important factors that, in the view of the Company, could cause actual results to differ materially from those discussed in the forward-looking statements: the ability of the Company to respond to changes in the information system environment, competition, the availability of financing, and, if available, on terms and conditions acceptable to the Company, and the availability of personnel in the future. Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations During the quarter we successfully completed the minimum work requirements for our contractual obligations regarding our oil and gas concession in West Africa by completing the acquisition of an additional 4,000 kilometers of 2D seismic data. This was a major milestone for us to accomplish. Our revenues decreased 93% from $336,532 in the six months ended December 31, 2002 to $24,027 in the six months ended December 31, 2003. This is attributable to a significant amount of seismic data processing work during the six months ended December 31, 2002; during this year, we have focused on the acquisition of seismic data for our concession in Guinea and revenues have been minimal as we have focused on building our asset versus generating revenues currently. Cost of revenues decreased 80% from $236,862 in the six months ended December 31, 2002 to $49,714 in the six months ended December 31, 2003. Several factors contributed to this decline: the primary reason was the decline in revenue; payroll in fiscal 2003 was higher than the payroll in fiscal 2004; fiscal 2003 cost of sales includes an allocation of rent and utilities of $74,970; and the rent and utilities were included in selling, general and administrative expenses in fiscal 2004. Our selling, general, and administrative expenses decreased 4%, going from $674,172 during the six months ended December 31, 2002 to $644,250 during the six months ended December 31, 2003. Significant changes in the following line items cancelled one another out, thus resulting in the slight decrease in selling, general, and administrative expenses: consulting expenses decreased from $313,218 to $153,099, rent and utilities expense of $83,565 that previously would have been allocated to cost of revenues was included in selling, general, and 8 administrative because the facility was not being used for the seismic transcription business this year, and general expenses were approximately $90,000 higher this year than last year. Effective October 1, 2003, Hyperdynamics adopted the fair value recognition provisions of FASB statement 123, Accounting for Stock-Based Compensation, for stock-based compensation. We adopted FASB Statement 123 using the retroactive restatement method as described in SFAS 148, Accounting for Stock-Based Compensation - Transition and Disclosure. In accordance with that statement, we have retroactively restated all periods presented so that stock option expense is recorded in accordance with SFAS 123. Consequently, amounts previously marked to market of $6,325,000 during quarters ended September 30, 2002 through September 30, 2003 in accordance with APB 25 and related interpretations have been restated, and these financial statements reflect instead the fair value of the options earned during these periods, $481,842. Depreciation and amortization expense was significantly lower in the six months ended December 31, 2003: it decreased 78%, from $95,968 to $19,307. The decrease derives from the decrease in depreciable assets that occurred when we incurred an impairment loss on our ITC facility in the quarter ended June 30, 2003. Interest expense increased 2309% from $15,213 in the six months ended December 31, 2002 to $366,551 in the six months ended December 31, 2003. The interest expense consists mainly of approximately $250,000 attributable to the Notes Payable, due December 31, 2007, which were converted during the quarter ended December 31, 2003, and approximately $115,000 attributable to accretion of interest on the mandatorily redeemable preferred stock. Based on the factors discussed above, net loss chargeable to common shareholders increased $379,074, or 49% from $(769,016) in 2002 to $(1,148,090) in 2003. Liquidity and Capital Resources At December 31, 2003 our current ratio of current assets to current liabilities was 0.15 to 1. This compares to .19 to 1 for 2002. However, it is important to note that deeper analysis of the current ratio reveals several current obligations that while they reduce the current ratio, there are no requirements to use cash to satisfy the underlying obligations. These items include accrued salary payable to officers, deposits, short-term notes payable, accrued expense for issuable options and dividends payable. Also accounts payable includes $134,552 that is currently in dispute in litigation and $115,885 that is contingently payable based on contract for work performed to date. The current ratio of less than 1 results from funding of cash deficits, which resulted from operating losses during the year. It remains management's priority to achieve positive cash flow from operations as quickly as possible. It is necessary as discussed hereunder that we obtain additional capital to fund our primary exploration work. As exploration operations continue on our oil and gas asset, we continue to gather evidence to help support our financing activities. We also expect to be in a position this year to generate revenues from data sales and possible working interest sales to oil company partners. This could have a dramatic effect on cash flow from operations. Therefore, the priority focus remains to perform the exploration work in gathering the evidence for commercially viable hydrocarbons and working to packaging a deal to start drilling operations as soon as practical. We have been and remain successful in raising the capital to support these exploration activities as discussed below. As a public company, the health of our market is paramount to be able to raise critical capital to continue enhancing our major oil and gas asset. Our market trend has seen an increasing average volume in active trading with a slowly appreciating price in the last several months. Our primary source for obtaining this critical capital has been through our ability to place private investments with accredited investors, for restricted stock from several of our significant long-term shareholders and also from some exercises of warrants and options previously outstanding. In order to fund the required exploration work which began in September 2003 and was completed in November 2003, during the quarter ended December 31, 2003, the company raised $1,036,260 in net proceeds on private transactions involving the Company's restricted common stock. As of February 10, 2004 we have raised an additional $770,557 in net proceeds during the current quarter to end on March 31, 2004. We plan to continue this program of private financing from accredited investors to fund current exploration work and prepare for additional seismic and analysis work in continuance of our high-grade program in preparation for establishing a drilling program later this year. The financial statements in our Annual Report reflected uncertainties regarding our ability to continue as a going concern based upon our significant stockholders deficit and recurring losses. Our stockholders deficit improved from ($589,889) at September 30, 2003 to ($40,890) for December 31, 2003. Management is working on several reclassification projects and settlements of disputes ongoing that carry accrued balances of amounts we do not intend to pay for various legal expenses or negotiating to issue stock for business reasons. For example, SCS paid a liability that it had on the books subsequent to the balance sheet date by issuing stock in full payment. This has 9 resulted in shifting a liability to equity. Our stockholders deficit is improving and we are continuing to help it along by also minimizing our loss and keeping our expenses and overhead low. However, the uncertainty still exists. Also, we have successfully accomplished the minimum work requirement this quarter as discussed above that is a major achievement for us. Should no additional capital be raised it is possible that we would not have the necessary resources to continue as a viable company. If we are able to obtain additional debt or equity financing, we will be able to continue to develop our oil and gas asset and position ourselves for generating revenues in various ways as well as working to begin drilling plans. Management believes that all the additional capital funds raised will substantially enhance our asset value in our oil and gas concession, thus greatly enhancing shareholder value and making it much easier to continue raising the necessary capital to move forward. We also still have significant potential for new service contracts that give us that opportunity to also improve cash flow and earn a profit on future service revenues from our NuData services. With the strategy to continue our efforts to close NuData service contracts and to successfully structure profitable acquisitions, management feels we can significantly improve our cash position in the coming periods while providing additional support to our exploration team to help with our substantial exploration tasks on our concession. We could obtain additional capital also upon the exercise of previously issued in the money outstanding warrants and options for common stock. We have capital lease obligations of $47,367 financing certain electrical equipment in our data center. We also have a contingent $350,000 note payable that is only payable with 25% of the profits of SCS Corporation. We have the right to pay this note off using common stock. We do not plan on using significant debt financing except for the possibility of financing income-producing assets in the future. Finally, we originally purchased a CD in the amount of $436,300, which secured the lease at Westwood with a Letter of Credit arrangement. At the beginning of the quarter, this CD and letter of credit was $283,595 of which $87,260 ($436,300 x 20%) was due to be released to us on November 1, 2003. These funds were received on November 3, 2003 and the new CD and letter of credit is now $196,335. $130,890 ($436,300 x 30%) will be due to be released on November 1, 2004. Thereafter, $65,445 on November 1, 2005. For these reasons above, management believes that very soon we can solve our historical cash flow problems and at the same time continue to greatly enhance shareholder value through continuing to upgrade our primary oil and gas asset. As the reprocessing contract being performed by Spectrum is in process, management is ready upon receipt of the reprocessed new 4,000 kilometers of data to perform a detailed interpretation of the data which we believe will lead us to pinpointing significant prospects to plan additional 3D seismic which could lead us to discovery of significant oil and gas reserves. Item 3 Disclosure controls and procedures Kent P. Watts, our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures are appropriate and effective. He has evaluated these controls and procedures as of a date within 90 days of the filing date of this report on Form 10-QSB. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Part II Other Information ITEM 1. Legal Proceedings None 10 ITEM 2. Changes in Securities We have effected the following transactions in reliance upon exemptions from registration under the Securities Act of 1933 as amended (the "Act") as provided in Section 4(2) thereof. Each certificate issued for unregistered securities contained a legend stating that the securities have not been registered under the Act and setting forth the restrictions on the transferability and the sale of the securities. No underwriter participated in, nor did we pay any commissions or fees to any underwriter in connection with any of these transactions. None of the transactions involved a public offering. We believe that each person had knowledge and experience in financial and business matters which allowed them to evaluate the merits and risks of our securities. We believe that each person was knowledgeable about our operations and financial condition. During December 2003, an investor purchased 2-1/2 units consisting of 2-1/2 shares of SCS Corporation's (our wholly owned subsidiary) Series A Preferred Stock and warrants to purchase 125,000 shares of Hyperdynamics common stock at $.25 per share for $250,000. This was a private placement made in reliance on Section 4(2) of the Act. During October, November, and December 2003, 22 investors purchased 1,328,454 shares of Hyperdynamics common stock and warrants to purchase 391,503 shares of Hyperdynamics common stock with a strike price of $2.00 per share, expiring three years from the date of issue, for $926,400. This was a private placement made in reliance of Section 4(2) of the Act. In December 2003, Hyperdynamics delivered 1,227,764 shares to two of Hyperdynamics' officer/directors pursuant to the terms and conditions of the conversion option of Convertible Notes Payable, due December 31, 2007. This was a private placement made in reliance of Section 4(2) of the Act. Item 6 Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 31.1 - Certification of Chief Executive Officer of HyperDynamics Corporation required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 31.2 - Certification of Chief Financial Officer of HyperDynamics Corporation required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 32.1 - Certification of Chief Executive Officer of HyperDynamics Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63. Exhibit 32.2 - Certification of Chief Financial Officer of HyperDynamics Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63. (b) Reports on Form 8-K None Signature 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 thereunto duly HyperDynamics Corporation (Registrant) By: /s/ Kent Watts -------------------- 11 Kent Watts, Chairman of the Board, Chief Executive Officer, and Chief Accounting Officer Dated: February 23, 2004 12