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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
August 13, 2001
Date of Report
(Date of earliest event reported)
PET QUARTERS, INC.
(Exact name of registrant as specified in its charter)
ARKANSAS 0-28469 62-1698524
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
720 EAST FRONT STREET
LONOKE, ARKANSAS 72806
(Address, including Zip Code, of principal executive offices)
(501) 676-9222
(Registrant's telephone number, including area code)
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Item 1. Changes in Control of Registrant.
Not Applicable.
Item 2. Acquisition or Disposition of Assets.
Not Applicable
Item 3. Bankruptcy or Receivership.
Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant.
Not Applicable.
Item 5. Other Events.
As of August 17, 2001, Pet Quarters, Inc. (the "Company") closed two
loans with separate lenders for an aggregate amount of $1.45 million. The first
loan, from Z Capital, Inc., was in an original principal amount of $1,000,000
and bears interest at a rate of 8.25%, and was closed on August 13, 2001. Pet
Quarters is obligated to pay $50,000 per week commencing September 11, 2001
until the loan is paid in full. At the request of the lender, which is an
accredited investor, Pet Quarters agreed that it would issue 3,000,000 shares of
Pet Quarters, Inc. Common Stock to Z Capital, in lieu of payment of a cash loan
origination fee, for making the loan. The Company is obligated to issue the
shares only if the Company's shareholders vote to increase the number of
authorized shares available for issuance and only after such authorized shares
have been registered with the Securities and Exchange Commission. The Company
anticipates such a vote being held at its annual meeting of shareholders to be
held in late 2001. In the event that the shareholders do not increase the number
of shares of Common Stock authorized for issuance, Pet Quarters is required to
pay Z Capital a cash origination fee. The fee may be decreased if the loan is
paid prior to January 29, 2002. The loan is secured by a lien on the stock of PQ
Acquisition Company, Inc., a wholly-owned subsidiary of Pet Quarters which owns
substantially all of the operating assets of Pet Quarters.
In a separate transaction which closed on August 17, 2001, Pet Quarters
borrowed $450,000 in a single loan from an individual. The loan, which bears
interest at 8.25%, is secured by a lien on the stock of PQ Acquisition Company,
Inc. The entire principal and all accrued interest are due in full on February
17, 2002.
The proceeds of these loans will be used for inventory and general
corporate purposes including the payment of debt and payables. The Company is
continuing to search for additional capital, which may include additional loans
or the sale of equity securities.
Item 6. Resignations of Registrant's Directors.
Not Applicable.
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Item 7. Financial Statements and Exhibits.
(a) Exhibits. The following exhibits are filed with this Form 8-K:
5.1 Loan Agreement, dated August 13, 2001, by and between Pet
Quarters, Inc. and Z Capital, Inc.
5.2 Promissory Note and Security Agreement
5.3 Press Release dated September 7, 2001 issued by Pet Quarters,
Inc.
Item 8. Change in Fiscal Year.
Not Applicable.
Item 9. Regulation FD Disclosure.
Not Applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to its report on Form 8-K to be
signed on its behalf by the undersigned hereto duly authorized.
PET QUARTERS, INC.
By: /s/ Steven Dempsey
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Steven Dempsey
Chief Executive Officer
DATE: September 10, 2001
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INDEX TO EXHIBITS
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
5.1 Loan Agreement, dated August 13, 2001, by and between Pet Quarters,
Inc. and Z Capital, Inc.
5.2 Promissory Note and Security Agreement
5.3 Press Release dated September 7, 2001 issued by Pet Quarters, Inc.
</Table>