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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): June 29, 2000
WHITNEY AMERICAN CORPORATION
(Exact name of registrant as specified in charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
0-22907 54-1956957
(Commission File Number) (I.R.S. Employer Identification Number)
8150 Leesburg Pike, Suite 1200, Vienna, Virginia 22182
(703) 893-0582
(Registrant's telephone number, including area code)
(703) 893-5636
(Registrant's facsimile number, including area code)
Item 5. Other Events
On June 29, 2000, Whitney American Corporation, a Delaware corporation,
("Whitney"), Kemron Environmental Services, Inc., a New York
corporation,("Kemron"), a wholly owned subsidiary of Whitney and Kiber
Environmental Services, Inc., a Georgia corporation, ("Kiber"), Juan J.
Gutierrez, the majority shareholder of Whitney, Katherine Tracy Bergquist-
Kingham and Neville Kingham, both shareholders of Kiber entered into a merger
agreement ("Agreement"). The Agreement contemplates a tax-free merger of Kiber
with and into Kemron in a reorganization described in section 368(a) and
368(a)(i)(D) of the Internal Revenue Code of 1986, as amended (the "Code").
The Agreement calls for the shareholders of Kiber to receive a total of 200,810
shares of capital stock in Whitney and $450,000 in exchange for all of the
capital stock of Kiber. The $450,000, paid at closing, consisted of $300,000 in
cash and a promissory note for $150,000, payable in twelve months and earning
interest at ten percent (10%). The promissory note is personally guaranteed by
Juan J. Gutierrez.
Kiber is an environmental services company based in Atlanta, Georgia. The
company is considered a strong compliment to Kemron's current business, as Kiber
performs similar consulting services but to a unique client base. Kemron can
market its other services to many of these existing clients and cultivate
additional business. The consulting operation of Kiber will be integrated into
the current consulting operation of Kemron's Atlanta office. In addition, Kiber
has a laboratory operation, nationally recognized for conducting treatability
studies. This treatability lab will be a separate business segment of Kemron.
It is the belief of both Kemron's and Kiber's management that this merger will
create some rewarding opportunities to expand the overall services with much of
the core clients of each company.
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Kiber has experienced a steady revenue base over the last three years and has
stabilized its operating income after incurring a small loss in the fiscal year
ended December 31, 1998. Kiber's financial statements have been audited for the
most recent fiscal year ended December 31, 1999 only; the fiscal year 1998 is
unaudited. On a consolidated basis, Kiber's revenues for fiscal year ended
December 31, 1999 represent approximately 12% of the total revenues of the
combined consolidated companies.
<TABLE>
<CAPTION>
Statement of Income:
Year ended December 31,
1999 1998
(audited) (unaudited)
<S> <C> <C>
Net sales $1,376,330 $1,327,036
Cost of sales 339,052 400,775
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Gross profit 1,037,278 926,261
General, administrative, and selling expenses 918,975 963,663
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Income (loss) from operations 118,303 (37,402)
Financial income and (expense), net (4,029) (29,243)
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Net income (loss) $ 114,274 $ (66,645)
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</TABLE>
Balance sheet as of December 31, 1999 (audited):
<TABLE>
<CAPTION>
<S> <C>
Cash $ 26,128
Accounts Receivable 594,020
Prepaid and Other Assets 61,349
Fixed Assets 141,373
Total Assets $822,870
A/P and payroll related $ 39,104
Line and Notes Payable 236,713
Equity 547,053
Total Liab & Equity $822,870
</TABLE>
CHANGE OF MANAGEMENT
There will be no change in the management of Whitney. Neville Kingham and
Katherine Tracy Bergquist-Kingham, however, are considered critical to the
success of the continuing Kiber operations. Therefore, both individuals have
joined the senior management staff of Kemron as vice presidents. Mr. Kingham
will be responsible for the operational management of the treatability
laboratory while Ms. Bergquist-Kingham will support the company with business
development and marketing, both domestic and international. In addition, Ms.
Bergquist-Kingham has been elected to the board of directors of Whitney.
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Issuance of Shares
Prior to the consummation of this agreement, Whitney has an aggregate of
4,217,020 common shares issued and outstanding. After consummating the
agreement, Whitney shares issued and outstanding will equal 4,417,830.
Dated: July 14, 2000
Whitney American Corporation
By /s/ Juan J. Gutierrez
Chairman of the Board and Chief Executive Officer
