Supplement No. 1
to
Schedule 14C
Information Statement
of
Conversion Technologies International, Inc.
dated
July 26, 1999
The following disclosure should be inserted at the end of the section entitled
"Increase in Authorized Common Stock and Merger" on page 6 of the Information
Statement:
While the Company could have sought to effect the Charter Amendment
without the Merger, in order to do so the Company would have been required to
obtain approval of the holders of a majority of the outstanding Common Stock
voting separately as a class. To avoid the added time, expense and uncertainty
involved in soliciting the votes of common stockholders, and in light of the
Company's immediate need for capital, the Company decided not to pursue that
route.
Significant Dilution to Voting Power of Common Stockholders
As of July 9, 1999, the total number of votes entitled to be cast by
Common Stockholders was 6,947,045 and by Series A Preferred Stockholders was
10,916,600. If all of the Series B Preferred Stock offered in the Series B
Preferred Financing is sold, the holders of the Series B Preferred Stock would
be entitled to 100,000,000 votes on all matters submitted to stockholders for
vote. Accordingly, on all matters for which all shares of the outstanding stock
are entitled to vote together as a class, the Series B Preferred Stockholders
will have a controlling vote. Moreover, purchasers of large blocks of Series B
Preferred Stock could have a controlling vote on an individual basis. In an
effort to raise needed funds quickly and efficiently, the Company has decided to
target the Series B Preferred Financing primarily to the limited group of
existing Series A Preferred Stockholders (who already hold a majority of the
voting power relating to the Company's outstanding shares). As a result, the
Series B Preferred Financing will result in significant dilution to the voting
power of Common Stockholders in favor of the Series A Preferred Stockholders and
Series B Preferred Stockholders.
