BION ENVIRONMENTAL TECHNOLOGIES, INC.
18 East 50th Street, 10th Floor
New York, New York 10022
(212) 758-6622
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 1, 2002
TO THE SHAREHOLDERS OF BION ENVIRONMENTAL TECHNOLOGIES, INC.:
NOTICE HEREBY IS GIVEN that a Special Meeting of Shareholders of Bion
Environmental Technologies, Inc., a Colorado corporation (the "Company"), will
be held at the Company's headquarters at 18 East 50th Street, 10th Floor, New
York, New York, on Monday, July 1, 2002, at 10:00 a.m., Eastern Time, and at
any and all adjournments thereof, for the purpose of considering and acting
upon the following matters.
1. The abandonment of a previously approved 1 for 3.5 reverse split and
the approval of a proposed 1 for 10 reverse split of the outstanding shares of
the Company's common stock; and
2. The transaction of such other business as may properly come before
the meeting or any adjournment thereof.
Only holders of the no par value common stock of the Company of record at
the close of business on May 31, 2002, will be entitled to notice of and to
vote at the Meeting or at any adjournment or adjournments thereof. The
proxies are being solicited by the Board of Directors of the Company.
All shareholders, whether or not they expect to attend the Special
Meeting of Shareholders in person, are urged to sign and date the enclosed
Proxy and return it promptly in the enclosed postage-paid envelope which
requires no additional postage if mailed in the United States. The giving of
a proxy will not affect your right to vote in person if you attend the
Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
DAVID J. MITCHELL, PRESIDENT
New York, New York
May 31, 2002
BION ENVIRONMENTAL TECHNOLOGIES, INC.
18 East 50th Street, 10th Floor
New York, New York 10022
(212) 758-6622
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 1, 2002
GENERAL INFORMATION
The enclosed Proxy is solicited by and on behalf of the Board of
Directors of Bion Environmental Technologies, Inc., a Colorado corporation
(the "Company," "we," "us" or "our"), for use at the Company's Special Meeting
of Shareholders to be held at the Company's headquarters at 18 East 50th
Street, 10th Floor, New York, New York, on Monday, July 1, 2002, at 10:00
a.m., Eastern Time, and at any and all adjournments thereof. It is
anticipated that this Proxy Statement and the accompanying Proxy will be
mailed to the Company's shareholders on or about June 5, 2002.
Any person signing and returning the enclosed Proxy may revoke it at any
time before it is voted by giving written notice of such revocation to the
Company, or by voting in person at the Meeting. The expense of soliciting
proxies, including the cost of preparing, assembling and mailing this proxy
material to shareholders, will be borne by the Company. It is anticipated
that solicitations of proxies for the Meeting will be made only by use of the
mails; however, the Company may use the services of its Directors, Officers
and employees to solicit proxies personally or by telephone, without
additional salary or compensation to them. Brokerage houses, custodians,
nominees and fiduciaries will be requested to forward the proxy soliciting
materials to the beneficial owners of the Company's shares held of record by
such persons, and the Company will reimburse such persons for their reasonable
out-of-pocket expenses incurred by them in that connection.
All shares represented by valid proxies will be voted in accordance
therewith at the Meeting.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's
no par value common stock, with each share entitled to one vote. Only
shareholders of record at the close of business on May 31, 2002, are entitled
to notice of and to vote at the Meeting or any adjournment thereof. On May
31, 2002, the Company had 52,843,649 shares of its no par value common stock
outstanding. Centerpoint Corporation, a majority-owned subsidiary, holds
19,000,000 of the shares outstanding. Under Section 7-107-202(2) of the
Colorado Business Corporation Act these shares are not entitled to vote at the
Meeting. As a result, 33,843,649 shares of common stock are entitled to vote
at the Meeting, each of which is entitled to one vote on all matters to be
voted upon at the Meeting.
A majority of the Company's common stock entitled to vote at the Meeting
represented in person or by proxy shall constitute a quorum at the Meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of
the Company's no par value common stock owned beneficially, as of May 31,
2002, by any person, who is known to the Company to be the beneficial owner of
5% or more of such common stock, and, in addition, by each Director of the
Company, Nominee for Director, and Executive Officer and by all Directors,
Nominees for Director and Executive Officers of the Company as a group.
Information as to beneficial ownership is based upon statements furnished to
the Company by such persons.
Percent of Class
----------------------
Name and Address of Amount and Nature of Entitled
Beneficial Owner Beneficial Ownership Outstanding to Vote
------------------- -------------------- ----------- --------
David J. Mitchell 18,860,887(1) 29.8% 42.6%
18 E. 50th Street
10th Floor
New York, NY 10022
Centerpoint Corporation 19,000,000(2) 36.0% --
18 E. 60th Street
10th Floor
New York, NY 10022
Mark A. Smith 7,220,778(3) 13.7% 21.3%
409 Spruce Street
Boulder, CO 80302
Jere Northrop 1,639,792(4) 3.1% 4.9%
1961 Tonawanda Creek Rd.
Amherst, NY 14228
Atlantic Partners LLC 10,373,427(5) 16.4% 23.5%
18 E. 50th Street
10th Floor
New York, NY 10022
LoTayLingKyur Foundation 2,749,288 5.2% 8.1%
409 Spruce Street
Boulder, CO 80302
Dublin Holding, Ltd. 2,853,856 5.4% 8.4%
C/O Amerilawyer, Ltd.
Attn: Lloyd Rodney, Esq.
Harbor House
P.O. Box 120, Grand Turk
Turks & Caicos Isl., B.W.I.
Salvatore J. Zizza 438,003(6) 0.8% 1.3%
810 Seventh Ave., 27th Floor
New York, NY 10019
2
Andrew G. Gould 88,497(7) 0.2% 0.3%
c/o Bion Environmental
Technologies
18 E. 50th Street, 10th Floor
New York, NY 10022
Howard E. Chase 9,000(8) * *
44 Holland Brook Road
Whitehouse Station, NJ 08889
David Fuller 33,333(9) 0.1% 0.1%
18 E. 50th Street, 10th Floor
New York, NY 10022
All Directors, Nominees 21,068,885(10) 33.1% 47.3%
for Director and Executive
Officers as a Group (6
persons)
__________________
* Less than 0.1%
(1) Includes 527,326 shares held by D2 Co., LLC, which is wholly owned by
David Mitchell; 714,356 shares held by a trust for the benefit of D2
Co., LLC; warrants owned by Atlantic Partners LLC, which is wholly
owned by David Mitchell, to purchase 10,373,427 shares of Common stock
exercisable until February 16, 2006; and 30,000 shares underlying bridge
warrants held by D2 Co., LLC. Also includes 20,000 shares held by a
minor child of David Mitchell. Also includes 7,195,778 shares over
which David Mitchell (through D2 Co., LLC) holds voting control through
a voting agreement involving shares beneficially owned by Mark A. Smith
including LoTayLingKyur, Inc. (owned by Mr. Smith and his wife), the
LoTayLingKyur Foundation (operated by Mr. Smith) and Dublin Holding,
Ltd. (voted by Mr. Smith).
(2) Centerpoint Corporation is currently majority-owned by the Company.
Under Colorado law, the shares held by Centerpoint Corporation are not
entitled to vote at the Meeting.
(3) Includes 480,726 shares held jointly by Mark Smith with his wife;
596,822 shares held by Mark A. Smith IRA Rollover; 509,036 shares held
by Kelly Smith IRA Rollover; 2,749,288 shares held by LoTayLingKyur
Foundation which is controlled by Mark Smith; 6,050 shares held by
LoTayLingKyur, Inc. which is owned by Mark A. Smith and his wife;
and 2,853,856 shares held by Dublin Holding, Ltd. ("DHL"). Also
includes 25,000 shares underlying currently exercisable options held
by Mark A. Smith. Mr. Smith disclaims beneficial ownership of the
shares held by DHL. The DHL shares are currently subject to a voting
agreement with D2 Co., LLC, which is owned by David Mitchell. Mr.
Smith acts as agent of DHL for various purposes, including voting the
shares on limited matters not covered by the voting agreement.
(4) Includes 753,952 shares held directly by Jere Northrop; 659,010 shares
held by his wife; and 201,830 shares held by a family trust; and options
to purchase 25,000 shares held by Mr. Northrop. Does not include shares
owned by an adult child of Jere Northrop, 15,080 shares owned by the
Jere and Lynn Northrop Family Foundation, and 79,052 shares owned by the
Jere Northrop Family trust, for each of which Mr. Northrop disclaims
beneficial ownership.
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(5) Atlantic Partners LLC, which is wholly owned by David Mitchell, owns
warrants to purchase 10,373,427 shares of Common stock at $.75 per
share through February 16, 2006.
(6) Includes 218,453 shares held by Mr. Zizza; options held by Mr. Zizza to
purchase 175,000 shares of Common stock at $1.10 per share until
December 31, 2003; shares underlying J1 bridge warrants to purchase
15,000 shares of Common stock at $.60 per share until December 31,
2004; and shares underlying an underlying J1B bridge warrant to purchase
29,550 shares of Common stock at $.75 per share until December 31, 2004.
(7) Includes 11,134 shares held by Mr. Gould; options held by Mr. Gould to
purchase 75,000 shares of Common stock at $.75 per share until December
31, 2003; and 2,363 shares underlying warrants.
(8) Represents shares held by Hollandbrook Group LLC which is controlled
by Mr. Chase.
(9) Includes 5,000 shares held by Mr. Fuller and options to purchase
26,667 shares of Common stock at $1.10 per share until December 31,
2003 and options to purchase 1,666 shares of Common Stock at $1.50 per
share until December 31, 2003.
(10) Includes 10,728,673 shares underlying options and warrants exercisable
within sixty days.
PROPOSED REVERSE STOCK SPLIT
At the Company's Annual Meeting of Shareholders on April 4, 2002, the
shareholders approved a 1 for 3.5 reverse split of the outstanding shares of
the Company's Common stock in connection with the Company's application to
list its Common stock on the American Stock Exchange. One of the requirements
for listing on the American Stock Exchange is that the stock be trading at a
price of at least $3.00 per share. Since the time of the shareholder approval
of the reverse split at the Annual Meeting, the market price of the Company's
stock has declined to a point where the implementation of a reverse split of
the magnitude that was approved would not have the desired effect of meeting
the minimum price requirements of the American Stock Exchange. The Company
has also decided to simultaneously pursue listing on one or more other
exchanges that have minimum market price listing requirements. Accordingly,
the Board of Directors has proposed that the previously authorized 1 for 3.5
share reverse stock split be abandoned in favor of implementing a 1 for 10
share reverse split. There are presently 52,843,649 shares outstanding, and
the reverse split would therefore reduce this number to approximately
5,284,365 shares. No fractional shares would be issued and instead a whole
share would be issued to any shareholder entitled to a fraction of a share.
During the last six months the Company's Common stock has been trading in the
approximate range of $0.50 to $1.66 per share.
The Board of Directors still believes that it is in the best interests of
the Company and its shareholders to pursue a listing on the American Stock
Exchange or some other suitable exchange to provide greater exposure for the
Company in the investment community and to provide greater liquidity for the
Company's shareholders.
In the event that the reverse stock split is not approved by the
Company's shareholders, it is likely that the Company's Common stock will not
be accepted for listing on the American Stock Exchange or any other suitable
exchange. Even if the reverse stock split is approved, there can be no
assurance that any application by the Company for listing on an exchange will
4
be accepted. If no such application is accepted, it is expected that the
Company's Common stock will continue to be quoted on the OTC Bulletin Board.
If the reverse stock split is approved, it will not occur until the
Company receives approval of its listing application by the American Stock
Exchange or some other suitable exchange. If we are advised by the American
Stock Exchange or some other suitable exchange that the Company's application
for listing will not be approved, then the reverse stock split will not occur.
It is anticipated that the reverse stock split would become effective
approximately ten days after the Company receives approval of its listing
application by the American Stock Exchange or some other suitable exchange.
A reverse stock split has no federal income tax consequences in that it
is a non-taxable distribution of the Company's stock under Section 305 of the
Internal Revenue Code. A shareholder's basis in each 10 shares held before
the reverse split will become the basis in one share after the reverse split.
Since no shareholder will be eliminated as the result of the proposed
reverse stock split, shareholders will not be entitled to assert any rights of
appraisal or other similar rights of dissenters under applicable state law.
All shareholders will be treated equally under the proposed reverse stock
split and no member of the Company's management or any of their associates has
any substantial interest in its approval.
Shareholders who, after the reverse split, would hold less than 100
shares of the Company's Common Stock may have difficulty in selling their
shares, or have to pay additional expenses or commissions when selling their
shares.
VOTE REQUIRED FOR APPROVAL; BOARD RECOMMENDATION
The affirmative vote of a majority of the shares represented at the
meeting, in person or by proxy, will be required to approve the proposed
reverse stock split.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was not
aware of any other matter to be presented at the Meeting other than as set
forth herein. However, if any other matters are properly brought before the
Meeting, the shares represented by valid proxies will be voted with respect to
such matters in accordance with the judgment of the persons voting them. A
majority vote of the shares represented at the meeting is necessary to approve
any such matters.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR THE ANNUAL MEETING TO BE HELD IN MARCH 2003
Any proposal by a shareholder intended to be presented at the Company's
Annual Meeting of Shareholders to be held in March 2003 must be received at
the offices of the Company, 18 East 50th Street, 10th Floor, New York, New
York 10022, a reasonable amount of time prior to the meeting in order to be
included in the Company's proxy statement and proxy relating to that meeting.
DAVID J. MITCHELL, PRESIDENT
New York, New York
May 31, 2002
5
P R O X Y
BION ENVIRONMENTAL TECHNOLOGIES, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David J. Mitchell with the power to
appoint a substitute, and hereby authorizes him to represent and to vote as
designated below, all the shares of common stock of Bion Environmental
Technologies, Inc. (the "Company") held of record by the undersigned on May
31, 2002, at the Special Meeting of Shareholders to be held on July 1, 2002,
or any adjournment thereof.
1. The abandonment of a previously approved 1 for 3.5 reverse split and
the approval of a proposed 1 for 10 reverse split of the outstanding shares of
the Company's common stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To transact such other business as may properly come before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN
ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS ABOVE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY WITH RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE
TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE
UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders and Proxy Statement.
Dated: _____________, 2002.
_________________________________________
_________________________________________
Signature(s) of Shareholder(s)
Signature(s) should agree with the name(s) stenciled hereon. Executors,
administrators, trustees, guardians and attorneys should indicate when
signing. Attorneys should submit powers of attorney.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BION
ENVIRONMENTAL TECHNOLOGIES, INC. PLEASE SIGN AND RETURN THIS PROXY IN THE
ENCLOSED PRE-ADDRESSED ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR
RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.