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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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):
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)
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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 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, 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, a director of the Company. 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.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Proforma Financial information
It is impractical to provide the required proforma financial information as
quarterly financial statements for the Company are not yet available. The
required proforma financial information will be filed as soon as practical,
following the completion of the quarterly statements for the Company, but not
later than September 27, 1996.
(b) Exhibits
Exhibit Number DESCRIPTION
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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.
2.2 Agreement dated July 19, 1996 by and among KTI, Inc., Thomas
A. Bosanko and Patrick B. Higbie
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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.
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(Registrant)
Dated: July 29, 1996 By:
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Name: Robert E. Wetzel
Title: Senior Vice President
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EXHIBITS INDEX
Exhibit Number DESCRIPTION
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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.
2.2 Agreement dated July 19, 1996 by and among KTI, Inc., Thomas
A. Bosanko and Patrick B. Higbie