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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
June 30, 2000
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(Date of Report: Date of earliest event reported)
INDUSTRIAL ECOSYSTEMS, INC.
(Exact name of registrant as specified in its charter)
UTAH 0-29838 94-3200034
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(State or other jurisdiction (Commission File Number) (IRS Employer ID No.)
of incorporation)
2040 West Broadway, Bloomfield, New Mexico 87413
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(Address of principal executive office)
Registrant's telephone number, including area code: (505) 632-1786
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ITEM 5. OTHER EVENTS
On June 30, 2000 (the "Effective Date"), Industrial Ecosystems, Inc., (the
"Company") signed an Agreement of Merger with ROP Merger Corp., a Missouri
corporation, in order to accomplish the transactions contemplated in a Rights
Agreement dated December 31, 1998, wherein JFJ Ecosystems, LLC ("JFJ"), the
Company's joint venture partner, had the right on or prior to December 31,
2000 to sell its 50% membership interest in the joint venture, ROP North
America, LLC (the "JV") to the Company through a share exchange, wherein the
Company would issue to JFJ shares of the Company's restricted Common Stock in
exchange for JFJ's membership interest in the JV (the "Sale Rights"). On
January 26, 2000, JFJ gave the Company written notice of its intent to
exercise its Sale Rights.
In consideration for JFJ exercising its Sale Rights, JFJ received a total of
17,107,408 shares of the Company's Common Stock, plus an option to acquire an
additional 2,261,334 shares of Common Stock at an exercise price of $0.09 per
share, the five day trailing average of the Company's stock prior to the
Effective Date.
In exchange for the shares and options:
1. The Company received all of JFJ's interest in the JV, and the resulting
wholly-owned subsidiary was merged into the Company;
2. JFJ converted its loan of $750,000 and accrued interest (advanced to the
Company in connection with the Rights Agreement); and
3. JFJ converted an additional $57,695 in principal and interest loaned to
the JV.
The Agreement of Merger also provided for the issuance of 1,592,522 shares to
John P. Crowe, an affiliate of the Company and a principal of JFJ, in
settlement of a total of $191,550 in principal and interest loaned to the JV.
Prior to the Effective Date, the Company had 45,900,683 shares issued and
outstanding. Following the Effective Date the Company had 64,600,613 shares
issued and outstanding. The beneficial ownership following the Effective Date
for JFJ and John P. Crowe appears in the following table.
% of Class
Assuming the
Beneficial Exercise of Individual
Class Name and Address Ownership Options or Warrants
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Common JFJ Ecosystems, LLC 19,368,742 (1) 28.97 (2)
1015 West 54th Street
Kansas City, MO 64112
Common John P. Crowe 31,449,581 (3) 48.08 (4)
1015 West 54th Street
Kansas City, MO 64112
(1) Represents 17,107,408 shares and 2,261,334 options to purchase shares at
an exercise price of $0.09 per share exercisable through 6/30/05.
(2) Assumes the exercise of JFJ's options and the concomitant increase in the
number of shares issued and outstanding
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(3) Represents 8,844,411 shares and 4,500,000 warrants for shares held by John
P. Crowe, 833,333 shares held by Four C's Development, LLC, an entity
controlled by John P. Crowe, plus the shares and options issued to JFJ
Ecosystems, LLC, of which John Crowe may be deemed to have indirect beneficial
ownership because he is a principal Member and Manager of JFJ.
(4) Assumes the exercise of JFJ's options and John Crowe's warrants and the
concomitant increase in the number of shares issued and outstanding.
The Rights Agreement and the essential provisions of the transaction were
approved by the Company's shareholders at a Special Meeting of Shareholders
called for that purpose on April 19, 1999. Details of the Rights Agreement
and the provisions under which JFJ exercised its Sale Rights are included in
the Company's annual report on Form 10KSB for the period ended December 31,
1999, filed with the Securities and Exchange Commission on April 12, 2000.
The complete Agreement of Merger, which details the share and option issuances
outlined above, is included as an Exhibit to this filing.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS, AND
EXHIBITS
(a)(1) Financial Statements of Business Acquired.
The financial statements required be to filed pursuant to this
subsection will be supplied when available, but not later than 60 days from
the date of this filing.
(b)(1) Pro Forma Financial Statements.
The pro forma financial statements required be to filed pursuant to this
subsection will be supplied when available, but not later than 60 days from
the date of this filing.
(c) Exhibits. The following exhibits are included as part of this report:
SEC
Exhibit Reference
Number Number Title of Document Location
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1 2.01 Agreement of Merger This Filing
dated June 30, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunder duly authorized.
INDUSTRIAL ECOSYSTEMS, INC.
Date: July 14, 2000 /S/Tom Jarnagin, President
