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
June 5, 2000
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Date of Report (Date of earliest event reported)
COVOL TECHNOLOGIES, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 0-27808 87-0547337
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
3280 N. Frontage Road
Lehi, UT 84043
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(Address of principal executive offices)
(Zip Code)
(801) 768-4481
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report.)
Item 5. Other Events - Covol Technologies, Inc. Retires OZ Master Fund, Ltd.
Debt Early
Covol announced on June 5, 2000 the early retirement of the OZ Convertible
Secured Note. The complete text of the announcement follows.
Covol Technologies, Inc. today announced it has successfully completed the early
retirement of the OZ Capital Master Fund, Ltd. (Och-Ziff) debt. The $20 million
convertible secured note issued to Och-Ziff provided for the payment in full of
the remaining principal balance on the note, due September 17, 2001. Due to
increasing royalty payments, the receipt of contingent payments on previously
sold facilities, and the incurrence of the Zions debt, described below, Covol
was able to completely retire the debt almost eighteen months early. The
Company's non-operating debt has been reduced from $43 million one year ago, to
$7 million today.
Based upon standard commercial lending terms, Covol established a secured,
short-term commercial loan with Zions First National Bank. A portion of the
proceeds for the Och-Ziff repayment was provided by the Zions loan. The current
weighted average cost of Covol's debt, including the Zions' loan, is 10.28%.
This represents a significant reduction in Covol's borrowing costs. Covol is
reviewing the possibility of improving its borrowing costs further and
establishing a long-term banking relationship with Zions or an alternative
commercial bank.
Steven G. Stewart, Chief Financial Officer, commented, "Earlier we indicated to
our shareholders that one of Covol's priorities was the early retirement of the
Och-Ziff debt. That goal has now been accomplished. The Company is now able to
invest a portion of its excess cash flow in repurchasing the Company's stock and
to pursue additional business opportunities. We are currently evaluating several
alternative investments that will allow the Company to diversify and expand its
business."
Statements in this news release that relate to future plans, possible
transactions, or projected valuations are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, including any statement
with respect to anticipated products to be produced using Covol's technology and
Covol's strategy. Such statements are subject to risks and uncertainties that
could cause actual results to differ materially. Although Covol believes that
its expectations are based on reasonable assumptions, there are a number of
business factors which singularly or combined may affect the Company's future
operating results. In addition to matters affecting Covol's industry or the coal
industry or the economy generally, factors which could cause actual results to
differ from expectations set forth in the above identified forward-looking
statements include but are not limited to: the ability to successfully negotiate
terms and consummate proposed transactions, ability to sell Company-owned
synthetic fuel facilities on favorable terms, including the ability to negotiate
settlements of contract terminations caused by facility relocations, ability to
obtain necessary capital or financing, ability to comply with covenants in
financing agreements, including financial performance criteria, ability to
conserve capital through cost reductions until operating revenues exceed
expenses, ability of licensees to market synthetic fuel produced, generating
royalties for Covol, ability of licensees to achieve expected production levels
at the synthetic fuel facilities, favorable IRS tax treatment, availability of
natural resources and suitable raw materials, ability to locate appropriate
sites for facilities, ability of Covol to complete specific research and
development projects, and the commercial viability of Covol's technologies.
Item 7. Financial Statements and Exhibits
(c) The following exhibits are included herein:
10.68 Promissory Note payable to Zions First National Bank, dated
May 31, 2000
10.68.1 Loan Agreement between Covol and Zions First National Bank
dated May 31, 2000
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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.
COVOL TECHNOLOGIES, INC.
Registrant
Date: June 5, 2000 /s/ Kirk A. Benson
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Kirk A. Benson
Chief Executive Officer and
Principal Executive Officer
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