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): February 6, 2006
ZOLTEK COMPANIES, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 0-20600 43-1311101
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
3101 MCKELVEY ROAD
ST. LOUIS, MISSOURI 63044
(Address of principal executive offices) (Zip Code)
(314) 291-5110
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Registrant under any of
the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 7, 2006, Zoltek Companies, Inc. (the
"Registrant") announced that it had completed the private placement of $10
million aggregate principal amount of 7.5% Senior Convertible Notes (the
"Notes") pursuant to the terms of its previously announced Loan and Warrant
Agreement, dated as of September 29, 2005 (the "Loan Agreement"), among the
Registrant, the lender parties thereto ("Lenders"). As previously reported
by the Registrant in its Current Report dated September 29, 2005, the Loan
Agreement provides for the Registrant to issue up to $50 million principal
amount of senior convertible notes, along with warrants to purchase its
Common Stock. In connection with the recently completed transaction, the
Registrant and the lender parties executed a Waiver and Consent dated as of
February 3, 2006 (the "Waiver and Consent"), pursuant to which the lender
parties waived conditions set forth in the Loan Agreement with respect to
the funding of the $10 million tranche. To date, the Registrant has issued
an aggregate of $30 million of Notes under the Loan Agreement. The closing
of previous fundings under the Loan Agreement were completed on September
30, 2005 and November 30, 2005. Copies of the Loan Agreement and Waiver and
Consent are incorporated by reference or included as Exhibit 4.1 and Exhibit
4.5, respectively, to this report.
Amounts payable under the Notes, the form of which is
incorporated by reference in this report as Exhibit 4.2, are convertible
into shares of Common Stock. The intial conversion price is $13.07 per share
(subject to adjustment). The Notes bear interest at the rate of 7.5% per
annum, payable quarterly, and are due and payable upon the expiration of
their 42-month term. The interest on the Notes may be paid in cash or, at
the Registrant's option, in Common Stock if certain conditions are satisfied
as set forth in the Notes. If the Registrant chooses to pay the interest in
Common Stock, the price will be based on 90% of the average of the daily
volume weighted average price for the 20 days prior to the interest payment
date. The Notes are secured by a pledge of certain real property and fixed
assets associated with the operations of Zoltek Rt., the Registrant's
Hungarian subsidiary.
Pursuant to the Loan Agreement, in connection with the
recent $10 million funding, the Registrant issued to the Lenders warrants to
purchase 267,789 additional shares of Common Stock, representing 35% of the
number of shares into which the Notes initially are convertible (the
"Warrants"). The Warrants, the form of which are incorporated by reference
in this report as Exhibit 4.3, have five-year terms. The exercise price of
the Warrants is $15.16 per share (subject to adjustment).
The conversion prices of the Notes and the exercise prices
of the Warrants are both subject to adjustment under certain circumstances,
as set forth in the Notes and the Warrants. The number of shares of Common
Stock issuable under the Notes and the Warrants may be adjusted based upon
the occurrences of certain events described therein such as the declaration
by the Registrant of a stock dividend, a subdivision or combination of its
outstanding shares of Common Stock, a reclassification of the outstanding
securities of the Registrant (including due to reorganization of the
Registrant itself) or the issuance of common equity securities at a price
less than the applicable conversion or exercise price.
All of the Lenders are "accredited investors," as defined
in Rule 501 of Regulation D under the Securities Act of 1933, as amended
(the "Securities Act"), and the securities offered and sold in the private
placement have not been registered under the Securities Act and were sold
without registration in reliance upon the exemption from securities
registration under both Rule 506 of Regulation D and Section 4(2) of the
Securities Act. The Registrant has entered into a Registration Rights
Agreement with the Lenders, a copy of which is incorporated by reference in
this report as Exhibit 4.4 ("Registration Rights Agreement"), pursuant to
which the Lenders shall have the right to demand registration of the Common
Stock and to participate in certain subsequent offerings of securities by
the Registrant or other shareholders.
The foregoing summary of is qualified in its entirety by
the Loan Agreement, Waiver and Consent, Notes, Warrants, and the
Registration Rights Agreement, and should be read in conjunction with, the
copies of such documents incorporated by reference in this report as
exhibits.
On February 7, 2006, the Registrant issued a press release
announcing that it had completed the funding of Notes under the Loan
Agreement in the amount of $10.0 million. The text of this press release is
attached hereto as Exhibit 99.1.
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ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION
UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
See Item 1.01 which is incorporated herein by reference.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
See Item 1.01 which is incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
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Not applicable.
(b) Pro forma financial information. Not applicable
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(c) Exhibits. See Exhibit Index.
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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 thereunto duly authorized.
Dated: February 8, 2006
ZOLTEK COMPANIES, INC.
By /s/ Kevin Schott
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Kevin Schott
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
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4.1 Loan and Warrant Agreement, as of September 29, 2005,
among the Registrant, the Lenders and the Agent, filed as
Exhibit 4.1 to the Registrant's Current Report on Form 8-K
dated September 29, 2005 and incorporated herein by
reference.
4.2 Form of Note, filed as Exhibit 4.2 to the Registrant's
Current Report on Form 8-K dated September 29, 2005 and
incorporated herein by reference.
4.3 Form of Warrant, filed as Exhibit 4.3 to the Registrant's
Current Report on Form 8-K dated September 29, 2005 and
incorporated herein by reference.
4.4 Registration Rights Agreement, dated as of September 30,
2005, by and among the Registrant and the Lenders parties
thereto, filed as Exhibit 4.4 to the Registrant's Current
Report on Form 8-K dated September 29, 2005 and
incorporated herein by reference.
4.5 Waiver and Consent, dated as of February 3, 2006, by and
among the Registrant and the Lender parties thereto.
99.1 Press Release, dated February 7, 2006.
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