-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BMIlqPyCMt+0y2ZrJe5zwGoVGMYEmZ0ppzoHmXph3G/YKPVS5W5pTqtEkc4ja/yf 0GKJiAGxc/p9mR+EkkMAVg== 0000950123-96-005465.txt : 19961009 0000950123-96-005465.hdr.sgml : 19961009 ACCESSION NUMBER: 0000950123-96-005465 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960719 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961008 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KTI INC CENTRAL INDEX KEY: 0000931581 STANDARD INDUSTRIAL CLASSIFICATION: COGENERATION SERVICES & SMALL POWER PRODUCERS [4991] IRS NUMBER: 222665282 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-25490 FILM NUMBER: 96640702 BUSINESS ADDRESS: STREET 1: 7000 BLVD E CITY: GUTTENBERG STATE: NJ ZIP: 07093 BUSINESS PHONE: 2018547777 MAIL ADDRESS: STREET 1: 7000 BOULEVARD EAST CITY: GUTTENBERG STATE: NJ ZIP: 07093 8-K/A 1 KTI, INC AMENDMENT TO FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------------------------- FORM 8-KA CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 19, 1996 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) 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On July 19, 1996 KTI, Inc. (the "Company" or the "Registrant") and its wholly-owned subsidiary DataFocus Incorporated ("DataFocus"), executed an Agreement with CIBER, Inc. ("CIBER"). Pursuant to the Agreement, DataFocus sold substantially all of the assets of DataFocus' Business Systems Division, other than cash and accounts receivable, to CIBER for $5,000,000, subject to customary prorations, on July 26, 1996. DataFocus retained cash, accounts receivables and substantially all of the liabilities of its Business Systems Division that arose prior to July 26, 1996. The net proceeds of such sale, including cash and accounts receivable retained, less related liabilities, are approximately $4,250,000. DataFocus has distributed approximately $3,500,000 in cash to the Company and also distributed Business Systems Division accounts receivable having a net value of approximately $900,000. Of those sums, approximately $150,000 will be used to pay transaction costs of KTI, relating to the sale. Additionally, on July 29, 1996, the Company sold the stock of DataFocus to certain members of the management of DataFocus. Pursuant to the sale, the Company will receive $5,000 in cash, the cancellation of stock options issued to DataFocus management to purchase 132,328 shares of the Company's common stock, the cancellation of an option to purchase 20% of the common stock of DataFocus, and a royalty agreement. Under the royalty agreement, the Company will receive a monthly base royalty payment of $5,000 and quarterly payments of additional royalties, equal to 5% of net revenue from the sale of NuTCRACKER software product in excess of $4,000,000 per year. DataFocus will have the right to repurchase the royalty agreement from the Company for the following payments: A. $400,000 prior to July 29, 1997; B. Three times the royalty payments due to the Company for the twelve months immediately prior to the date of notice of repurchase, if given on or after July 29, 1997 but before July 29, 1998; C. Two times the royalty payments due to the Company for the twelve months immediately prior to the date of notice of repurchase, if given on or after July 29, 1998 but before July 29, 1999; or D. An amount equal to the royalty payments due to the Company for the twelve months immediately prior to the date of notice of repurchase, if given after July 29, 1999. As part of the sale of DataFocus to its management, the Company agreed to loan up to $500,000 to certain members of the management of DataFocus, including Thomas A. Bosanko, who was a director of the Company through August 13, 1996. The loan bears interest of 8% per annum and provides for level quarterly principal payments to repay the loan over a four year period. The loan is secured by Company common stock owned by the such members of management of DataFocus. The royalty agreement provides that royalty payments to the Company terminate three years after the repayment of the loans. The Company will use the distribution from DataFocus to pay maturing debt and to augment its working capital. 3 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Pro forma Financial information The following pro forma condensed balance sheet is based on the historical financial statements of the Company at June 30, 1996. The pro forma condensed balance sheet assumes that the Company's wholly owned subsidiary, DataFocus, Inc. was sold prior to the end of the stated period. (b) Exhibits Exhibit Number DESCRIPTION - -------------- ----------- 2.1 Agreement dated as of July 19, 1996 by and among KTI, Inc., DataFocus Incorporated and CIBER, Inc. The schedules to this exhibit do not contain information which is material to an investment decision and which is not otherwise disclosed in the Agreement. The contents of the schedules include, among other thing, lists of assets, employees, and contracts, purchase price and expense allocations, legal opinions, non-compete and employment agreements, descriptions of benefit plans and financial statements. The Company hereby agrees to furnish supplementally a copy of any omitted schedule to the Commission upon request. (Filed as an exhibit to registrant's current report on Form 8-K dated July 19, 1996.) 2.2 Agreement dated July 19, 1996 by and among KTI, Inc., Thomas A. Bosanko and Patrick B. Higbie. (Filed as an exhibit to registrant's current report on Form 8-K dated July 19, 1996.) 4 KTI, INC. PRO FORMA CONDENSED BALANCE SHEET (UNAUDITED) JUNE 30, 1996
KTI, INC. ELIMINATION OF KTI, INC. WITHOUT ACTUAL DATAFOCUS DATAFOCUS ------ --------- --------- ASSETS Current Assets Cash and cash equivalents $ 762,760 $ 3,525,721 a $ 3,882,429 (300,000) c (106,052) b Restricted funds - current portion 7,130,657 150,000 d 7,280,657 Accounts receivable 5,359,834 (1,156,834) b 4,203,000 Notes receivable--officers/shareholders and affiliates - current 143,340 143,340 Other receivables - current portion 265,386 265,386 Other current assets 521,200 (177,974) b 343,226 ------------ ----------- ------------ Total current assets 14,183,175 1,934,861 16,118,036 Restricted funds 148,591 -- 148,591 Management fees receivable--affiliates 2,573,912 -- 2,573,912 Notes receivable - officers/shareholders and affiliates 67,931 -- 67,931 Other receivables 410,769 300,000 c 710,769 Investment in PERC 3,592,568 3,592,568 Deferred costs 165,967 165,967 Goodwill and other intangibles 1,891,604 (1,891,604) a 0 Other assets 1,458,684 (479,163) b 979,521 Property, equipment and leasehold improvements 82,234,821 (624,365) b 81,610,456 ------------ ----------- ------------ $106,728,023 $ (760,271) $105,967,752 ============ =========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 3,384,594 $ (488,535) b $ 2,896,059 Accrued expenses 2,210,070 (170,284) b 2,189,786 150,000 a Current portion of long-term debt 9,266,408 9,266,408 Income taxes payable 290,000 290,000 Other current liabilities 634,769 (634,769) b (0) ------------ ----------- ------------ Total current liabilities 15,785,839 (1,143,588) 14,642,251 Other liabilities 131,216 150,000 d 281,216 Long-term debt, less current portion 17,327,216 -- 17,327,216 Minority interest - Maine Energy 10,418,242 -- 10,418,242 Deferred gain 44,062,500 44,062,500 Commitments and contingencies Stockholders' equity Preferred stock; 10,000,000 shares authorized, no shares issued or outstanding Common stock, no par value (stated value $.01 per share); authorized 11,992,000; issued and outstanding 5,737,417 57,375 -- 57,375 Additional paid-in capital 33,940,831 33,940,831 Accumulated (deficit) (14,995,196) 233,317 a (14,761,879) ------------ ----------- ------------ Total stockholders' equity 19,003,010 233,317 19,236,327 ------------ ----------- ------------ $106,728,023 $ (760,271) $105,967,752 ============ =========== ============
5 KTI, INC. PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (UNAUDITED) YEAR ENDED DECEMBER 31, 1995
KTI, INC. ELIMINATION OF KTI, INC. WITHOUT ACTUAL DATAFOCUS DATAFOCUS ------ --------- --------- Revenues: Electric power revenues $26,470,093 $26,470,093 Waste processing revenues 8,049,858 8,049,858 Other waste handling revenues 3,562,560 3,562,560 Computer services revenues 10,198,851 (10,198,851) (1) -- ----------- ----------- ----------- Total revenues 48,281,362 (10,198,851) 38,082,511 Costs and expenses: Electric power and waste processing operating costs 26,139,179 26,139,179 Costs of software sales and contracts 4,678,446 (4,678,446) (1) -- Selling, general and administrative: Waste handling 2,940,941 2,940,941 Computer services 5,606,302 (5,606,302) (1) -- Interest - net 9,378,605 28,522 (1) 9,407,127 ----------- ----------- ----------- Total costs and expenses 48,743,472 (10,256,225) 38,487,247 Equity in net income of PERC 334,844 334,844 ----------- ----------- ----------- Loss before minority interest, income taxes and extraordinary item (127,267) 57,374 (69,892) Minority interest in Maine Energy 1,287,005 1,287,005 ----------- ----------- ----------- Loss before income taxes and extraordinary item (1,414,271) 57,374 (1,356,897) Income taxes 65,000 (65,000) (1) -- ----------- ----------- ----------- Loss before extraordinary item (1,479,271) 122,374 (1,356,897) Extraordinary item: Gain on extinguishment of debt 147,778 147,778 ----------- ----------- ----------- Net loss (1,331,493) 122,374 (1,209,119) =========== =========== =========== Pro forma earnings (loss) per common share and common share equivalent: Extraordinary item $ 0.03 $ 0.03 Net loss $ (0.27) $ (0.24) =========== =========== Pro forma weighted average number of common shares and common share equivalents outstanding 5,013,140 5,013,140 =========== ===========
6 KTI, INC. JUNE 30, 1996 NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. DESCRIPTION OF TRANSACTION On July 26, 1996 the Company and its wholly-owned subsidiary DataFocus, Incorporated ("DataFocus"), completed the sale of substantially all the assets of DataFocus' Business Systems Division, other than cash and accounts receivable, to CIBER, INC. for 5,000,000, subject to customary prorations. DataFocus retained substantially all of the liabilities of its Business Systems Division that arose prior to July 26, 1996. Additionally, on July 29, 1996, the Company sold the stock of DataFocus to certain members of the management of DataFocus. Pursuant to the sale, the Company will receive $5,000 in cash, the cancellation of stock options issued to DataFocus management to purchase 132,328 shares of the Company's common stock and the cancellation of their option to purchase 20% of the common stock of DataFocus, and a royalty agreement. 2. PRO FORMA ADJUSTMENTS BALANCE SHEET (a) Record proceeds from disposed business as a result of the sale of fixed assets and sale of stock and recording effects of such sales: Cash received from sale of disposed business, net of transaction costs of $1,474,279 $3,525,721 Write off of goodwill related to disposed business 1,891,604 Record accrual for closing expenses 150,000 Gain on sale of disposed business 233,317
(b) Elimination of balances related to disposed business at June 30, 1996. (c) Record note receivable issued to management of DataFocus as a result of the sale of stock from the management as described earlier. (d) Establish escrow cash account and the related liability for future contractual obligations of disposed business which the Company had guaranteed. Such accrual will satisfy entire future liability. 7 STATEMENT OF OPERATIONS (1) Elimination of DataFocus' Statement of Operations for the period ended December 31, 1995. For the six months ended June 30, 1996, DataFocus' operations were reported by the Company as a discontinued operation. 8 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. ----------------------------------------- (Registrant) Dated: October 8, 1996 By: /s/ Martin J. Sergi ---------------------------------- Name: Martin J. Sergi Title: President, Chief Operating Officer -----END PRIVACY-ENHANCED MESSAGE-----