SCHEDULE 13D
(Rule 13d-101)
Information to be Included in Statements Filed Pursuant
to Rule 13d-1(A) and
Amendments Thereto Filed Pursuant to Rule 13d-2(A)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Under the Securities Exchange Act of 1934
(Amendment No. 6)*
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KFx Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
48245L107
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(CUSIP Number)
Mark D. Whatley, Esq.
Howard Rice Nemerovski Canady Falk & Rabkin,
A Professional Corporation
Three Embarcadero Center, Suite 700
San Francisco, CA 94111
(415) 434-1600
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 25, 2005
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(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box [ ].
Note: Schedules filed in paper format shall include a signed original and
five copies of this schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
CUSIP No. 48245L107 SCHEDULE 13D Page 2 of 11
1 Name of Reporting Person WESTCLIFF CAPITAL MANAGEMENT LLC
IRS Identification No. of Above Person 77-0435868
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds OO
5 Check Box if Disclosure of Legal Proceedings is [ ]
Required Pursuant to Items 2(d) or 2(e)
6 Citizenship or Place of Organization California
7 Sole Voting Power 10,659,650
NUMBER OF
SHARES 8 Shared Voting Power
BENEFICIALLY
OWNED BY EACH 9 Sole Dispositive Power 10,659,650
REPORTING
PERSON WITH 10 Shared Dispositive Power
11 Aggregate Amount Beneficially Owned by 10,659,650
Reporting Person
12 Check Box if the Aggregate Amount in Row 11 [ ]
Excludes Certain Shares
13 Percent of Class Represented by Amount in Row 11 14.6%
14 Type of Reporting Person IA, OO
CUSIP No. 48245L107 SCHEDULE 13D Page 3 of 11
1 Names of Reporting Persons RICHARD S. SPENCER III
IRS Identification Nos. of Above Persons
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds OO
5 Check Box if Disclosure of Legal Proceedings is [ ]
Required Pursuant to Items 2(d) or 2(e)
6 Citizenship or Place of Organization United States
7 Sole Voting Power 10,719,650
NUMBER OF
SHARES 8 Shared Voting Power
BENEFICIALLY
OWNED BY EACH 9 Sole Dispositive Power 10,719,650
REPORTING
PERSON WITH 10 Shared Dispositive Power
11 Aggregate Amount Beneficially Owned by 10,719,650
Reporting Person
12 Check Box if the Aggregate Amount in Row 11 [ ]
Excludes Certain Shares
13 Percent of Class Represented by Amount in Row 11 14.7%
14 Type of Reporting Person IN
CUSIP No. 48245L107 SCHEDULE 13D Page 4 of 11
1 Name of Reporting Person WESTCLIFF PUBLIC VENTURES - KFx, L.P.
IRS Identification No. of Above Person
2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [x]
3 SEC USE ONLY
4 Source of Funds OO
5 Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization California
7 Sole Voting Power 3,640,100
NUMBER OF
SHARES 8 Shared Voting Power
BENEFICIALLY
OWNED BY EACH 9 Sole Dispositive Power 3,640,100
REPORTING
PERSON WITH 10 Shared Dispositive Power
11 Aggregate Amount Beneficially Owned by 3,640,100
Reporting Person
12 Check Box if the Aggregate Amount in Row 11 [ ]
Excludes Certain Shares
13 Percent of Class Represented by Amount in Row 11 5%
14 Type of Reporting Person PN
CUSIP No. 48245L107 SCHEDULE 13D Page 5 of 11
Item 1. Security and Issuer
This Schedule 13D ("Schedule") relates to shares of common stock of
KFx Inc. (the "Issuer"). The principal executive office of the Issuer is
55 Madison Street, Suite 745, Denver, CO 80206.
Item 2. Identity and Background
This Schedule is filed on behalf of Westcliff Capital Management, LLC
("Westcliff"), Richard S. Spencer III ("Spencer") and Westcliff Public
Ventures Fund - KFx, L.P. ("Public Ventures- KFx"). Westcliff is an
investment adviser registered with the Securities and Exchange Commission and
acts as investment adviser to various investment advisory clients and several
investment limited partnerships (including Public Ventures - KFx) of which
Westcliff is the General Partner. Spencer is the Managing Member and
controlling owner of Westcliff. Westcliff, Spencer and Public Ventures - KFx
are together referred to as the "reporting persons." The principal business
office address of the reporting persons is 200 Seventh Avenue, Suite 105,
Santa Cruz, California 95062. The reporting persons are filing jointly but
not as members of a group and each expressly disclaims membership in a group.
During the last five years, no reporting person has been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors).
During the last five years, no reporting person was a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which that reporting person was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or State securities
laws or finding any violation with respect to such laws.
The citizenship of each reporting person is listed on that reporting
person's cover page.
Item 3. Source and Amount of Funds or Other Consideration
The securities identified on Page 2 of this Schedule were all
purchased by and are held in accounts for various investment advisory clients
of which Westcliff is the investment manager (including certain investment
limited partnerships, such as Public Ventures - KFx, of which Westcliff is a
general partner). Funds present in those accounts (in effect, Working
Capital) were used for those purchases. To the extent Westcliff causes its
advisory clients to purchase additional Common Stock, it expects those
purchases to be made with available funds in those clients' accounts.
Item 4. Purpose of Transaction.
As described above, the Common Stock is held in the accounts of
various investment advisory clients of Wesctliff. It was purchased in those
accounts for investment purposes.
The reporting persons do not currently have any plans or proposals
that relate to or would result in any of the following:
(a) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
CUSIP No. 48245L107 SCHEDULE 13D Page 6 of 11
(b) An extraordinary corporate transaction, such as a merger,
reorganization, or liquidation, involving the Issuer or any
of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(d) Any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies
on the board;
(e) Any material change in the present capitalization or dividend
policy of the Issuer;
(f) Any other material change in the Issuer's business or
corporate structure;
(g) Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation
system of a registered national securities association;
(i) A class of equity securities of the issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Act; or
(j) Any action similar to those enumerated above.
Item 5. Interest in Securities of the Issuer
5(a) and 5(b): The beneficial ownership of the Issuer's common stock
by each reporting person at the date hereof is reflected on that reporting
person's cover page. Westcliff's and Spencer's beneficial ownership includes
warrants to purchase 7,288,750 shares of common stock, which includes
warrants held by Public Ventures - KFx to purchase 2,743,335 shares of common
stock. Spencer's beneficial ownership also includes options to purchase
60,000 shares of common stock.
Westcliff has sole voting and investment power over the holdings of
each of advisory client in whose account common stock is held (including
investment partnerships of which it is a general partner). Spencer controls
Westcliff. As a result, Westcliff and Spencer may be deemed to have
beneficial ownership of all of that Common Stock, representing approximately
14.6% and 14.7% respectively of the outstanding common stock of the Issuer.
Each of the reporting persons disclaims membership in a "group"
within the meaning of Section 13(d)(4) of the Securities Exchange Act of 1934
(the "Exchange Act") or rule 13d-5(b)(1) of the Exchange Act and Westcliff
and Spencer each further disclaims on behalf of each investment advisory
client (including investment partnerships) for whose account Westcliff
CUSIP No. 48245L107 SCHEDULE 13D Page 7 of 11
exercises discretion, beneficial ownership of any shares of the Issuer's
common stock owned by any other person. No investment advisory client for
which Westcliff exercises investment discretion has any right to vote, direct
the vote, or control the disposition of any shares owned by any other such
investment advisory client.
5(c): The reporting persons have caused the following transactions
in the Issuer's common stock to be effected in its clients' accounts during
the last 60 days. All transactions were in the open market:
Type of Date Number of Price per share
Transaction Shares
--------------------------------------------------------------
Purchase 05/25/05 333,100 $12.40
05/26/05 87,300 $12.84
5(d): Westcliff has been granted the authority to dispose of and
vote the securities reflected in Items 7-11 of page 2 of this Schedule 13d
in its capacity as investment adviser of its various investment advisory
clients that own Common Stock (including investment limited partnerships of
which it is a general partner). Those advisory clients, or persons or
entities that own them, have the right to receive, or the power to direct
the receipt of, dividends from, or the proceeds from the sale of, the
securities held in their respective accounts.
5(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
Westcliff is the general partner of investment limited partnerships
pursuant to an agreement of limited partnership with respect to each such
partnership. Each of those agreements provides to Westcliff the authority,
among other things, to invest the funds of those partnerships in the Stock,
to vote and dispose of the Stock and to file this statement on their behalf.
Pursuant to each such agreement, Westcliff is entitled to allocations based
on assets under management and realized and unrealized gains.
On May 5, 2005, certain of Westcliff's advisory clients (including
certain limited partnerships) and other parties (collectively the
"Investors") entered into an agreement with the Issuer to amend and restate
certain provisions (the "Project Provisions") of the Fourth Amended and
Restated Investors' Rights Agreement (the "Investors Rights Agreement").
The Project Provisions were revised and restated (and are now set forth in
the "K-Fuel Projects Participation and Development Agreement" rather than as
part of the Investors Rights Agreement), to among other things, increase the
Issuer's flexibility to build and operate K-Fuel plants, in addition to
licensing its technology to third parties. The amendment to the Investors
Rights Agreement also eliminates the Issuer's obligation to obtain the
Investors' consent before issuing preferred stock or certain other
securities.
CUSIP No. 48245L107 SCHEDULE 13D Page 8 of 11
Item 7. Material Filed as Exhibits
Exhibit A: Letter Agreement dated March 28, 2002, previously filed.
Exhibit B: Common Stock and Warrant Purchase Agreement, previously filed.
Exhibit C: Addendum to the Common Stock and Warrant Purchase Agreement,
previously filed.
Exhibit D: Second Addendum to the Common Stock and Warrant Purchase
Agreement, previously filed.
Exhibit E: Form of Warrant to Purchase Common Stock dated March 28, 2002,
previously filed.
Exhibit F: Form of Warrant to Purchase Common Stock dated April 30, 2002,
previously filed.
Exhibit G: Form of Warrant to Purchase Common Stock dated July 1, 2002,
previously filed.
Exhibit H: Third Amended and Restated Investors' Rights Agreement, previously
filed.
Exhibit I: Third Amended and Restated Put Agreement, previously filed.
Exhibit J: Third Addendum to the Common Stock and Warrant Purchase Agreement,
previously filed.
Exhibit K: Form of Warrant to Purchase Common Stock dated July 19, 2002,
previously filed.
Exhibit L: Fourth Addendum to the Common Stock and Warrant Purchase
Agreement, previously filed.
Exhibit M: Fourth Amended and Restated Investors' Rights Agreement,
previously filed.
Exhibit N: Fourth Amended and Restated Put Agreement, previously filed.
Exhibit O: Form of Warrant to Purchase Common Stock dated August 21, 2002,
previously filed.
Exhibit P: Agreement Regarding Joint Filing of Statement on Schedule 13D or
13G, dated May 27, 2005.
Exhibit Q: Waiver of Penalty Warrants dated September 26, 2002 previously
filed.
Exhibit R: First Amendment to Fourth Amended and Restated Investor's Rights
Agreement, filed as Exhibit 10.64 to the Issuer's Form 10-Q filed
with the Securities and Exchange Commission on May 10, 2005.
CUSIP No. 48245L107 SCHEDULE 13D Page 9 of 11
Signatures
After reasonable inquiry and to the best of each of the undersigned's
respective knowledge and belief, each of the undersigned certifies that the
information set forth in this statement is true, complete and correct.
DATED: May 27, 2005
WESTCLIFF CAPITAL MANAGEMENT, LLC
/s/ Richard S. Spencer III
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By: Richard S. Spencer III
Its: Manager
RICHARD S. SPENCER III
/s/ Richard S. Spencer III
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WESTCLIFF PUBLIC VENTURES - KFx, L.P.
By: Westcliff Capital Management, LLC,
the General Partner
/s/ Richard S. Spencer III
---------------------------------
By: Richard S. Spencer III
Its: Manager
CUSIP No. 48245L107 SCHEDULE 13D Page 10 of 11
Exhibit Index
Exhibit P Agreement Regarding Joint Filing of Statement on
Schedule 13D or 13G
CUSIP No. 48245L107 SCHEDULE 13D Page 11 of 11
Exhibit P
AGREEMENT REGARDING JOINT FILING OF STATEMENT ON
SCHEDULE 13D OR 13G
The undersigned agree to file jointly with the Securities and
Exchange Commission (the "SEC") any and all statements on Schedule 13D or
Schedule 13G (and any amendments or supplements thereto) required under
section 13(d) of the Securities Exchange Act of 1934, as amended, in
connection with purchases by the undersigned of the common stock of KFx Inc.
For that purpose, the undersigned hereby constitute and appoint Westcliff
Capital Management, LLC, a California limited liability company, as their
true and lawful agent and attorney-in-fact, with full power and authority
for and on behalf of the undersigned to prepare or cause to be prepared,
sign, file with the SEC and furnish to any other person all certificates,
instruments, agreements and documents necessary to comply with section 13(d)
and section 16(a) of the Securities Exchange Act of 1934, as amended, in
connection with said purchases, and to do and perform every act necessary
and proper to be done incident to the exercise of the foregoing power, as
fully as the undersigned might or could do if personally present.
DATED: May 27, 2005
WESTCLIFF CAPITAL MANAGEMENT, LLC
/s/ Richard S. Spencer III
---------------------------------
By: Richard S. Spencer III
Its: Manager
RICHARD S. SPENCER III
/s/ Richard S. Spencer III
---------------------------------
WESTCLIFF PUBLIC VENTURES - KFx, L.P.
By: Westcliff Capital Management, LLC,
the General Partner
/s/ Richard S. Spencer III
---------------------------------
By: Richard S. Spencer III
Its: Manager