UNITED STATES
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): March 28, 2002
KFX INC.
--------
(Exact name of Registrant as specified in its charter)
Delaware 0-23634 84-1079971
------------ ----------- --------------
(State or other jurisdiction of Commission File Number IRS Employer
incorporation or organization) Identification Number
3300 East 1/st/ Avenue, Suite 290
Denver, Colorado, USA 80206
---------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
(303) 293-2992
--------------
(Registrant's telephone number,
including area code)
not applicable
--------------
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
As described in the KFx Inc. ("KFx") press release dated April 2, 2002, KFx made
the final guaranteed purchase installment payment to Pavilion Technologies, Inc.
("Pavilion") on March 28, 2002 on behalf of its majority-owned subsidiary,
Pegasus Technologies, Inc. ("Pegasus"), a South Dakota Corporation, on favorable
terms. By making the early payment, the remaining guaranteed purchase payments
were reduced from $6.5 million to $4.5 million.
KFx arranged financing for the payment to Pavilion through a private placement
of common stock and warrants completed on March 28, 2002. The terms of the
private placement included the sale of 2 million shares of common stock at $2.50
per share and warrants to purchase 2.25 million shares of common stock at a
purchase price of $2.75 per common share, subject to adjustment. KFx agreed
with the investors to file a registration statement with the Securities and
Exchange Commission to register the common stock and warrants issued as part of
this financing. If KFx does not file this registration statement by April 30,
2002, then KFx must issue to each investor an additional warrant to acquire the
number of shares of common stock equal to 10% of the number of shares of common
stock issuable on exercise of the warrants originally issued to each investor.
Thereafter, KFx must continue to issue additional warrants at the end of each
subsequent 30-day period if the registration statement remains unfiled. These
new warrants will have the same terms and conditions as the original warrants
issued to the investors.
All of the shares issued as part of this financing are subject to a "put and
call" option, which requires KFx to repurchase these shares at a price of $2.50
per share (subject to adjustment for subsequent dilutive offerings) plus 9%
simple interest per year if exercised by the investors. The put option becomes
effective either on July 31, 2002 or upon the redemption or conversion of all of
KFx's 6% convertible debentures issued under their indenture dated as of July
25, 1997, between KFx and First Bank National Association, doing business as
Colorado National Bank, as trustee. Management believes the terms of the put
option, if exercised, provide sufficient time to secure the necessary funding
through sales of assets or securities in an orderly manner. If two-thirds or
more of the investors exercise their put option and KFx is unable to secure the
necessary funding to satisfy these exercised put options within the time
provided by the put and call option, then KFx must transfer its interests in all
the shares of common stock and preferred stock of Pegasus to the investors. The
put and call option also provides KFx the right to call the shares at a premium
of 25% plus 9% interest during the time the shares were outstanding if the put
option adversely affects future financing. The put option expires at 11:59
p.m., California time, on December 23, 2002. Additionally, KFx has agreed to
nominate two persons selected by the investors to serve on the board of
directors of KFx and, upon election to the board, appoint these two persons to
serve on the board's executive committee. This agreement will remain in force
until the investors, as a group, hold less than 400,000 shares of KFx's common
stock.
2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Number Description
------ -----------
10.1 Common Stock and Warrant Purchase Agreement between KFx Inc. and
the Investors dated March 28, 2002.
99.1 Press Release, dated April 2, 2002 (regarding the final payment
to Pavilion from the proceeds of a private equity placement in
KFx).
3
SIGNATURE
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 thereunto duly authorized.
Date: March 28, 2002 KFx Inc.
(Registrant)
By:
/s/ Patrick S. Flaherty
----------------------------------------
Patrick S. Flaherty
Vice President-Finance and Chief Financial Officer
4
EXHIBIT INDEX
Number Description
------ -----------
10.1 Common Stock and Warrant Purchase Agreement between KFx Inc. and
the Investors dated March 28, 2002.
99.1 Press Release, dated April 2, 2002 (regarding the final payment
to Pavilion from the proceeds of a private equity placement in
KFx).
5