SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 1, 1997
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(Date of earliest event reported)
Bion Environmental Technologies, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Colorado 0-19333 84-1176672
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(State of (Commission (I.R.S. Employer
Incorporation) File No.) Identification No.)
555 17th Street, Suite 3310, Denver, Colorado 80202
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(Address and Zip Code of Principal Executive Offices)
Registrant's telephone number including area code: (303) 294-0750
ITEM 5. OTHER EVENTS.
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(A) On December 1, 1997, Bion Environmental Technologies, Inc. (which along
with its subsidiaries is referred to as the "Registrant" or the "Company")
signed new Employment Agreements (the "Agreements") with Jon Northrop, C.E.O.,
Jere Northrop, President, and M. Duane Stutzman, C.F.O., replacing previously
existing employment agreements which were due to expire on December 31, 1997
for Mr. Stutzman and March 31, 1998 for Messrs. Northrop. All terms of the
Agreements are essentially the same as the previously existing agreements
except that the employment period is extended until December 31, 2002. Copies
of the Agreements are attached hereto as Exhibits 10.1, 10.2, and 10.3,
respectively.
(B) On January 9, 1998 the Registrant signed a contract for the design,
permitting, and construction of its patented Bion NMS' animal waste treatment
system to retrofit a 3,650 sow farm in Knox County, Illinois. This retrofit
to an existing lagoon based treatment system represents Bion's first expansion
into Illinois.
(C) On December 31, 1997, the Registrant executed a Closing
Memorandum/Addendum #3 (the "Memorandum") with Bowman Family Farms, Inc. and
Crystal Springs Farms, LLC (collectively "BFF") which is the third amendment
to the agreement and addendum between Registrant and BFF dated October 8, 1997
as amended November 13, 1997 and November 30, 1997 (collectively the
"Agreement")(see the agreement and addendum attached as Exhibit 10-1 to the
Registrant's September 30, 1997 Form 8-K). The Memorandum sets forth that: 1)
in consideration of payments made by BFF to Registrant the Agreement is now
binding on Registrant and BFF; 2) the appointment of Michael Bowman as a
director of Registrant shall be accomplished upon completion of all payments
required by paragraph 5 A.i of the Agreement; 3) as well as numerous other
matters related to the project contemplated in the Agreement. A copy of the
Memorandum is attached hereto as Exhibit 10.4, and the Agreement is
incorporated in Exhibit 10.4 by reference.
(D) On December 1, 1997 the Registrant issued a bonus to M. Duane
Stutzman, CFO, consisting of 20,000 class H6 Warrants (to purchase restricted
and legended shares of Registrant's common stock at a price of $10.00 per
share exercisable from September 15, 1998 through December 31, 2001), 10,000
class H7 Warrants (to purchase restricted and legended shares of Registrant's
common stock at a price of $12.50 per share exercisable from September 15,
1999 through December 31, 2001), and 10,000 class H8 Warrants (to purchase
restricted and legended shares of Registrant's common stock at a price of
$15.00 per share exercisable from September 15, 1999 through December 31,
2001).
(E) Effective January 1, 1998, the parties to that certain Voting Agreement
(the "Voting Agreement") (see Registrant's Form 8-K dated May 19, 1997) agreed
that such Voting Agreement is amended so that only shares currently owned
(which totalled 4,007,797 in aggregate out of 8,559,455 total shares
outstanding on January 1, 1998) by or that may be issued in the future to
LoTayLingKyur, Inc. and Dublin Holding, Ltd. are to be voted by Jon Northrop,
Registrant's C.E.O., and that the Voting Agreement shall expire on June 30,
1999 absent any renewal or extension.
(F) Effective January 1, 1998, holders of 84% of the Registrant's common
stock (post transaction) participated in an exchange transaction (the
"Exchange") conducted pursuant to Section 351 of the Internal Revenue Code of
1986 as amended that resulted in the exchange of 7,463,012 warrants of various
classes for 4,351,348 shares of restricted stock and 2,832,909 Class Z
Warrants to purchase shares of the Registrant's common stock at $15.00 per
share for a 24 month period commencing January 1, 2000. The Exchange was the
result of negotiations that were initiated in response to a proposal made by
certain warrant holders on November 23, 1997, and finalized on December 24,
1997 (see Exhibit 2.1 attached hereto for the Exchange offer memorandum).
Schedules detailing the calculations for the Exchange, the warrants exchanged,
warrants outstanding after the Exchange, and outstanding options as of January
1, 1998 are contained in Exhibits 99.1, 99.2, 99.3, and 99.4 respectively
hereto. Registrant has prepared the following analysis of its capital
structure on January 2, 1998 following the Exchange:
Common Stock:
Issued and outstanding 8,559,455 1,2
Options 3
Vested 144,460
Not Vested 79,212
Warrants 4
Vested 3,129,836
Not Vested 11,250
1 This is an increase from December 31, 1997 of 4,539,586 shares, 4,351,348 of
which are as a result of the Exchange, and 188,238 of which result from the
issuance of shares previously subscribed.
2 The Registrant currently is obligated to pay $130,000 under the terms of a
convertible credit facility with a shareholder which, if converted, would
result in the issuance of 28,889 shares of restricted Common Stock as payment
in full of the obligation. (See 8-K dated December 1, 1996). If the note is
converted into stock, it would result in the Company having 8,588,344 shares
of Common Stock outstanding.
3 See Exhibit 99.4 hereto for a detailed listing of the options.
4 See Exhibit 99.3 hereto for a detailed listing of the warrants.
Following completion of the Exchange the ownership positions of all officers
and/or owners of 5% or more of the common stock of the Registrant are as
follows:
Name of Holder Shares Owned Z Warrants Owned
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Dublin Holding, Ltd. 2,500,790 1,141,003
LoTayLingKyur, Inc. 1,507,007 267,589
Jere Northrop 694,040 356,528
Jon Northrop 672,367 350,556
Mark Smith and Kelly Moone 519,822 216,486
Duane Stutzman 133,820 65,259
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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a) Financial Statements None
b) Pro forma Financial Information None
c) Index to Exhibits
2.1: Exchange offer memorandum dated December 24, 1997.
10.1: Employment Agreement for Jon Northrop, CEO, dated December 1,
1997.
10.2: Employment Agreement for Jere Northrop, President, dated
December 1, 1997.
10.3: Employment Agreement for M. Duane Stutzman, CFO, dated
December 1, 1997.
10.4: Closing Memorandum/Addendum #3 between Bion Tech-nologies,
Inc. and Bowman Family Farms, Inc. and Crystal Springs
Farms, LLC dated December 31, 1997.
99.1: Schedule detailing calculations for Exchange offer dated
December 24, 1997, to be effective January 1, 1998.
99.2: Schedule detailing warrants to be exchanged in Exchange offer
dated December 24, 1997, to be effective January 1,
1998.
99.3: Schedule detailing warrants outstanding after Exchange
transaction was completed on January 1, 1998.
99.4: Schedule detailing options outstanding on January 1, 1998.
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.
BION ENVIRONMENTAL TECHNOLOGIES, INC.
Date: January 27, 1998 By: /s/ Jon Northrop
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Jon Northrop,
Chief Executive Officer