<PAGE>
As filed with the Securities and Exchange Commission on June 18, 1996
Registration No. 333-4298
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
PRE-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
KFX INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-1079971
- --------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1999 Broadway, Suite 3200, Denver, Colorado 80202, (303) 293-2992
-----------------------------------------------------------------
(Address, including ZIP code, and telephone number,
including area code, of registrant's principal executive offices)
______________________
Theodore Venners
President and Chief Executive Officer
1999 Broadway, Suite 3200, Denver, Colorado 80202, (303) 293-2992
-----------------------------------------------------------------
(Name, address, including ZIP code, and telephone number,
including area code, of agent for service)
____________________
Copies To:
Warren L. Troupe, Esq.
Deborah A. Hogan, Esq.
Kutak Rock
717 Seventeenth Street, Suite 2900
Denver, Colorado 80202
(303) 297-2400
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
If delivery of this prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class of Proposed Proposed Amount of
securities to be Amount to maximum maximum registration
registered be offering aggregate fee
registered price per offering
share/(1)/ price/(1)/
<S> <C> <C> <C> <C>
Common Stock, $.001 par 2,038,000 $7.34 $14,958,920 $5,158.25/(2)/
==============
value per share 150,000 $7.625 $ 1,143,750 $ 394.40
--------- ------ ----------- --------------
================================================================================
</TABLE>
/(1)/ Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
/(2)/ Paid with the original filing of the registration statement.
______________________________
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
In accordance with Rule 429 under the Securities Act of 1933, the
Prospectus contained herein also relates to (1) 237,747 shares of the
Registrant's Common Stock covered by Registration Statement No. 33-90128, and
(2) 431,630 shares of the Registrant's Common Stock covered by Registration
Statement No. 33-97148.
<PAGE>
PROSPECTUS
2,857,377 Shares
KFX INC.
Common Stock
This Prospectus relates to 2,857,377 shares of Common Stock, par
value $.001 per share (the "Common Stock") of KFx Inc., a Delaware corporation
(the "Company"), which may be offered from time to time by the selling
stockholders named herein (the "Selling Stockholders"), including shares to be
received upon the exercise of stock options and warrants. The Company will not
receive any proceeds from the sale of the Common Stock offered by the Selling
Stockholders hereby but will receive certain proceeds upon the exercise of the
stock options and warrants, which proceeds will be used for working capital. The
Company will pay all expenses incident to the registration of the Common Stock
under the Securities Act of 1933, as amended (the "Securities Act").
Sales by the Selling Stockholders hereby may be effected from time
to time in one or more transactions for their own account (which may include
block transactions) on the American Stock Exchange or in negotiated
transactions. Sales will be at prices and on terms then prevailing or at prices
related to the current market price or at negotiated prices and terms. In
connection with any sales of the Common Stock offered hereby, the Selling
Stockholders and participating agents, brokers or dealers may be deemed to be
underwriters as that term is defined under the Securities Act, and commissions
or discounts or any profit realized on the resale of such securities may be
deemed to be underwriting commissions or discounts under the Securities Act. See
"Plan of Distribution."
The Common Stock is listed for trading on the American Stock
Exchange ("AMEX") under the symbol "KFX." On June 13, 1996, the last reported
sale price of the Common Stock on the AMEX was $7.625 per share.
THESE SECURITIES ARE SUBJECT TO A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN PURCHASING THE
SHARES OF COMMON STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is June __, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities of the Commission located at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located at 7 World Trade Center, Suite 1300, New York, New York 10048, and at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at Room 1024, 450 Fifth Street, N.W, Washington, D.C.
20549. The Common Stock of the Company is quoted on the American Stock Exchange.
Reports and other information concerning the Company may also be inspected at
the offices of The American Stock Exchange, Inc. at 86 Trinity Place, New York,
New York 10006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
hereby incorporated by reference in this Prospectus: (1) the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1995, (2) Amendment
No. 1 to the Company's Annual Report on Form 10-KSB for the year ended December
31, 1995, (3) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996, (4) the Company's Current Report on Form 8-K dated April 19,
1996, and (5) the description of the Company's Common Stock contained in its
Registration Statement on Form 10-SB filed with the Commission on July 11, 1994.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13 (c), 14 or 15 (d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering covered by this
Prospectus will be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing of such documents. Any statement
contained herein or in any document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide, without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been or may be incorporated by reference
in this Prospectus, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference into such documents). Such requests
should be directed to KFx Inc. Attention: Corporate Secretary, 1999 Broadway,
Suite 3200, Denver, Colorado 80202, telephone (303) 293-2992.
2
<PAGE>
RISK FACTORS
An investment in the Common Stock offered hereby involves a high
degree of risk. This Prospectus contains forward-looking statements which
involve risks and uncertainties. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth in the following risk
factors and elsewhere in the Prospectus. In addition to the other information
contained in this Prospectus, prospective investors should carefully consider
the following risk factors before purchasing the Common Stock offered hereby.
History of Operating Losses; Uncertainty of Future Profitability.
The Company has had no material licensing, royalty or product sales revenues or
income from operations since its inception in February 1988 (or prior to
inception when the operations of the Company were conducted by various
predecessor entities). Net losses before extraordinary items were approximately
$8.8 million and $6.1 million in 1995 and 1994, respectively. The Company
expects to incur additional losses in the foreseeable future and there can be no
assurance that the Company will ever achieve substantial revenues or
profitability, or that profitability will be sustained for any period of time.
Uncertainty of Additional Funding. The current near-term funding
sources available to the Company are (i) cash on hand, which as of May 10, 1996
was approximately $3.4 million; (ii) an option granted to Thermo Ecotek
Corporation ("TEC") for the sale of up to 1.25 million shares of Common Stock
during a two-month period beginning in December 1996, for proceeds to the
Company of up to $2.5 million; (iii) the expected start-up of the KFx Fuel
Partners, L.P. production facility near Gillette, Wyoming in the fourth quarter
of 1996, resulting in royalty payments, net profits interest, and possible
management fees to the Company; (iv) the exercise of certain outstanding common
stock purchase warrants, which could result in proceeds to the Company in late
1996 of up to approximately $0.5 million; and (v) certain cost reimbursements
from K-Fuel LLC relating to a collective research and development program
conducted by the Company in conjunction with Kennecott Alternative Fuels, Inc.,
the Company's joint venture partner in K-Fuel LLC. The Company believes that
based solely on the current cash on hand and the expected cost reimbursement
payments (as defined herein) from K-Fuel LLC will be sufficient to fund the
Company's current operating requirements until the second or third quarter of
1997. If TEC does not exercise its option in December 1996 or January 1997, the
Company will be required to seek additional financing sources in late 1997 or
early 1998. Additionally, the Company may be required to obtain additional
financing for an equity participation, if any, in any future K-Fuel production
facilities. The Company does not currently have any commitments with respect to
additional financing, and there can be no assurance that such financing would be
available on terms acceptable to the Company or at all. In addition, the ability
of the Company to incur additional indebtedness is limited by the terms of a
Stock Purchase Agreement between the Company and TEC.
Uncertainty of Project Profitability. The Company currently
anticipates that one of its significant revenue sources will be the commencement
of licensing and royalty payments and
3
<PAGE>
operating revenues from the Project and future expected production facilities.
The future commercial production facilities include, but are not limited to, a
plant to be developed by K-Fuel LLC. However, there can be no assurance that the
Project will be profitable or that it will be able to begin operations as
scheduled. The failure of the Company to receive payments from the Project as
anticipated may require the Company to seek additional financing in late 1997.
No Established Market for Beneficiated Fuel Products. Although the
Company believes that a substantial market will develop both domestically and
internationally for clean coal fuel products, an established market does not
currently exist. As no established market exists, the availability of accurate
and reliable pricing information and transportation alternatives are not fully
known. The future success of the Company will be determined by its ability to
establish such a market among potential customers such as electrical utility
companies and industrial coal users. Many of such potential users of the
Company's fuel products will be able to choose among alternative fuel supplies.
Although the Company has successfully operated a K-Fuel Technology (as defined
herein) demonstration plant, the market viability of the K-Fuel Technology will
not be known until the Company constructs one or more commercial-scale
production facilities, either in the United States or internationally. Pursuant
to a Partnership Agreement by and among Eco Fuels, Inc., KFx Wyoming, Inc., a
wholly owned subsidiary of the Company, and TCK Fuels, Inc., the Company has a
5% interest in a limited partnership formed to construct, develop and operate a
facility at the Fort Union Mine, near Gillette, Wyoming, that will be used for
the production of coal manufactured using the K-Fuel Technology (collectively,
the "Project"). Until the Project is completed or another commercial-scale
facility is constructed, the Company faces the risk that it will be unable to
generate sufficient market interest to continue in business. Further, there can
be no assurance that the Project or any other commercial-scale facility will be
successful.
Federal Regulation of Air Emissions. A significant factor driving
the creation of the United States market is the Clean Air Act, as amended by the
Clean Air Act Amendments of 1990 (the "Clean Air Act"). The Clean Air Act
specifies certain air emission requirements for electrical utility companies and
industrial coal users. The Company believes that compliance with such
regulations by these coal users can be fully or partially met through the use of
clean-burning fuel technologies such as that developed by the Company. A full or
partial repeal of the Clean Air Act would have a material adverse effect on the
Company. The Company is unable to predict future regulatory changes and their
impact on the demand for the Company's products.
Oil Barrel Equivalent Tax Credit. The Federal Oil Barrel Equivalent
Tax Credit ("OBETC") is a significant incentive for potential joint venture
partners to invest in United States commercial-scale production facilities using
the K-Fuel Technology. A repeal or revision of the amount of federal tax credits
provided by the OBETC could negatively impact the ability of the Company to
attract additional joint venture partners for United States commercial-scale
production facilities.
4
<PAGE>
Competition. The Company will face competition from other companies
in the clean coal and alternative fuel technology industries. Some of these
companies have financial and managerial resources greater than those of the
Company, and therefore may be able to offer products more competitively priced
and more widely available than those of the Company. Also, such competitors'
products may make the Company's technology and products obsolete or non-
competitive.
Claims Against Future Licensing and Royalty Streams. The Company
anticipates that a significant portion of its future revenue stream will be in
the form of licensing and royalty payments from third party licensees operating
commercial-scale production facilities. As part of a debt restructuring
agreement reached with the State of Wyoming in 1994, the Company granted a 12%
interest in future licensing and royalty payments from its K-Fuel Technology to
the State of Wyoming, until the State's interest has reached $5 million.
Thereafter, the State's interest decreases to 6% of licensing and royalty
streams. The Company also has a royalty agreement with Mr. Edward Koppelman, the
inventor of the K-Fuel Technology, whereby Mr. Koppelman is entitled to 25% of
future license fees and royalty payments received by the Company up to a maximum
of approximately $75.7 million. Additionally, the Company has recently entered
into royalty agreements with certain other entities in connection with the
Project. Amounts due under these agreements may restrict or limit the Company's
ability to pursue other commercialization opportunities as such payments will
decrease cash flow from operations.
Reliance on Existing Management. The Company's progress to date has
been largely the result of the efforts of its executive management team and
Board of Directors. The loss to the Company of any of these individuals could
have a material adverse effect on the Company. The Company has a limited amount
of "key man" life insurance for Theodore Venners, the Chairman of the Board of
Directors, President and Chief Executive Officer.
Common Stock Eligible for Future Sale and Price of Common Stock.
Sales of substantial numbers of shares of Common Stock in the public market
following the offering hereby could adversely affect the market price of the
Common Stock. Upon completion of this offering, there will continue to be
22,531,040 shares of Common Stock outstanding. The 2,857,377 shares of Common
Stock sold pursuant to this offering will be freely tradeable without
restriction (except as to affiliates of the Company). Of the remaining shares of
Common Stock outstanding, 15,672,070 are "restricted securities" within the
meaning of Rule 144 under the Securities Act ("Rule 144"). In the near future
the Company may also consider filing a registration statement with respect to
shares of Common Stock to be offered and sold by the Company in order to raise
capital for a commercial plant project, although at this time the Company cannot
estimate the amount or time of such an offering. The Company is unable to
predict the effect that sales of Common Stock under Rule 144 or pursuant to such
registration or otherwise may have on the then prevailing market price of the
Common Stock.
Dilution; Change in Control. There are currently outstanding options
and warrants to purchase 10,900,000 shares of Common Stock, which includes TCK's
option to acquire up to
5
<PAGE>
1,250,000 shares and a warrant issued to TCK to purchase 7,750,000 shares of
Common Stock ("Warrant A"). In addition, TCK has a warrant (the "Control
Warrant"), which may only be exercised if TCK exercises the stock option and
Warrant A. The Control Warrant gives TCK the right to purchase the number of
shares of Common Stock that, when added to all shares owned by TCK on the
exercise date or which TCK has the right to acquire within sixty days of the
exercise date, would be sufficient to give TCK ownership of 51 percent of the
Common Stock outstanding, on a fully diluted basis, on the exercise date. To the
extent such options or warrants are exercised, it will result in dilution to
existing stockholders. In addition, as long as such options or warrants are
outstanding, the terms upon which the Company will be able to obtain additional
equity capital may be adversely affected since the holders of the outstanding
options and warrants can be expected to exercise them, to the extent that they
are able to, thereby adversely affecting the Company's ability to raise
additional equity capital.
Governmental Regulation. The Company's business is subject to
numerous federal and state regulations. Any United States production plants
which may be constructed will require numerous permits, approvals and
certificates from appropriate federal, state and local governmental agencies
before construction of any such facility may begin, and will be subject to
periodic maintenance or review requirements once any such facilities begin
production. Such permits and regulations relate to (i) air quality; (ii)
wastewater discharge; (iii) land quality; and (iv) hazardous waste treatment
storage and disposal. There can be no assurance that such approval will be
granted to the Company. In addition, there can be no assurance that future
domestic or international governmental regulations will not change such that the
necessary permits and approvals for any future commercial-scale production
facilities will be prohibitively expensive or difficult to obtain. Any failure
to obtain required regulatory approvals, or any substantial delay in obtaining
such approval, could have a material adverse effect on the Company.
Operations in Foreign Countries. The Company believes that
opportunities for exploiting its technologies may exist in foreign countries
that are experiencing severe environmental problems or in countries that can
develop an export market for beneficiated coal fuel products. Many of these
countries are located in Asia and Eastern Europe, and have histories of volatile
government control and poor economic conditions. Although the Company currently
has no production facilities in any of these countries, future production
facilities in such countries could be subject to high levels of regulation
and/or taxation, poor local economic conditions, and in extreme circumstances,
expropriation of assets. Additionally, repatriated net revenues from such
production facilities could be subject to unfavorable foreign exchange
conditions. The Company has identified the countries of the Czech Republic,
Indonesia and Turkey as current specific targets for the K-Fuel Technology. The
specific risks associated with investments in these countries can generally be
categorized as those risks identified above.
Absence of Dividends. The Company has never paid any cash dividends
and does not anticipate paying cash dividends in the foreseeable future. In
addition, pursuant to a stock purchase agreement between the Company and TCK, so
long as TCK, together with its affiliates, own at least 1,000,000 shares of
Common Stock and either of the warrants issued to
6
<PAGE>
TCK remain in effect, the Company may not declare or pay any dividends on its
Common Stock other than dividends payable solely in Common Stock.
THE COMPANY
The Company, formerly Beaumont Financial Ltd., was incorporated in
Delaware in February 1988 and is engaged in the business of licensing and
commercializing a technology that enhances the combustion characteristics of
coal and other carbonaceous fuels ( the "K-Fuel Technology"). The K-Fuel
Technology uses heat and pressure to physically and chemically transform high-
moisture, low energy per pound coal and other organic feedstocks into a lower
moisture, high energy solid fuel ("K-Fuel"). The Company believes that the
principal benefit of the K-Fuel Technology in the United States is that the fuel
produced from the process can allow electrical power producers, manufacturers
and other large scale users of coal to meet the clean air standards imposed by
the Clean Air Act. In the absence of a clean-burning fuel such as that produced
by the K-Fuel Technology, many existing users of coal face costly capital
expenditure requirements to modify their coal-powered facilities to comply with
the Clean Air Act. The Company believes that the principal benefit of the K-Fuel
Technology in markets outside of the United States is that low-rank indigenous
coal supplies can be upgraded to provide a more cost effective and less
environmentally damaging fuel source for power producers, manufacturers and
households. This is of particular importance for many developing nations that
are rapidly industrializing and that face pressure (both internally and
externally) to increase their environmental standards and make the most cost
effective use of indigenous energy sources. Also, the ability to upgrade low-
rank indigenous coal resources to a more clean burning, energy efficient fuel
could create the opportunity for nations with abundant coal resources to
generate hard currency export earnings from the sale of upgraded fuel product.
See "Risk Factors."
Recent Developments
In April 1996 the Company and Kennecott Alternative Fuels, Inc.
("KECC"), a wholly owned subsidiary of Kennecott Energy and Coal Company, formed
K-Fuel, L.L.C., a Delaware limited liability company ("K-Fuel LLC"). Pursuant to
the Limited Liability Company Agreement of K-Fuel LLC (the "Agreement"), K-Fuel
LLC will provide support for further technical advancement and the
commercialization of business opportunities arising out of the K-Fuel
Technology, including research and development, sublicensing, marketing and
consulting, but not including any actual construction of plants or facilities to
produce K-Fuel products on a commercial basis ("Commercial Projects").
Commercial Projects will be constructed by separate entities in which KECC, the
Company or both will have an equity interest and which will receive a sublicense
from K-Fuel LLC for the K-Fuel Technology.
Initially, the Company will have a 51% interest in K-Fuel LLC and
KECC will have a 49% interest . At such time as entities in which KECC has an
equity interest have placed into service Commercial Projects with a collective
design capacity equal to or in excess of 3 million tons of K-Fuel product per
annum, KECC will have a 51% interest in K-Fuel LLC and the Company will have a
49% interest. The initial capital contributions to K-Fuel LLC by KECC
7
<PAGE>
and the Company were $1,001,000 and $1,000, respectively. Subsequently, K-Fuel
LLC made a payment of $1,000,000 of such capital contribution to the Company in
consideration for the Company entering into the Agreement. KECC has also agreed
to pay to K-Fuel LLC such amounts as may be necessary for all research and
development costs incurred by K-Fuel LLC up to $4,000,000. KECC has the right to
terminate its obligation to fund research and development costs at any time upon
written notice to the Company. Upon such termination, the Company would have the
right and option to acquire all of KECC's interest in K-Fuel LLC for $1,000 and
KECC would no longer have an interest in K-Fuel LLC or the K-Fuel
Technology.
In connection with the Agreement, the Company granted K-Fuel LLC an
exclusive, worldwide, fully-paid, royalty-free right and license (including the
right to grant sublicenses) to and under the K-fuel Technology, except to the
extent that it pertains to the beneficiation or restructuring of coal or coal
related feedstocks under the Series A and Series B K-Fuel Technology (the "KFX
License"). In addition, Heartland Fuels Corporation, an 85% owned subsidiary of
the Company, granted K-Fuel LLC an exclusive, worldwide, fully-paid, royalty-
free right and license (including the right to grant sublicenses) to and under
the Series A and Series B K-Fuel Technology, as it pertains to the beneficiation
or restructuring of coal or coal related feedstocks (the "HFC License"). Both
the KFX License and the HFC License specify minimum terms and provisions for any
sublicenses granted by K-Fuel LLC to third parties.
The Company's principal executive offices are located at 1999
Broadway, Suite 3200, Denver, Colorado 80202, and its telephone number is (303)
293-2992.
USE OF PROCEEDS
The Company will receive no proceeds from the sale of the Common
Stock by the Selling Stockholders. However, the Company may receive a maximum of
$7,853,150 upon the exercise of the warrants and the stock options, which
proceeds will be used for working capital requirements and general corporate
purposes.
SELLING STOCKHOLDERS
The Common Stock is to be offered and sold from time to time by and
on behalf of the Selling Stockholders named in the following table, in the
manner and under the circumstances described on the cover page of this
Prospectus and under "Plan of Distribution." The following table sets forth for
each Selling Stockholder the number of shares of Common Stock beneficially owned
prior to the offering, the number of shares to be offered and, assuming that
each Selling Stockholder sells all of his/her shares, the number and percentage
of shares of Common Stock to be owned by each after completion of the offering.
8
<PAGE>
<TABLE>
<CAPTION>
Percentage
of
Common Common Outstanding
Stock Stock Common
Owned Common Owned Stock Owned
Stockholder Before Stock After After
Offering Offered Offering Offering
==============================================================================================
<S> <C> <C> <C> <C>
Eugene M. and Ann G. Anderson 27,500 27,500 -- --
Bergen Fondsmegler Forretning A/S 100,000 100,000 -- --
ENSERV Inc./(1)/ 375,000 375,000 -- --
Donald L. Ewart 15,000 15,000 -- --
Robert J. Frulla 31,000 31,000 -- --
William A. Gooch 13,000 13,000 -- --
C. Boyden Gray 12,500 12,500 -- --
Jack M. Grinwis 15,000 15,000 -- --
John C. Grisham 15,000 15,000 -- --
Donald K. Harness 15,385 15,385 -- --
Chantal A. Hickman 16,500 16,500 -- --
RHC Investments Client Account #7 5,000 5,000 -- --
Emily S. and Edward L. Larner 9,333 9,333 -- --
Alan L. Levick 6,667 6,667 -- --
Herbert Lichtenstein 3,125 3,125 -- --
M&H Investments Client Account #6 10,000 10,000 -- --
Al Nuzum Supply Co., Inc. 22,223 22,223 -- --
Olympic Consulting, Inc. 10,000 10,000 -- --
Henry D. Owen 15,000 15,000 -- --
Pequot Scout Fund, L.P. 35,000 35,000 -- --
Pequot Partners Fund, L.P. 85,000 85,000 -- --
Sally T. Pierce 26,667 26,667 -- --
Robert E. Pumphrey 11,900 11,900 -- --
Robert E. Pumphrey and Lisa 28,582 10,400 18,182 *
Pumphrey
Colin Rampton 906 906 -- --
RHC Investments 83-X1 4,630 4,630 -- --
RHC Investments 82-X1 500 500 -- --
Philip E. Ruppe 24,391 24,391 -- --
Scott A. Shuda 500 500 -- --
Smart & Therenet, P.C. 22,000 22,000 -- --
William H. Timbers 10,000 10,000 -- --
Pedro H. Valdes 17,000 17,000 -- --
Venners & Company, Ltd./(2)/ 40,000 40,000 -- --
J. Richard Welton 31,250 31,250 -- --
Olen Wilson, Jr. 10,000 10,000 -- --
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Percentage
of
Common Common Outstanding
Stock Stock Common
Owned Common Owned Stock Owned
Stockholder Before Stock After After
Offering Offered Offering Offering
====================================================================================================================================
<S> <C> <C> <C> <C>
Shares Underlying Warrants
Pequot Scout Fund, L.P. 37,500 37,500 -- --
Pequot International Fund, L.P. 87,500 87,500 -- --
Innovative Research Associates, Inc. 75,000 75,000 -- --
Peter G. Martin/(3)/ 75,000 75,000 -- --
Richard C. Whitner 100,000 100,000 -- --
John P. Demoleas 5,000 5,000 -- --
Shares Underlying
Stock Options
Starkey A. Wilson/(3)/ 1,269,100/(4)/ 150,000 1,119,100 5%
James A. Bitonti/(3)/ 490,050/(5)/ 50,000 440,050 2%
Jack C. Pester/(3)/ 67,126/(6)/ 50,000 17,126 *
Robert H. Gentile 80,000 80,000 -- --
Joyce M. Goldman/(7)/ 225,000/(8)/ 75,000 150,000 --
Jeffrey A. Hansen/(7)/ 30,000 30,000 -- --
Brenda S. Keiser/(7)/ 26,000 26,000 -- --
Jonathan W. Kohn/(7)/ 18,000 18,000 -- --
Michael L. Schlegal/(7)/ 26,000 26,000 -- --
Rudolph G. Swenson/(7)/ 245,100/(9)/ 95,000 150,100 *
Theodore Venners/(3)(7)/ 4,953,467/(10)(11)/ 50,000 4,903,467 22%
Kurt Eckrich/(3)(7)/ 601,000/(12)/ 600,000 1,000 *
Richard L. Eckrich 50,000/(14)/ 50,000 -- --
William L. Keepers/(13)/ 133,586/(15)/ 130,000 3,586 *
- ---------------------
</TABLE>
* Less than 1%
/(1)/ On August 18, 1995, the Company entered into an agreement with ENSERV,
Inc., whereby the Company agreed to purchase 800 shares of common stock of
Heartland Fuels Corporation for a purchase price of $250,000 in cash and 375,000
shares of Common Stock.
10
<PAGE>
/(2)/ On January 1, 1994, the Company entered into a consulting agreement with
Venners & Company, Ltd. pursuant to which the Company agreed to pay Venners &
Company, Ltd. a fixed monthly amount of $10,000 for consulting services.
/(3)/ Director of the Company.
/(4)/ Includes 150,000 shares to be acquired pursuant to the stock
options, some of which are not exercisable within 60 days of the date of
this Prospectus.
/(5)/ Includes 50,000 shares to be acquired pursuant to the stock
options, some of which are not exercisable within 60 days of the date of
this Prospectus.
/(6)/ Includes 50,000 shares to be acquired pursuant to the stock
options, some of which are not exercisable within 60 days of the date of
this Prospectus.
/(7)/ Employee of the Company.
/(8)/ Includes 75,000 Shares to be acquired pursuant to the stock
options, some of which are not exercisable within 60 days of the date of
this Prospectus.
/(9)/ Includes 95,000 Shares to be acquired pursuant to the stock
options, some of which are not exercisable within 60 days of the date of
this Prospectus.
/(10)/ Includes 50,000 shares to be acquired pursuant to the stock
options, some of which are not exercisable within 60 days of the date of
this Prospectus.
/(11)/ Includes 755,100 shares owned by a corporation of which Mr.
Venners owns 75% of the outstanding common stock.
/(12)/ Includes 600,000 shares to be acquired pursuant to stock options,
all of which are currently exercisable.
/(13)/ Former officer and director.
/(14)/ Includes 50,000 shares to be acquired pursuant to stock options,
all of which are exercisable within 60 days of the date of this
Prospectus.
/(15)/ Includes 130,000 shares to be acquired pursuant to stock options,
all of which are currently exercisable.
11
<PAGE>
PLAN OF DISTRIBUTION
The Common Stock may be offered by the Selling Stockholders from
time to time in one or more transactions for their own account on the American
Stock Exchange or in negotiated transactions. Sales will be at prices and on
terms then prevailing or at prices related to the current market price or at
negotiated prices and terms. The Common Stock may be sold by one or more of the
following methods: (a) a block trade in which the broker or dealer so engaged
will attempt to sell the Common Stock as agent, but may position and resell a
portion of the block as principal in order to consummate the transaction; (b)
purchase by a broker or dealer as principal, and the resale by such broker or
dealer for its account pursuant to this Prospectus, including resale to another
broker or dealer; or (c) ordinary brokerage transactions and transactions in
which the broker solicits purchasers. Any such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders or the purchasers of Common Stock for whom such broker-
dealers may act as agent or to whom they sell as principal, or both (which
compensation as to a particular broker-dealer might be in excess of customary
commissions). The Selling Stockholders and any broker-dealers that act in
connection with the sale of the Common Stock may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act and any commissions
received by them and any profit on the resale of the Common Stock as principal
might be deemed to be underwriting discounts and commissions under the
Securities Act.
The Common Stock covered by this Prospectus may be sold under Rule
144 rather than this Prospectus if they qualify for sale under Rule 144. As of
the date of this Prospectus, 55,800 shares of such Common Stock may qualify for
resale under Rule 144.
12
<PAGE>
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement
on Form S-3 (herein, together with all amendments and exhibits, referred to as
the "Registration Statement") under the Securities Act with respect to the
Common Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which have
been omitted in accordance with the rules and regulations of the Commission.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to are not necessarily complete, and in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit or incorporated by reference to the Registration Statement of which this
Prospectus forms a part, each such statement being qualified in all respects by
such reference. For further information with respect to the Company and the
Common Stock offered hereby, reference is made to the Registration Statement.
Copies of the Registration Statement may be inspected, without charge, at the
offices of the Commission, or obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549.
LEGAL MATTERS
Certain legal matters relating to the Common Stock to be offered
hereby will be passed upon for the Company by Kutak Rock, Suite 2900, 717
Seventeenth Street, Denver, Colorado 80202.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference to the Annual Report on Form 10-KSB for the year ended
December 31, 1995, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in accounting and auditing.
13
<PAGE>
No dealer, salesperson or any other person has been authorized to give
any information or to make any representations in connection with this offering,
other than those made in this Prospectus and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Company or the Underwriters. Neither the delivery of this Prospectus nor any
sale made hereunder shall under any circumstance create an implication that
there has been no change in the facts set forth in this Prospectus or in the
affairs of the Company since the date hereof. This Prospectus does not
constitute an offer or solicitation by anyone in any state in which such offer
or solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to anyone whom it is unlawful to make
such offer or solicitation.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
-------------------------------------------------------------------------------
Page
----
AVAILABLE INFORMATION ........................ 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE .................... 2
RISK FACTORS ................................. 3
THE COMPANY .................................. 7
USE OF PROCEEDS .............................. 8
SELLING STOCKHOLDERS ......................... 8
PLAN OF DISTRIBUTION ......................... 12
LEGAL MATTERS ................................ 13
EXPERTS ...................................... 13
2,857,377 Shares
KFX INC.
COMMON STOCK
----------
PROSPECTUS
----------
_________, 1996
================================================================================
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses to be borne by the
registrant, other than underwriting discounts and commissions, in connection
with the issuance and distribution of the Common Stock hereunder.
<TABLE>
<CAPTION>
Payable by
the
Registrant
-----------
<S> <C>
SEC registration fee.......... $ 5,552.00
Accounting fees and expenses.. 5,000.00
Legal fees and expenses....... 10,000.00
Printing costs................ 2,000.00
Blue Sky fees and expenses.... 1,000.00
Miscellaneous.................
Total.................... $23,552.00
==========
</TABLE>
The foregoing items, except for the SEC registration fee, are
estimated.
Item 15. Indemnification of Directors and Officers.
Section 102(b)7 of the Delaware General Corporation Law (the "DGCL")
enables a corporation in its original certificate of incorporation or an
amendment thereto to eliminate or limit the personal liability of a director for
violations of the director's fiduciary duty, except (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing
for liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions), or (iv) for any transaction from which a director
derived an improper personal benefit.
Section 145 of the DGCL provides that directors and officers of
Delaware corporations may, under certain circumstances, be indemnified against
expenses (including attorneys' fees) and other liabilities actually and
reasonably incurred by them as a result of any suit brought
II-1
<PAGE>
against them in their capacity as a director or officer, if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, if they had no reasonable cause to believe their conduct was
unlawful. Section 145 also provides that directors and officers may also be
indemnified against expenses (including attorneys' fees) incurred by them in
connection with a derivative suit if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made without court approval
if such person was adjudged liable to the corporation.
The Company has implemented such indemnification provisions in its
Certificate of Incorporation which provides that officers and directors shall be
entitled to be indemnified by the Company to the fullest extent permitted by law
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement incurred in connection with any action, suit or proceeding by
reason of the fact that he or she is or was an officer or director of the
Company.
The above discussion of the Company's Certificate of Incorporation
and Sections 102(b)(7) and 145 of the DGCL is not intended to be exhaustive and
is qualified in its entirety by such Certificate of Incorporation and statutes.
Item 16. Exhibits.
The following is a complete list of exhibits filed as part of the
Registration Statement. Exhibit numbers correspond to the numbers in the Exhibit
Table of Item 601 of Regulation S-K.
5.1 Opinion of Kutak Rock as to the legality of the Common Stock
being registered.
23.1 Consent of Kutak Rock (see Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP.
24.1 Powers of Attorney.
Item 17. Undertakings.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(b) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof)
II-2
<PAGE>
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed what was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(c) to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (1)(a) and (1)(b) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
undersigned pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Pre-
Effective Amendment No. 1 to the registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Denver,
State of Colorado, on the 13th day of June, 1996.
KFX INC.
(Registrant)
By: /s/ THEODORE VENNERS
-------------------------------------------
Theodore Venners, Chairman, President and
Chief Executive Officer
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
*
____________________ Director June 13, 1996
James A. Bitonti
/s/ Kurt B. Eckrich
____________________ Director June 13, 1996
Kurt B. Eckrich
*
____________________ Director June 13, 1996
Brian D. Holt
*
____________________ Director June 13, 1996
Peter G. Martin
*
____________________ Director June 13, 1996
Jack C. Pester
/s/ Rudolph G. Swenson
____________________ Secretary, Treasurer and Chief June 13, 1996
Rudolph G. Swenson Financial Officer
*
____________________ Chairman of the Board of Directors, June 13, 1996
Theodore Venners President and Chief Executive Officer
*
____________________ Director June 13, 1996
Starkey A. Wilson
</TABLE>
*By /s/ Theodore Venners
==================================
II-4
<PAGE>
Theodore Venners, as Attorney-in-Fact
================================================================================
II-5
<PAGE>
EXHIBIT INDEX
5.1 Opinion of Kutak Rock as to the legality of the Common Stock
being registered./**/
23.1 Consent of Kutak Rock (see Exhibit 5.1)./**/
23.2 Consent of Price Waterhouse LLP./*/
24.1 Powers of Attorney./**/
* Filed herewith.
** Previously filed.\\
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Amendment No. 1 to the Registration Statement on Form
S-3 of our report dated March 29, 1996, which appears on page F-2 of KFx Inc.'s
Annual Report on Form 10-KSB for the year ended December 31, 1995. We also
consent to the reference to us under the headings "Experts" in such
Prospectus.
PRICE WATERHOUSE LLP
Denver, Colorado
June 13, 1996
