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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 Earliest Event Reported: August 17, 2000
ENVIRONMENTAL SAFEGUARDS, INC.
(Exact name of registrant as specified in its charter)
Nevada 000-21953 87-0429198
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or organization) Identification No.)
2600 South Loop West, Suite 645
Houston, Texas 77054
(Address of principal executive offices, including zip code)
(713) 641-3838
(Registrant's telephone number, including area code)
Item 5. Other Events
On August 17, 2000 we reached an Agreement in principal (the
"Agreement") with certain of our creditors who are also holders of our Series C
Preferred Stock. We anticipate closing the transactions contemplated by the
Agreement before September 4, 2000. In 1997 and 1998, these creditors loaned us
an aggregate of $11,000,000 (the "Loan") and purchased from us an aggregate of
$4,000,000 of stated value of our Series C Preferred Stock.
Pursuant to the Agreement:
(a) The principal and interest payment on the Loan originally due on
September 4, 2000 will be deferred until March 4, 2001. This deferred
amount is $690,970.
(b) The principal payment on the Loan originally due on December 4, 2000
will be deferred until June 4, 2001. This deferred amount is $540,642.
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(c) The dividend on the Series C Preferred Stock originally due on October
1, 2000 will be deferred until April 1, 2001. This deferred amount is
$112,444.
(d) As part of the Agreement, the Series C Preferred Stock (presently
non-convertible) will be exchanged for a new security of equal stated
value to be designated as our Series D Convertible Preferred Stock.
Each holder of shares of Series D Convertible Preferred Stock will be
able to convert such shares, plus all dividends accrued and unpaid on
such Series D Convertible Preferred Stock up to the conversion date
into fully paid and non-assessable shares of our common stock. The
Series D Convertible Preferred Stock will be convertible into our
Common Stock as follows: (i) during the period beginning on the date of
the issuance of the Series D Convertible Preferred Stock through
December 31, 2002, the Series D Convertible Preferred Stock will be
convertible into shares of our Common Stock at a conversion price of
$2.25 per share of Common Stock; and (ii) beginning on January 1, 2003
and thereafter, the Series D Convertible Preferred Stock will be
convertible into shares of our common stock at a conversion price of
$1.00 per share of common stock. Further, in the event that we default
on any provisions of the Loan, then the Series D Convertible Preferred
Stock will be convertible into shares of our common stock at a
conversion price of the lesser of $1.00 per share or the average of the
trailing 30 day closing price of our common stock as calculated on the
day of a Loan default.
(e) All of the deferred amounts bear interest at the Loan's regular rate of
interest which is prime plus one and one-half percent. The Agreement
also sets forth that there are no late fees in connection with any of
the deferred amounts.
EXHIBITS
10.1 Agreement in principal
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.
ENVIRONMENTAL SAFEGUARDS, INC.
By: /s/ James S. Percell
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Date: August 28, 2000 James S. Percell, President
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EXHIBIT INDEX
Exhibit No. Description
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10.1 Agreement in Principle