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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
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 14, 2000
NEXTERA ENTERPRISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 0-25995 95-4700410
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION
OF INCORPORATION) NO.)
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ONE CRANBERRY HILL, LEXINGTON, MASSACHUSETTS 02421
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (781) 778-4400
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This Current Report on Form 8-K is filed by Nextera Enterprises, Inc., a
Delaware corporation (the "Company"), in connection with the matters described
herein.
ITEM 5. OTHER EVENTS.
On December 14, 2000 Nextera Enterprises, Inc. (the "Company") entered
into a Note Conversion Agreement with Knowledge Universe, Inc. (the Company's
controlling stockholder) pursuant to which Knowledge Universe, Inc. converted
$21,000,000 of subordinated debt into a new series of preferred stock designated
as Series A Preferred Stock, par value $.001 per share. The transaction was
approved by the Company's Board of Directors following the recommendation of an
independent committee of the Board. Completion of the transaction allows the
Company to meet the minimum net tangible assets requirement of the NASDAQ
National Market System.
The terms of the Series A Preferred Stock are described in a Certificate
of Designation filed as an exhibit hereto and summarized below.
The Series A Preferred Stock will have a 10% PIK dividend (i.e.,
preferred on preferred). The 10% rate will be adjusted to 7% effective from July
1, 2001 should the preferred not be called or exchanged by the Company as
provided below. If the Series A Preferred Stock is exchanged by the Company for
subordinated debt as provided below, the preferred will have a 12% PIK dividend,
retroactive to the date of issuance. The PIK will compound quarterly. The
dividend will have a preference on any dividends declared on the common stock.
On or before June 30, 2001, the Company may, at its option, (i) call the
Series A Preferred Stock for cash at original face value plus PIK dividends or
(ii) exchange the Series A Preferred Stock for subordinated debt securities in a
principal amount equal to the face amount of the Series A Preferred Stock plus
PIK dividends. Such new subordinated debt securities would have identical terms
to those of the subordinated debt held by Knowledge Universe prior to this debt
conversion. If not called or exchanged by June 30, 2001, the preferred will
become convertible at any time thereafter as provided below.
If, prior to the fourth anniversary of the closing of the debt
conversion, the Series A Preferred Stock has not been called, exchanged or
converted as described above, then on or after the fourth anniversary of the
closing of the debt conversion, the Company may, at its option, call the Series
A Preferred Stock, provided that the Company's Class A Common Stock is trading
at an average of at least 150% of the Reset Conversion Price (defined below)
over the 30 trading days preceding such call. For the twelve month period
commencing on the fourth anniversary of the closing of the debt conversion, any
Series A Preferred Stock may be called at a premium of 106% of its face value
plus PIK dividends accrued to the date of such call. On each anniversary of the
closing of the debt conversion thereafter, this premium would decrease by one
percent (1%) for the following twelve month period. Commencing on the tenth
anniversary of the closing of the debt conversion and thereafter, the call price
shall be 100%. The preferred will vote on an as converted basis.
The preferred will have a liquidation preference equal to face value
plus all dividends. The holders of the preferred will be entitled to this
liquidation preference upon the merger or consolidation of the Company into or
with another corporation in which the Company is not the surviving corporation
or any other transaction which results in the Company's stockholders immediately
prior to such transaction owning less than 50% of the Company's voting power
immediately after such transaction, or the sale of all or substantially all of
the assets of the Company.
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If not called or exchanged by the Company by June 30, 2001, the Series A
Preferred Stock will be convertible into Class A Common Stock at any time
thereafter at a conversion price equal to the lesser of (i) $3 per share or (ii)
150% of the average of the last sales prices of the Class A Common Stock over
the 10 day period immediately preceding June 30, 2001 (the "Initial Conversion
Price"), subject to the reset and exceptions described below and other customary
anti-dilution adjustments. The Initial Conversion Price of the Series A
Preferred Stock will reset (the "Reset Conversion Price") in two years from the
debt conversion date at the lower of (i) the Initial Conversion Price, or (ii)
80% of the average of the last sales prices of the Class A Common Stock over the
30 day period immediately preceding the two year point. Notwithstanding the
foregoing, in no event will the conversion price of the Series A Preferred Stock
be less than $0.5625, the last sales price of the Company's Class A Common Stock
on December 14, 2000 - the date Note Conversion Agreement was executed.
All holders of Series A Preferred Stock receive customary registration
rights, including demand, piggyback and S-3 registration rights, commencing on
June 30, 2001.
ITEM 7. EXHIBITS.
(c) Exhibits.
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Exhibit
Number Description of Exhibit
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4.1 Certificate of Designations.
4.2 Note Conversion Agreement.
99.1 Press Release dated December 15, 2000
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SIGNATURE
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: December 15, 2000 NEXTERA ENTERPRISES, INC.
By: /s/ Michael P. Muldowney
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Michael P. Muldowney
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
Number Description of Exhibit
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4.1 Certificate of Designations.
4.2 Note Conversion Agreement.
99.1 Press Release dated December 15, 2000
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