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) May 16, 2007
THE BEARD COMPANY
(Exact name of registrant as specified in its charter)
Oklahoma | 1-12396 | 73-0970298 |
(State or other jurisdiction
of incorporation) | (Commission
File Number) | (IRS Employer
Identification No.) |
Enterprise Plaza
5600 N. May Avenue
Suite 320
Oklahoma City, Oklahoma 73112
(Address of principal executive offices) (Zip Code)
(405) 842-2333
(Registrant's telephone number, including area code)
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:
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b)) |
[ ] | 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)) |
Information to be Included in the Report:
Item 1.01 Entry into a Material Definitive Agreement
Background. Beard Pinnacle, LLC (“BP”) was formed by Beard Technologies, Inc. (“BTI”) to construct and operate a pond fines recovery facility (the “Project”) located at the Smith Branch Coal Refuse Disposal Facility of Pinnacle Mining Company, LLC (“PMC”). BTI and PinnOak Resources, LLC (“PinnOak”), the sole member of PMC, reached an understanding regarding the initial equity funding of BP and its development and operation of the Project. Construction of the Project commenced in September of 2005.
While the Project was under construction a number of agreements were executed between BTI, PinnOak and various PinnOak affiliates. Effective as of October 31, 2006 certain PinnOak affiliates (the “Group”) exercised their ownership and control option under one of the agreements. As a result, the Group’s membership interest in BP increased from 50% to 75%, BTI’s membership interest decreased from 50% to 25%, and BP ceased to be a consolidated entity of the Company.
To date PinnOak has advanced more than $14,150,000 to BP to finance the construction of the Project. $2,800,000 of the PinnOak advances were converted by the Group to equity in BP. As a result, the PinnOak loans to BP amounted to more than $11,350,000. These loans were guaranteed by BTI and secured by BTI’s remaining 25% membership interest in BP.
Separation Agreement. Because of cost over-runs of more than $3,000,000 on the Project and the low rate of production achieved during the ramp-up period, BTI agreed with PinnOak to terminate most of the existing agreements governing the Project and to give up its remaining 25% interest in BP, while remaining as the contract operator for the Project. A Separation Agreement was executed by BTI on May 11, 2007 and received back from PinnOak on May 16, 2007. A copy of the agreement is attached hereto as Exhibit 99.1.
On May 18, 2007 we issued a press release advising of the change of ownership in the Project and release of liability under the guaranty. A copy of the press release is attached hereto as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed with this Form 8-K and are identified by the numbers indicated:
99.1 | Separation Agreement dated May 11, 2007 |
99.2 | Press Release dated May 18, 2007 |
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.
May 18, 2007
EXHIBIT INDEX
Exhibit No. | Description | Method of Filing |
| | |
99.1 | Separation Agreement dated May 11, 2007 | Filed herewith electronically |
| | |
99.2 | Press Release dated May 18, 2007 | Filed herewith electronically |
