<PAGE>
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): August 1, 2000
BIOGAN INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-23489 58-1832055
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
7213 POTOMAC DRIVE
BOISE, IDAHO 83704
(Address of Principal Executive Offices)
(208) 376-8500
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Effective as of January 27, 2000, Biogan International, Inc. (the
"Company") entered into a Cooperative Joint Venture Contract (the "Joint Venture
Contract") with Hechi Industrial Co., Ltd., a private mining company organized
under the laws of the People's Republic of China ("Hechi"), to provide for the
formation of a Chinese cooperative joint venture called Guanghe Metals Co., Ltd.
(the "Joint Venture").
In connection with the formation of the Joint Venture, the Company and
Hechi executed an Asset Purchase Agreement on August 1, 2000, which agreement
was dated effective as of July 1, 2000 (the "Asset Purchase Agreement"). The
Asset Purchase Agreement provides for the acquisition by the Company of certain
of the assets and assumption of certain of the liabilities of Hechi in exchange
for the issuance to the shareholders of Hechi, consisting of approximately 300
individuals, of an aggregate of 31,300 shares of Series A Convertible Preferred
Stock and 16,800,000 shares of Common Stock of the Company. The assets purchased
and liabilities assumed from Hechi consist of a 9% interest in the Gaofeng
Mining Co., Ltd., a 70% interest in the Guizhou Louxia Coal Co., Ltd., and all
of the assets and liabilities of six operating divisions of Hechi as follows:
the Hechi Copper Refinery, the Non-Ferrous Metals Trading Company, the Wuxu
Mine, the Transportation Company, the Coal Company, and the Stone Computer
Information Company.
The Asset Purchase Agreement additionally sets forth the intent of the
parties that the Board of Directors of the Company be comprised of seven
members, three of whom have been proposed by Gilles LaVerdiere, the President
and Chief Executive Officer of the Company, and four of whom have been proposed
by Hechi. Mr. LaVerdiere and the shareholders of Hechi have agreed to vote their
shares of capital stock of the Company for a period of three years in favor of
the election of directors to effectuate this composition of the Board.
On August 1, 2000, the Company filed with the Delaware Secretary of
State an Amended Certificate of Designations of Series A Convertible Stock which
fixed, altered and amended the rights, preferences, privileges and restrictions
relating to the Series A Convertible Preferred Stock. Each share of Series A
Convertible Preferred Stock is convertible, at the option of the holder at any
time after September 30, 2000, into 12,000 shares of the Company's Common Stock.
The shares of Series A Convertible Preferred Stock and Common Stock were issued
by the Company upon the execution of the Asset Purchase Agreement on August 1,
2000.
On August 14, 2000, 130,986,710 shares of the Company's Common Stock
were issued and outstanding (including 28,800,000 shares of Common Stock
currently being held in escrow as security for the Company's obligations under
its 8% Secured Convertible Debentures Due 2002), and 31,300 shares of Series A
Convertible Preferred Stock were issued and outstanding. As a result of the
transactions with Hechi, the recipients of the Company's capital stock in such
transactions collectively beneficially own approximately 12.8% of the issued and
outstanding shares of Common Stock of the Company as of August 14, 2000 and
collectively own 100% of the issued and outstanding shares of Series A
Convertible Preferred Stock. On an as-converted basis, such individuals
beneficially own approximately 77.5% of the issued and outstanding capital stock
of the Company.
Consequently, the shareholders of Hechi collectively have sufficient
voting power to control the outcome of all corporate matters submitted to the
vote of the Company's stockholders. Those matters could include the election of
directors, changes in the size and composition of the Board of Directors (and,
thereby, the qualification and appointment of officers of the Company), and
mergers and other business combinations involving the Company. In addition,
through Hechi's control of the Board of Directors and collective voting power,
the shareholders of Hechi may be able to control certain decisions, including
decisions with respect to the Company's dividend policy, access to capital
(including borrowing from third-party lenders and the issuance of additional
equity securities), and the acquisition or disposition of assets by the Company.
In addition, the concentration of voting power could have the effect of delaying
or preventing a change in control of the Company and may affect the market price
of the Company's Common Stock.
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to the terms of the Asset Purchase Agreement executed on
August 1, 2000, the Company acquired, effective as of July 1, 2000, certain of
the assets and assumed certain of the liabilities of Hechi consisting of a 9%
interest in the Gaofeng Mining Co., Ltd., a 70% interest in the Guizhou Louxia
Coal Co., Ltd., and all of the assets and liabilities of six operating divisions
of Hechi as follows: the Hechi Copper Refinery, the Non-Ferrous Metals Trading
Company, the Wuxu Mine, the Transportation Company, the Coal Company, and the
Stone Computer Information Company. All of the assets relate to the mining and
refining operations of Hechi.
Hechi is a private mining company organized under the laws of the
People's Republic of China. Hechi engages in the mining, refining and trading of
base metal products in the Guangxi Autonomous Region of China. The Company
intends to use the acquired assets for the same purposes for which they were
used by Hechi.
The purchase price for the acquisition consisted of the issuance of
31,300 shares of Series A Convertible Preferred Stock of the Company and
16,800,000 shares of Common Stock of the Company. In addition, in accordance
with the terms of the Joint Venture Contract and the Asset Purchase Agreement,
the Company contributed all of the assets acquired and liabilities assumed from
Hechi to the Joint Venture in exchange for a 95% interest in the profits and
loss of the Joint Venture, and a 92% interest in the remaining assets of the
Joint Venture upon any liquidation or dissolution of the Joint Venture.
The acquisition is expected to be accounted for using the purchase
method of accounting. The purchase price was approximately $80.6 million. The
acquisition was funded through use of the Company's Common Stock and Series A
Convertible Preferred Stock. In determining the purchase price for Hechi, the
Company took into account the value of companies of similar industry and size to
Hechi, comparable transactions and the market for such companies generally.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired
It is impracticable to provide the required financial statements
for the acquired business at the time this Form 8-K is filed. The registrant
shall file the required financial statements under cover of Form 8-K/A on or
before October 15, 2000.
(b) Pro Forma Financial Information
To be provided on or before October 15, 2000.
(c) Exhibits
2.1 Asset Purchase Agreement dated effective as of July
1, 2000 by and between the Company and Hechi.
10.1 Cooperative Joint Venture Contract for Guangxi Metals
Co., Ltd. dated January 27, 2000 by and between the
Company and Hechi.
99.1 Articles of Association of Guangxi Guanghe Metals
Co., Ltd.
<PAGE>
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.
BIOGAN INTERNATIONAL, INC.
Date: August 15, 2000 By: /s/ Gilles LaVerdiere
----------------------------------
Gilles LaVerdiere, Chief Executive
Officer and President
<PAGE>
Exhibit Index
-------------
Exhibit 2.1 Asset Purchase Agreement dated effective as of July 1, 2000 by
and between the Company and Hechi.
Exhibit 10.1 Cooperative Joint Venture Contract for Guangxi Metals Co.,
Ltd. dated January 27, 2000 by and between the Company and
Hechi.
Exhibit 99.1 Articles of Association of Guangxi Guanghe Metals Co., Ltd.
