SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K
CURRENT REPORT
Date of Report: July 15, 1998
Commission File No. 0-15543
METAL RECOVERY TECHNOLOGIES INC.
(Exact name of Registrant as specified in its charter)
Delaware 71-0628061
(State of incorporation) (I.R.S. Employee Identification No.)
415 East 151st Street
East Chicago, Indiana 46312
(Address of principle executive office) (Zip Code)
Registrant's telephone number, including area code: (219) 397-6261
Item 5. Other Events
Cancellation of Performance Shares and Convertible Redeemable Performance Shares
The Company has reached an agreement with the holders of the performance shares
and the CRPS issued at the time of the company acquisition of MRI(US), Inc. (See
attached extract from the Company's for 10K filing and reference to the
Company's 8K filing dated June 14, 1995.)
The agreed terms are as follows:
Compensation for surrendering 14,000,000 performance shares - $0.00.
Compensation for surrendering $25,000,000 of CRPS - 20,000,000 common shares of
the Corporations common stock to be issued under Reg S of the SEC.
Signed
/s/
Roy Pearce
Company Secretary
<PAGE>
Metal Recovery Technologies, Inc.
EXHIBIT - Extract From 10K
ACQUISITION OF MRI(US), Inc.
The acquisition of MRI(US) in 1995 was effected as follows:
a). By the issue of I 1,000,000 common shares under Regulation S,
having a nominal value of $12,000,000, including 10,000,000 of shares
at an assigned value of $1.20 each, plus 1,000,000 shares representing
the fee to underwriters.
b). An additional 7,000,000 common shares will be issuable only at such
time as the dezincing technology of MRI(US) shall have been approved by
an independent third-party, as evidenced by such party's entering into
a contract with the Company for the party, as evi processing of a
minimum of 50,000 tons per annum of steel scrap utilizing the Company's
technology, which contract shall be on commercially reasonable terms
consistent with a bona fide arm's-length relationship between the
parties, and, pursuant thereto, processing in commercial quantities
shall have commenced and scrap so processed shall have been accepted
and paid for by such third-party.
c). An additional 7,000,000 Common Shares shall be issuable only at
such time or times as contracts utilizing the dezincing technology of
MRI(US) shall have been entered into with one or more independent third
parties, providing for the processing of aggregate minimum of 1,000,000
tons per annum of steel scrap, which contracts shall be on commercially
reasonable terms consistent with a bona fide arm's-length relationship
between the parties.
d). $25,000,000 of Convertible Redeemable Preference Shares ("CRP"
Shares), shall be issuable upon the following conditions:
(1) at the rate of $5.00 of CRP Shares for each ton of
capacity in dezincing plants established by the Company or
by any subsidiary (excluding the East Chicago, IN plant)
which is certified as being operable at full capacity and
(2) at the rate of $5.00 of CRP Shares for each ton of such
plant capacity, which achieves normal operation of at least
80% of its specified throughput capacity over an aggregate
of three consecutive months.
These CRP Shares, if issued, will be convertible at the option of the holder
into shares of common stock of the Company, or the Company may be required to
redeem such CPR Shares over a period of four years, commencing on the second
anniversary of issue to the extent of 50% thereof and on each of the third and
fourth anniversaries to the extent of 25% thereof. Issuance of additional
common shares on conversion of CRP Shares, if issued, would result in
additional dilution of shareholders equity.
Determinations as to certification of a plant as being operational, and as to
the attainment of requisite 80% of operational capacity, shall be made by the
Company in its reasonable good faith judgment. Because of delays in bringing
the dezincing process to the point of commercial viability, as well as the
need for substantial amounts of capital beyond that originally anticipated
when MRI(US) was acquired, the Company contemplates seeking to negotiate a
modification of the conditions upon which such additional common and/or CRP
shares will be issued.
