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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 14(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: September 30, 1999
EXACT NAME OF REGISTRANT: AMARILLO BIOSCIENCES, INC. (the "Company")
STATE OR OTHER JURISDICTION OF INCORPORATION: Texas
COMMISSION FILE NUMBER: 0-20791
IRS EMPLOYER IDENTIFICATION NUMBER: 75-1974352
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES: 800 W. 9th, Amarillo, Texas 79101
REGISTRANT'S TELEPHONE NUMBER: 806/376-1741
ITEM 5:
On September 30,1999, the Company entered into an Agreement
with Hayashibara Biochemical Laboratories, Inc., a Japanese corporation ("HBL").
Under this Agreement, HBL will convert existing debt to equity, and will
purchase additional equity in stages. On October 15, 1999, HBL will release
$1,005,486.30 in debt owed by the Company in exchange for shares of common stock
to be issued by the Company. On November 30, 1999, HBL will advance to the
Company $1,000,000, and the Company will issue common stock to HBL. On February
29, 2000, HBL will advance $1,000,000 to the Company, and the Company will issue
common stock to HBL.
The precise number of shares to be issued on each of the above
dates is not known at this time, as it is to be determined based on the market
price preceding the date of issuance. The precise formula is set out in the
Agreement, which is attached as an exhibit.
HBL currently owns 2,178,950 shares out of 6,360,326
outstanding, for an ownership share of 34.3%. As of the date immediately
preceding the date of this report, the closing price of the Company's common
stock was $.75 per share. If this price were to remain constant, HBL would
eventually acquire approximately 59.6% of the common stock of the Company.
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ITEM 7:
Exhibit Index
10.36 Agreement to Convert Debt dated September 30, 1999, between
Hayashibara Biochemical Laboratories, Inc. and the Company.
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.
Date: September 30, 1999.
AMARILLO BIOSCIENCES, INC.
By: /s/ EDWARD L. MORRIS
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Edward L. Morris, Secretary
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
10.36 Agreement to Convert Debt dated September 30, 1999, between
Hayashibara Biochemical Laboratories, Inc. and the Company.
</TABLE>
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EXHIBIT 10.36
AGREEMENT TO CONVERT DEBT
THIS AGREEMENT TO CONVERT DEBT ("Agreement") is entered into
as of this the 30th day of September, 1999, by and between AMARILLO BIOSCIENCES,
INC., a Texas corporation ("ABI"), and HAYASHIBARA BIOCHEMICAL LABORATORIES,
INC., a corporation organized under the laws of Japan ("HBL").
WHEREAS, ABI is currently indebted to HBL under a promissory
note dated July 22, 1999, having a principal amount of three million dollars
($3,000,000) to be advanced in three (3) installments as follows: one million
dollars ($1,000,000) by August 31, 1999, one million dollars ($1,000,000) by
November 30, 1999, and one million dollars ($1,000,000) by February 29, 2000
(hereinafter, the "Note"); and bearing interest at the rate of four and one-half
percent (4 1/2%) per annum; and further
WHEREAS, it is the desire and intention of both ABI and HBL
that the Note be converted to common stock in ABI, under the terms and
conditions hereinafter set forth;
THEREFORE, in consideration of these presents and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
As used in this agreement, the term Market Price shall refer
to the average daily closing price per share of ABI common stock, weighted by
the total daily volume, as recorded on the NASDAQ Smallcap Market and reported
on the NASDAQ web site (www.nasdaq.com), for the ten (10) trading days
immediately preceding the date on which the Market Price is determined.
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Effective October 15, 1999 ("Effective Date"), the Note shall
be canceled and HBL shall be entitled to receive newly issued shares of ABI
common stock (the "Shares"), in consideration for the cancellation of the Note
and promises by HBL to advance funds in the future, as follows:
1. On the Effective Date, ABI shall issue to HBL a number of
Shares equal to the outstanding debt owed by ABI to HBL under the Note as of the
Effective date, divided by the Market Price of the Shares as of the Effective
Date, rounded up to the next whole Share, which issuance shall constitute full
payment of all amounts owed under the Note as of the Effective Date. The parties
agree and stipulate that the accrued interest payable under the Note is
$5,486.30 as of the Effective Date, and that the total outstanding debt owed by
ABI to HBL under the Note (principal plus interest) is $1,005,486.30 as of the
Effective Date.
2. On November 30, 1999, HBL shall advance to ABI one million
dollars ($1,000,000), and ABI shall issue to HBL a number of Shares equal to one
million dollars ($1,000,000) divided by the Market Price of the Shares as of
November 30, 1999, rounded up to the next whole Share.
3. On February 29, 2000, HBL shall advance to ABI one million
dollars ($1,000,000), and ABI shall issue to HBL a number of Shares equal to one
million dollars ($1,000,000) divided by the Market Price of the Shares as of
February 29, 2000, rounded up to the next whole Share.
Whenever ABI is required to issue Shares under this Agreement,
ABI will, on that date, initiate a request with its transfer agent, American
Stock Transfer & Trust Company of New York City, New York, to issue to HBL the
number of shares determined pursuant to this Agreement.
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4. HBL acknowledges that the Shares issued to it will be
"restricted stock" within the meaning of Rule 144 promulgated under the U.S.
Securities act of 1933, that they must be held for one (1) year before they can
be resold under such Rule, that all sales pursuant to such Rule must comply with
the volume limitations and other applicable conditions of such Rule, and that
the certificates evidencing such Shares, as issued to HBL, shall bear an
appropriate legend identifying the Shares as "restricted stock".
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
ABI: HBL:
AMARILLO BIOSCIENCES, INC. HAYASHIBARA BIOCHEMICAL
LABORATORIES, INC.
By: By:
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Joseph M. Cummins, Ken Hayashibara, President
President
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