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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2*)
KTI, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
482689205
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(CUSIP Number)
Bret R. Maxwell, 233 S. Wacker Drive, Suite 9500, Chicago, Illinois 60606
(312)258-1400
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
August 7, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box / /.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. 482689205 13D Page 2 of 7 Pages
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(1) Names of Reporting Persons.
I.R.S. Identification Nos. of Above Persons (Entities Only)
Environmental Private Equity Fund II, L.P. 36-383-0765
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(2) Check the Appropriate Box if a Member (a) / /
of a Group (See Instructions) (b) /x/
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(3) SEC Use Only
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(4) Source of Funds (See Instructions)
Not applicable.
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
Delaware
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Number of Shares (7) Sole Voting
Beneficially Owned Power 149,912*
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 0
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(9) Sole Dispositive
Power 149,912*
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(10) Shared Dispositive
Power 0
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
149,912*
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
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(13) Percent of Class Represented by Amount in Row (11)
1.2%
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(14) Type of Reporting Person
PN
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*SEE ITEM 5 HEREOF.
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Page 3 of 6 Pages
THIS SCHEDULE AMENDS A SCHEDULE 13D DATED JULY 14, 1997, AS AMENDED BY
AMENDMENT NO. 1 TO SCHEDULE 13D DATED APRIL 6, 1998. ALL ITEMS NOT MENTIONED
SPECIFICALLY IN THIS AMENDMENT REMAIN AS PROVIDED IN THE ORIGINAL 13D AND
AMENDMENT NO. 1.
Item 2. Identity and Background.
This Schedule 13D is filed on behalf of Environmental Private Equity
Fund II, L.P., a Delaware limited partnership ("EPEF"or the "Filing Party").
The Filing Party maintains its principal offices at 233 South Wacker Drive,
9500 Sears Tower, Chicago, Illinois 60606 ("Suite 9500"). The principal
business of the Filing Party is venture capital and private equity investment.
EPEF is controlled through more than one partnership. In this Schedule
13D, the persons who have or share control of EPEF or its general partner
after looking through one or more intermediate partnerships will be referred
to as "ultimate general partners." The ultimate general partners of EPEF are
First Analysis Corporation, a Delaware corporation ("FAC"), Bret R. Maxwell
("Maxwell"), BancAmerica Robertson Stephens & Co. ("BARS"), Argentum
Environmental Corporation ("AEC"), and Schneur Z. Genack, Inc. ("SZG").
(a), (b) and (c). The following information is furnished with respect
to each person who takes executive actions on behalf of FAC with respect to
its functioning as an ultimate general partner of EPEF, and on behalf of
Maxwell personally, each of whom maintains Suite 9500 as his principal
business address:
<TABLE>
<CAPTION>
Name Affiliation with FAC
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<S> <C>
1. F. Oliver Nicklin President, Chief Executive Officer and Director
2. Bret R. Maxwell Vice Chairman
</TABLE>
Each of the above is principally employed as an executive of FAC. FAC's
principal business is participation in venture capital partnerships and the
provision of research investment services. Its principal business address is
Suite 9500.
(a), (b) and (c) (con't). AEC maintains its business address c/o The
Argentum Group ("TAG"), 405 Lexington Avenue, New York, New York 10174 (the
"TAG Address"). SZG maintains its business address at the TAG Address. The
persons who take actions on behalf of AEC and SZG with respect to their
functioning as ultimate general partners of EPEF are Schneur Z. Genack
("Genack"), Daniel Raynor ("Raynor") and Walter H. Barandiaran
("Barandiaran"). Each of Raynor and Barandiaran is principally employed as
an executive of TAG and maintains his business address at the TAG address.
TAG's principal business is merchant banking. Genack is
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Page 4 of 6 Pages
principally employed as a private investor. Genack maintains his business
address at 18 East 48th Street, Suite 1800, New York, New York 10017.
(a), (b) and (c) (con't). BARS maintains its business address at 555
California Street, San Francisco, California 94111 (the "BARS Address"). The
person who takes actions on behalf of BARS with respect to its functioning as
an ultimate general partner of EPEF is Charles R. Hamilton ("Hamilton").
Hamilton is principally employed as an employee of BARS. Hamilton maintains
his principal business address at the BARS Address. BARS's principal
business is investment banking.
(d) and (e) None of the Filing Party or its general partners and, to
the best of the Filing Party's knowledge, none of the persons listed in the
responses to Items 2(a), (b) or (c) above has, during the last five years,
been (i) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such civil
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to
such laws.
(f) To the best of the Filing Party's knowledge, each of the natural
persons listed in the responses to Items 2(a), (b) or (c) above is a citizen
of the United States, except for Barandiaran, who is a citizen of Peru.
Item 5. Interest in Securities of the Issuer.
(a) (i) As of the date of this Schedule, EPEF owns 149,912 shares of
the Common Stock. Assuming no exercise of options or warrants or conversion
of any convertible security by any other person, EPEF owns 1.2% of the Common
Stock.
In addition, Genack holds 24,000 shares of Common Stock, 12,500 Warrants
("$9 Warrants") to purchase Common Stock at an exercise price of $9 per
share, and 1,667 Warrants ("$10 Warrants") to purchase Common Stock at an
exercise price of $10 per share (the $9 Warrants and the $10 Warrants are
sometimes collectively referred to herein as the "Warrants"). Assuming
exercise of all Warrants held by Genack, and no exercise of options or
warrants or conversion of any convertible security by any other person,
Genack owns 0.3% of the Common Stock.
(ii) By reason of their status as ultimate general partners of EPEF,
each of FAC, Maxwell, BARS, AEC and SZG, and the controlling persons Genack,
Raynor, Barandiaran and Hamilton, may be deemed to be the indirect beneficial
owner of 149,912 shares of Common Stock or 1.2% of such shares. By reason of
his status as the majority stockholder of FAC, F. Oliver Nicklin may also be
deemed to be the indirect beneficial owner of such shares.
(iii) The Filing Party disclaims beneficial ownership of all shares
described herein except those shares that are owned by the Filing Party
directly. The Filing Party understands that each of the other persons named
as an officer, director, partner, ultimate general partner or other affiliate
of
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Page 5 of 6 Pages
any Filing Party herein disclaims beneficial ownership of all of the shares
described herein, except for Genack with respect to the 24,000 shares of
Common Stock and 14,167 Warrants held by him directly.
The Filing Party and each of its general partners disclaim the existence
of an "group" among any or all of them and further disclaim the existence of
a "group" among any or all of them and any or all of the other persons named
as an officer, director, partner or other affiliate of any Filing Party, in
each case within the meaning of Section 13(d)(3) of the 1934 Act.
(b)(i) EPEF has the sole power to vote and dispose of 149,912 shares of
Common Stock. FAC, Maxwell, BARS, AEC and SZG may be deemed to share the
power to vote or dispose of such shares.
(ii) Subject to the exercise of Warrants held by Genack, Genack has the
sole power to vote and dispose of 38,167 shares of Common Stock.
(c) (i) On July 20, 1998, Genack sold 1,000 shares of Common Stock
at a price per share of $24.75.
(ii) On July 31, 1998, EPEF exercised its 218,750 $9 Warrants and
its 29,167 $10 Warrants, in each case on a "cashless" basis, and received
149,912 shares of Common Stock.
(iii) On August 7, 1998, EPEF distributed 318,700 shares of Common
Stock to its limited partners.
(d) None.
(e) On August 7, 1998, EPEF ceased to be the beneficial owner of more
than five percent of the Common Stock.
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Page 6 of 6 Pages
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: August 10, 1998
ENVIRONMENTAL PRIVATE EQUITY FUND II,
L.P., a Delaware limited partnership
By: Environmental Private Equity
Management II, L.P., General
Partner of Environmental Private
Equity Fund II, L.P.
By: First Analysis EPEF Management
Company II, General Partner of
Environmental Private Equity
Management II, L.P.
By: First Analysis Corporation,
General Partner of First Analysis
EPEF Management Company II
By: /s/ Bret R. Maxwell
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Title: Vice Chairman
