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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported); October 17, 1996.
RENTECH, INC.
(Exact name of registrant as specified in charter)
Colorado 0-19260 84-0957421
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(State or other jurisdiction Commission I.R.S. Employer
of incorporation or File No. Identification No.
organization)
1331 17th Street, Suite 720, Denver, Colorado 80202
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(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code: (303) 298-8008
Item 5. Other Events.
Rentech, Inc. (Rentech or the Company) and ITN Energy Systems, Inc., a
privately owned Colorado corporation, have agreed to form a limited
liability company called ITN/ES LLC to commercially exploit technologies
developed and owned by ITN/ES. The technologies will be contributed to the
LLC. ITN Energy Systems Inc. (ITN/ES) is the manager of the new LLC.
The technologies and products include production of thin-film
electronic substrates by deposition upon which computer chips can be
mounted; advanced processes for ceramic deposition on materials to improve
their capacity to withstand heat and wear; and utilization of shape memory
alloys that are highly advanced metals which by the proper application of
heat, cold or electrical impulse can perform a mechanical function with
precision for long periods of time.
Rentech's ownership interest in the LLC and all of its technologies is
to be 10%, subject to contribution of $200,000 in cash and 1,200,000 shares
of Rentech restricted stock by February 14, 1997, or upon contribution of
an additional $25,000, by April 15, 1997. Rentech is to register its
shares issued to the LLC within 120 days after issuance, and if it has not,
is required to issue an additional 400,000 shares to ITN/ES LLC.
The agreement between ITN/ES and Rentech recognizes that
commercialization of the technologies already in existence as well as those
that may be developed in the future by ITN/ES LLC may require establishment
of additional business entities. Rentech by mutual agreement, may provide
additional capital to increase its ownership interest up to a maximum of
49% of each technology in which it invests.
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ITN/ES is owned by Dr. Mohan S. Misra and was formed to transfer
certain technologies that originated in the defense and aerospace industry
into commercial products. For 15 years prior to forming ITN/ES, Dr. Misra
directed materials research and development for advanced programs for
Martin Marietta Corporation. He was the corporate strategic technologist
in charge of developing its long-term technology strategies for aerospace
and commercial applications. During his career, Dr. Misra has written more
than 50 technical publications, been awarded two patents, and received
several technical awards, including Martin Marietta Corporation's highest
award for outstanding performance. Dr. Misra is also president of and
directs technical development for Global Solar Energy LLC, a venture with
TEP Solar Energy Corporation, a wholly-owned subsidiary of Tucson Electric
Power Corporation. Global Solar Energy LLC is engaged in the production of
thin-film photovoltaic modules and the design of photovoltaic systems.
Item 7. Financial Statements and Exhibits.
Letter of Intent dated October 17, 1996 between Rentech, Inc. and ITN
Energy Systems, Inc.
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.
RENTECH, INC.
Date: November 7, 1996 By: (signature)
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Dennis L. Yakobson, President
LETTER OF INTENT
This Letter of Intent is entered into on this 17th day of October, 1996
by RENTECH, INC., a Colorado corporation, of 1331 17th Street, Suite 720,
Denver, Colorado 80202 (Rentech) and ITN ENERGY SYSTEMS, INC., a Colorado
corporation, of 12401 West 49th Avenue, Wheat Ridge, Colorado 80033 (ITN/ES).
Background Circumstances:
The circumstances preceding the execution of this Letter of Intent are
as follows:
A. Rentech is a publicly owned company organized in 1981 and engaged
in the business of licensing its Fischer-Tropsch technology for the conversion
of natural gas and synthetic gas into various petrochemical products such as
diesel fuel, naphtha, and waxes. The common stock of Rentech trades on the
Nasdaq over-the-counter stock market.
B. ITN/ES is a privately owned Colorado corporation organized in 1994
which has developed and owns various other proprietary technologies and the
know-how to produce products utilizing those technologies including, but not
by way of limitation, multichip modules by thin- film deposition, "smart-
materials" and ceramic coatings that ITN/ES desires to commercialize and
exploit. Dr. Mohan S. Misra is the sole shareholder of ITN/ES.
C. Rentech is in the process of raising additional equity capital to
acquire interests in other technologies or assets in other fields of business.
D. Rentech and ITN/ES have formed a Limited Liability Company, ITN/ES
LIMITED LIABILITY COMPANY (ITN/ES LLC), pursuant to the Colorado Limited
Liability Company Act (C.R.S. 7-80-101 et seq.) that can be used as the
entity to commercialize and exploit some or all of the ITN/ES technologies.
Now, therefore, in consideration of the background circumstances and the
following mutual agreements, the parties agree as follows:
1. At Closing, ITN/ES will contribute all of its assets and
technological know-how except its interest in Global Solar Energy LLC to the
ITN/ES Limited Liability Company (ITN/ES LLC).
2. Rentech will contribute $200,000 cash and 1,200,000 shares of
Rentech, Inc. restricted common stock ($0.01 par value) valued at $480,000 or
$0.40 per share to the ITN/ES LLC. Rentech shall have 120 days from the date
of this Letter of Intent to deliver the cash and stock (Closing). A
contribution of $25,000 to the ITN/ES LLC by Rentech before the expiration of
the 120 day period will extend that period for an additional 60 days which
will be in addition to the cash contributed to the ITN/ES LLC pursuant to this
Paragraph 2. Rentech will use its best efforts to cause all of the shares of
common stock contributed hereunder to be registered under the Securities Act
of 1933, as amended within 120 days after delivery of the cash and stock
(Closing). If Rentech is unable to cause all of the shares of common stock
contributed hereunder to be registered within 120 days, then in that event,
Rentech shall contribute an additional 400,000 shares of Rentech, Inc.
restricted common stock ($0.01 par value) to the ITN/ES LLC.
3. ITN/ES LLC shall initially have two members: Rentech and ITN/ES.
Each member shall have the following interest in the LLC: ITN/ES 90% and,
Rentech 10%.
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4. The managing member shall be ITN/ES. The business and technical
affairs of ITN/ES LLC shall be managed by its member, ITN/ES. Rentech shall
assist as requested by ITN/ES with the administration of ITN/ES LLC's
activities.
5. At any time after nine (9) months from the date of this Letter
of Intent, in the event ITN/ES LLC elects to sell some of its Rentech shares
and at that time the share price of the Rentech shares is less than $0.40 per
share for a period of 20 consecutive business days, ITN/ES LLC will have the
right to sell to Rentech for cash up to 600,000 shares per year of those
common shares contributed by Rentech to the ITN/ES LLC pursuant to paragraph
2 hereof. In the event Rentech cannot "redeem" the stock proffered by ITN/ES
LLC for cash within sixty (60) days of the demand for sale, then Rentech will
reassign to ITN/ES LLC the proportionate share of the ITN/ES LLC owned by
Rentech represented by the "unredeemed" portion of the stock proffered by
ITN/ES LLC and Rentech shall receive the stock so proffered. The redemption
of 600,000 shares per year can be requested only once during any twelve (12)
month period by ITN/ES LLC.
6. In the event of the bankruptcy, insolvency, liquidation, or
receivership of Rentech, ITN/ES LLC shall have the unilateral right to
repurchase any interest still retained by Rentech, Inc. in the ITN/ES LLC.
The repurchase price shall be $10,000 per one percent (1%) of one hundred
percent (100%) interest owned by Rentech, Inc. For example, if Rentech still
owned ten percent (10%) of the ITN/ES LLC, ITN/ES LLC could reacquire its
interest by the payout of $100,000.
7. In the event of the bankruptcy, insolvency, liquidation, or
receivership of ITN/ES LLC, Rentech shall have the right to repurchase the
shares of stock contributed to the ITN/ES LLC in paragraph 2 above for $0.045
per share.
8. It is understood that for the commercialization of the advanced
technologies that have been or may be developed in the future by ITN/ES LLC,
new companies may need to be established. The interest that can be owned by
Rentech in any of the new limited liability companies may be different than
10% as may be mutually agreed to between the parties.
9. Each member shall be responsible for its proportionate share of
capital requirements and each of the members shall be entitled to a
distribution of the profits and gains of the LLC in proportion to their
respective membership interests. The timing and amounts of distribution shall
be determined by the management of the ITN/ES LLC.
10. In the event Rentech wishes to dispose of any or all of its
interest in ITN/ES LLC, Rentech, Inc. shall first offer it to ITN/ES. In the
event the parties cannot agree upon purchase price, an independent party shall
be selected according to the rules of the American Arbitration Association to
determine the value of the interest in ITN/ES LLC being offered for sale by
Rentech. ITN/ES shall have the right to acquire Rentech's entire interest
being offered in the following terms: 25% in cash and the balance by a
promissory note bearing interest at the annual rate equal to two (2)
percentage points above the prime rate published in the Wall Street Journal
on the date of sale, payable quarterly over a three year term. The promissory
note will be secured by the interest being sold.
11. The parties agree to renegotiate the terms and structure of the
arrangements set forth in this Letter of Intent should such changes be
necessary to take advantage of tax planning strategies. The parties
acknowledge that discussions have taken place regarding the enforcement of
Paragraphs 5, 6 & 7. The parties agree to make any changes necessary in the
definitive contractual documents pursuant to Paragraph 13 hereof to insure the
enforceability of provisions of Paragraphs 5, 6 & 7.
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12. In recognition of the fact that Rentech's stock is publicly
traded, the parties agree to keep the information described in this Letter of
Intent confidential until they agree otherwise or unless Rentech is obligated
by federal or state securities laws to make a public disclosure, or unless
Rentech finds it advisable to make such disclosure.
13. Prior to the date of Closing, Rentech and ITN/ES shall prepare
all the definitive contractual documents which may be necessary or advisable
to implement the details of the mutual agreements contained in this Letter of
Intent including, but not by way of limitation, the Operating Agreement of
ITN/ES LLC. Said definitive contractual documents will be executed by the
parties at the Closing.
RENTECH, INC. ITN ENERGY SYSTEMS, INC.
By (signature) By (signature)
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Dennis L. Yakobson Mohan S. Misra
President President
