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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2 TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
CONVERSION TECHNOLOGIES INTERNATIONAL, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.00025 PER SHARE
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(Title of Class of Securities)
212546105
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(CUSIP Number)
Paramount Capital Asset Management, Inc.
c/o Lindsay A. Rosenwald, M.D.
787 Seventh Avenue
New York, NY 10019
(212) 554-4300
with a copy to:
David R. Walner, Esq.
Paramount Capital Asset Management, Inc.
787 Seventh Avenue
New York, NY 10019
(212) 554-4372
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
JUNE 5, 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 which is the subject of this Statement because of Rule
13d-1(b)(3) or (4), check the following:
[ ]
Check the following box if a fee is being paid with this Statement:
[ ]
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<PAGE>
CUSIP No. [212546105] 13 D Page 2 of 8 Pages
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Paramount Capital Asset Management, Inc.
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [_]
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3) SEC USE ONLY
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4) SOURCE OF FUNDS*
OO (see Item 3 below)
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5) CHECK BOX 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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7) SOLE VOTING POWER
NUMBER OF none
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY
EACH REPORTING 1,618,945
PERSON --------------------------------------------------------------
WITH 9) SOLE DISPOSITIVE POWER
none
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10) SHARED DISPOSITIVE POWER
1,618,945
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,618,945
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.6%
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14) TYPE OF REPORTING PERSON*
CO
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CUSIP No. [212546105] 13 D Page 3 of 8 Pages
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Aries Domestic Fund, L.P.
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [_]
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3) SEC USE ONLY
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4) SOURCE OF FUNDS*
OO (see Item 3 below)
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5) CHECK BOX 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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7) SOLE VOTING POWER
NUMBER OF None
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 584,608
EACH REPORTING
PERSON --------------------------------------------------------------
WITH 9) SOLE DISPOSITIVE POWER
None
--------------------------------------------------------------
10) SHARED DISPOSITIVE POWER
584,608
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
584,608
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
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14) TYPE OF REPORTING PERSON*
PN
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<PAGE>
CUSIP No. [212546105] 13 D Page 4 of 8 Pages
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Aries Fund, A Cayman Island Trust
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [_]
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3) SEC USE ONLY
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4) SOURCE OF FUNDS*
OO (see Item 3 below)
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5) CHECK BOX 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
Cayman Islands
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7) SOLE VOTING POWER
None
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 1,034,337
EACH REPORTING
PERSON --------------------------------------------------------------
WITH 9) SOLE DISPOSITIVE POWER
None
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10) SHARED DISPOSITIVE POWER
1,034,337
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,034,377
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.7%
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14) TYPE OF REPORTING PERSON*
OO (see Item 2)
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CUSIP No. [212546105] 13 D Page 5 of 8 Pages
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1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lindsay A. Rosenwald, M.D.
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2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [_]
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3) SEC USE ONLY
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4) SOURCE OF FUNDS*
OO (see Item 3 below)
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5) CHECK BOX 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
United States
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7) SOLE VOTING POWER
NUMBER OF 205,134
SHARES -------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 1,618,945
EACH REPORTING --------------------------------------------------------------
PERSON 9) SOLE DISPOSITIVE POWER
WITH 205,134
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10) SHARED DISPOSITIVE POWER
1,618,945
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11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,824,079
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12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
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13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
24.8%
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14) TYPE OF REPORTING PERSON*
IN
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<PAGE>
SCHEDULE 13D
This Amendment No. 2 (the "Amendment") amends and supplements the
following Items of the Reporting Persons' Statement on Schedule 13D, dated
September 4, 1997, as amended to date, (the "Schedule").
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information contained in Item 3 to the Schedule is hereby amended
and restated to read in its entirety as follows:
On December 7, 1995, Aries Domestic used its general funds to
extend a bridge loan (a "Bridge Loan") to the Issuer in the
amount of $125,000 for which it received 62,500 Class A Warrants
(the "Class A Warrants") and the Aries Trust used its general
funds to extend a Bridge Loan to the Issuer in the amount of
$75,000 for which it received 37,500 Class A Warrants./1/ Each
Class A Warrant entitles its holder to acquire (a) one (1) share
of common stock of the Issuer par value $.00025 (the "Common
Stock") and (b) one (1) Class B Warrant (the "Class B Warrants")
to acquire one (1) share of Common Stock. The Class A Warrants
are presently exercisable at $4.42 per share of Common Stock and
the Class B Warrants will be exercisable, when issued, at $5.89
per share of Common Stock (subject to adjustment). The Class A
Warrants and the Class B Warrants will expire on May 16, 2001. On
July 21, 1997, Aries Domestic used its general funds to extend a
line of credit (a "Line of Credit") to the Issuer in the amount
of $154,000 for which Aries Domestic received warrants (the
"Original LOC Warrants") to purchase 35,000 shares of Common
Stock of the Issuer and the Aries Trust used its general funds to
extend a Line of Credit to the Issuer in the amount of $346,000
for which the Aries Trust received Original LOC Warrants to
purchase 65,000 shares of Common Stock of the Issuer./2/ The
Original LOC Warrants are presently exercisable at $.99 per share
of Common Stock and will expire on July 21, 2002. In addition, on
August 29, 1997, in a private placement (the "Private Placement")
of the Issuer's securities, Aries Domestic used its general funds
to purchase 3.4 units the "Units" for an aggregate purchase price
of $340,000, with each Unit consisting of 10,000 shares of
Preferred Stock (the "Preferred Stock"). The 3.4 Units held by
Aries Domestic are presently convertible into 380,800/3/ shares
of Common Stock of the Issuer. The Aries Trust used its general
funds to purchase 6.6 Units in the Private Placement for an
aggregate purchase price of $660,000, which 6.6 Units are
presently convertible into 739,200/4/ shares of Common Stock of
the Issuer. In connection with the Private Placement, Paramount
Capital, Inc. (the "Placement Agent"), designated recipients of
warrants to purchase
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/1/ Pursuant to certain antidilution adjustments, Aries Domestic and Aries
Trust currently own 82,721 and 49,632 Class A Warrants, respectively.
/2/ Pursuant to certain antidilution adjustments, Aries Domestic and Aries
Trust currently own Original LOC Warrants to purchase 46,401 and 86,174
shares of Common Stock, respectively.
/3/ Reflects certain antidilution adjustments and the issuance of additional
shares of Preferred Stock to purchasers of Units in the Private Placement.
/4/ Reflects certain antidilution adjustments and the issuance of additional
shares of Preferred Stock to purchasers of Units in the Private Placement.
Page 6 of 8 pages
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10% of the Units sold in the Private Placement exercisable for ten
years at 110% of the offering price per unit sold in the Private
Placement (the "Placement Warrants"). The Placement Agent designated
The Aries Trust, Aries Domestic and Dr. Rosenwald as designated
recipients of Placement Warrants to purchase 7,393, 3,809 and 16,041
shares of Preferred Stock respectively (convertible into 73,931,
38,086 and 160,407 shares of Common Stock, respectively). On May 8,
1998, Aries Trust and Aries Domestic (together, the "Funds", agreed to
extend a line of credit (the "New Line of Credit") to the Issuer in an
amount up to $1,200,000 for which the Funds received warrants ("New
LOC Warrants") to purchase 240,000 shares, in the aggregate, of the
Issuer's common stock. The New LOC Warrants shall vest and become
immediately exercisable by the Funds for Twenty Thousand (20,000)
shares of common stock per $100,000 drawn down by the Issuer upon any
draw down. Pursuant to the New Line of Credit, on May 8, 1998, the
Issuer drew down $300,000, of which $210,000 was extended by the Aries
Trust and $90,000 was extended by Aries Domestic. Accordingly, the
Aries Trust's New LOC Warrant vested with respect 42,000 shares of
common stock and Aries Domestic's New LOC Warrant vested with respect
to 18,000 shares of common stock. Pursuant to the New Line of Credit,
on June 5, 1998, the Issuer drew down $310,000, of which $217,000 was
extended by the Aries Trust and $93,000 was extended by Aries
Domestic. Accordingly, the Aries Trust's Warrant vested with respect
43,400 shares of common stock and Aries Domestic's New LOC Warrant
vested with respect to 18,600 shares of common stock. The New LOC
Warrants are presently exercisable at $1.00 per share of Common Stock
and will expire on May 8, 2003.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
The information contained in Item 5 to the Schedule is hereby amended
and restated to read in its entirety as follows:
(a) As of June 5, 1998, Paramount Capital, through
acquisition of the shares by the Aries Trust and
Aries Domestic, beneficially owned 1,618,945 shares
or 22.6% of the Issuer's securities and Aries
Domestic and the Aries Trust beneficially owned as
follows:
AMOUNT OWNED
Aries Domestic 584,608 Shares
Aries Trust 1,034,337 Shares
As of June 5, 1998, Dr. Rosenwald, through his
acquisition of the shares and the acquisition of the
shares by the Aries Trust and Aries Domestic,
beneficially owned 1,824,079 shares or 24.8% of the
Issuer's securities
(b) Dr. Rosenwald and Paramount Capital share the power
to vote or to direct the vote, to dispose or to
direct the disposition of those shares owned by each
of Aries Domestic and Aries Trust.
(c) No open market transactions were made by Aries
Domestic and the Aries Trust in the past 60 days.
Other than as set forth herein the Reporting Parties
have not engaged in any transactions in the Common
Stock of the Issuer during the past 60 days.
(d) & (e) Not applicable.
Page 7 of 8 pages
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
PARAMOUNT CAPITAL ASSET MANAGEMENT, INC.
Dated: June 10, 1998
New York, NY By /S/ LINDSAY A. ROSENWALD, M.D.
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Lindsay A. Rosenwald, M.D.
President
ARIES DOMESTIC FUND, L.P.
By Paramount Capital Asset Management,
Inc.
General Partner
Dated: June 10, 1998
New York, NY By /S/ LINDSAY A. ROSENWALD, M.D.
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Lindsay A. Rosenwald, M.D.
President
THE ARIES TRUST
By Paramount Capital Asset Management,
Inc.
Investment Manager
Dated: June 10, 1998
New York, NY By /S/ LINDSAY A. ROSENWALD, M.D.
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Lindsay A. Rosenwald, M.D.
President
Dated: June 10, 1998
New York, NY By /S/ LINDSAY A. ROSENWALD, M.D.
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Lindsay A. Rosenwald, M.D.
Page 8 of 8 pages
