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): April 28, 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))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On April 28, 2006, Zoltek Companies, Inc. (the "Registrant")
announced that it had entered into an an Amendment No. 1 to Loan and Warrant
Agreement and Registration Rights Agreement, dated as of April 28, 2006 (the
"Amendment"), which amends various 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, the Loan Agreement provided for
the Registrant to issue up to $50 million principal amount of senior
convertible notes, along with warrants to purchase its Common Stock. The
Amendment, among other things, provides for an additional $10 million of
senior convertible notes to be issued in addition to the $50 million
originally provided for under the Loan Agreement. The Registrant has
previously funded an aggregate of $30 million of senior convertible notes
under the Loan Agreement. Copies of the Amendment and the Loan Agreement are
incorporated by reference or included as Exhibit 4.1 and Exhibit 4.2,
respectively, to this report.
Under the Amendment, the terms of the Loan Agreement have
been revised to provide that the remaining $30 million of funding under the
Loan Agreement will be made in two separate closings of $20 million and $10
million, respectively. The additional senior convertible notes to be issued
under the Loan Agreement, the form of which is included as Exhibit 4.3 to
this Report (the "Notes"), will be convertible into shares of the
Registrant's Common Stock at an intial conversion price of $25.51 per share
(subject to adjustment). The Notes will mature 42 months from the closing
date and will bear interest, payable quartely, at the rate of 7.5% per annum
for 18 months, and therafter at LIBOR plus four percent per annum. 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 Amendment, in connection with the
additional $30 million of Notes issued to the Lenders the Registrant will
issue to the Lenders warrants to purchase an aggregate of up to 411,521
shares of Common Stock at an initial exercise price of $28.06 per share, and
up to 111,113 shares of Common Stock at an initial exercise price of $.01
per share (collectively, the "Warrants"). The Warrants, the form of which
are incorporated by reference in this report as Exhibit 4.4 and Exhibit 4.5,
respectively, have five-year terms.
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 to be offered and sold in the
private placement have not been registered under the Securities Act and will
be 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.
In connection with the Amendment, the Lenders agreed to
convert the entire $20 million aggregate princiapal amount of senior
convertible notes previously issued by the Registrant to the Lenders in
February 2005 into approximately 1,000,000 shares of Common Stock, and to
exercise associated warrants held by the Lenders for approxomately 1,052,000
shars of Common Stock. The conversion of these notes and exercise of the
related warrants by the Lenders will eliminate future derivative accounting
treatement for these instruments which resulted in the Registrant recording
non-cash expense or income arising from fluctuations in the market price of
the Registrant's Common Stock
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and corresponding changes in the fair value of the convertible notes and
warrants. Consequently, beginning with the quarter ending June 30, 2006, the
Registrant will no longer report its convertible debt financings on a
derivative accounting basis.
The foregoing summary of is qualified in its entirety by
the Loan Agreement, the Amendment, Form of Note and 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 April 28, 2006, the Registrant issued a press release
announcing that it had entered into the Amendment. The text of this press
release is attached hereto as Exhibit 99.1.
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 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired. Not applicable.
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(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: May 1, 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 Amendment No. 1 to Loan and Warrant Agreement and Registration
Rights Agreement among the Registrant and the Lenders.
4.3 Form of Note
4.4 Form of Warrant
4.5 Form of Warrant
4.6 Registration Rights Agreement, dated as of September 30, 2005, by
and among the Registrant and the Lender 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.
99.1 Press Release, dated April 28, 2006.
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