SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 28, 1997
KTI, INC.
(Exact name of Registrant as specified in Charter)
New Jersey 33-85234 22-2665282
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification
Number
7000 Boulevard East, Guttenberg, New Jersey 07093
(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code (201) 854-7777
Not Applicable
(Former name and former address, as changed since last report)
ITEM 5. OTHER EVENTS
On the date hereof, the Company is filing with the Securities and Exchange
Commission a Registration Statement on Form S-3 which, among other things,
discusses two proposed unregistered offerings. The text of such discussion is
reprinted below:
The Company is presently in negotiations to issue, in one or more
privately negotiated transactions, up to 477,500 shares of a new Series A
Convertible Preferred Stock (the "Series A Preferred"). The Series A Preferred,
which will not have been registered under the Act and which would not be subject
to offer or sale in the United States absent registration or an applicable
exemption from registration requirements, is expected to not pay dividends and
be callable at the end of five years by the Company at a premium. The Series A
Preferred Stock is expected to be convertible into Common Stock of the Company
at $8.00 per share. In addition, it is anticipated that the Series A Preferred
holders will receive detachable warrants, exercisable at a price of $9.00 per
share and having an expiration date six years from the date the Series A
Preferred were issued. The Company, under the proposed terms, would be able to
compel conversion of the Series A Preferred under certain circumstances.
It is anticipated that the Series A Preferred would be junior to the
Company's preferred stock with no conversion features or associated warrants,
and would be pari passu to other convertible preferred series. The Series A
Preferred would be senior to Common Stock in the event of liquidation, sale or
merger of the Company. The Series A Preferred holders would be entitled to
registration of the underlying shares of Common Stock within 120 days of
closing. The Company expects that the Series A Preferred holders would have the
right to nominate one person for election to the Board of Directors.
In addition, the Company is presently in negotiations to issue, in one or
more privately negotiated transactions, up to $15 million of a new Series B
Convertible Preferred Stock (the "Series B Preferred"). The Series B Preferred,
which will not have been registered under the Act and which would not be subject
to offer or sale in the United States absent registration or an applicable
exemption from registration requirements, is expected to have a market rate
coupon and be redeemable on the seventh anniversary of issue at its liquidation
value. The Series B Preferred is expected to be callable, after the third
anniversary of its issuance at a premium, which premium is expected to decline
to zero by the sixth anniversary of the issuance of the Series B Preferred. The
Series B Preferred is expected to be convertible into Common Stock of the
Company at a price per share representing a premium above the per share price on
the date of issue. The Company, under the proposed terms, would be able to
compel conversion of the Series B Preferred under certain circumstances.
The Company, under the proposed terms, would be able to compel an exchange
of all of the then outstanding Series B Preferred for subordinated convertible
debt of the Company at any time on a dividend payment date. The subordinated
convertible debt would have similar terms and an equivalent interest rate,
without adjustment for the dividend received deduction. It is anticipated that
the Series B Preferred holders may require the Company to redeem the Series B
Preferred in the event of a change of control of the Company.
It is anticipated that the Series B Preferred would be pari passu with the
Series A Preferred and would be senior to Common Stock in the event of
liquidation, sale or merger of the Company. The Series B Preferred holders may
prohibit the issuance of preferred stock senior to Series B Preferred or pari
passu with it, unless certain financial ratios have been obtained. The Series B
Preferred holders would be entitled to registration of the Series B Preferred
and the underlying shares of Common Stock within 180 days of closing.
There can be no assurance that the Company will issue either the Series A
Preferred or the Series B Preferred, or, if issued, that the terms thereof will
not be materially adversely different from the terms described above.
SIGNATURES
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.
KTI, Inc.
(the Registrant)
Dated: May 28, 1997 By: /s/ Martin J. Sergi
Name: Martin J. Sergi
Title: President
