UNITED STATES
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): May 2, 2008
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 May 2, 2008, Zoltek Companies, Inc. (the "Registrant") entered
into an agreement with Kevin J. Schott, the Company's former Chief Financial
Officer, setting forth the terms of Mr. Schott's resignation from the
Registrant. Under that agreement, Mr. Schott agreed to resign from the
Registrant as of the date of the agreement, Mr. Schott paid the Registrant
$250,000 and the Registrant agreed to pay him his salary and routine employee
benefits through that date. The Registrant released Mr. Schott from claims
arising out of certain payments by a subsidiary of the Registrant aggregating
$250,000 and Mr. Schott released the Registrant from claims arising out of his
employment. Mr. Schott also agreed to cooperate with the Registrant in
connection with matters relating to his employment. The agreement also
contains other customary provisions, including obligations regarding
non-disparagement. A copy of the agreement is filed as Exhibit 10 to this
Current Report on Form 8-K.
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The Registrant recently learned that two funds transfers from its
subsidiary of $175,000 and $75,000 in September 2007 and January 2008,
respectively, were not properly authorized or reported in the Registrant's
financial records. The Registrant has notified its independent registered
public accounting firm and the Audit Committee of its Board of Directors
initiated an investigation to determine whether any other unauthorized
activities have occurred.
On May 5, 2008, Zoltek Companies, Inc. (the "Registrant ") issued a
press release announcing that its previously issued financial statements for
the fiscal year ended September 30, 2007 and the quarter ended December 31,
2007 should not be relied upon because of errors in those financial statements
resulting from unrecorded and unauthorized payments by Registrant's subsidiary
aggregating approximately $250,000. For further information, please see Item
4.02(a).
ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A
RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.
(a) On May 4, 2008, Zoltek Companies, Inc. (the "Registrant"),
following a review by its Audit Committee, determined that the Registrant's
previously issued financial statements for the fiscal year ended September 30,
2007 and the fiscal quarter ended December 31, 2007 should no longer be relied
upon because of errors in those financial statements resulting from certain
payments by a subsidiary that were directed by the Chief Financial Officer of
the Registrant. The payments aggregated $250,000 and were not properly
authorized or reported in the Registrant's financial records.
The Registrant recently learned that two funds transfers from its
subsidiary of $175,000 and $75,000 in September 2007 and January 2008,
respectively, were not properly authorized or reported in the Registrant's
financial records. The Registrant has notified its independent registered
public accounting firm and the Audit Committee of its Board of Directors
initiated an investigation to determine whether any other unauthorized
activities have occurred. The Registrant is working diligently to complete
this investigation in the near term. The Audit Committee and management are in
the process of reviewing the circumstances underlying the unauthorized
transactions, including whether the failure to discover them earlier was the
result of a material weakness in the Registrant's internal controls and to
address any remediation in the Registrant's internal controls they deem
appropriate.
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The Registrant is assessing the appropriate accounting but at this
time believes that the unauthorized payment in September 2007 should have been
recorded as an expense item of $175,000 in the fourth quarter of fiscal 2007.
Accordingly, if the accounting is ultimately deemed appropriate, previously
reported other current assets of $10.9 million on the Company's consolidated
balance sheet as of September 30, 2007 were overstated by $175,000, and
previously reported accumulated other comprehensive income of $10.3 million on
the Company's consolidated balance sheet as of December 31, 2007, was
overstated by $175,000. In addition, the Company's previously reported net
losses of $2.5 million and $1.8 million for the fiscal year and fourth quarter
ended September 30, 2007 were understated by $175,000. As noted above, the
Registrant is assessing the appropriate adjustments that may or may not be
required related to these payments, however, a final determination of the
magnitude or materiality of the collective errors and related adjustments that
may be required will not be finalized until the investigation is completed.
The determination that the Registrant's previously issued financial
statements for the fiscal year ended September 30, 2007 and the fiscal quarter
ended December 31, 2007 should no longer be relied upon statements was
authorized by the Audit Committee of the Board of Directors of the Registrant.
The Audit Committee of the Registrant discussed the matters disclosed in this
filing with Grant Thornton LLP, Company's independent registered public
accounting firm.
This Current Report on Form 8-K contains forward-looking statements
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements speak only as of the date of
this Current Report, and the Registrant assumes no obligation to update such
forward-looking statements. Investors are cautioned that such forward-looking
statements are subject to many risks and uncertainties, and may differ
materially or adversely from the Company's actual results or future events.
The anticipated effects of the events described above are preliminary and may
be subject to change as the Registrant completes its analysis.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.
On May 2, 2008, Kevin J. Schott resigned as Chief Financial Officer
of Zoltek Companies, Inc. (the "Registrant"). Zsolt Rumy, Chairman and Chief
Executive Officer of the Registrant, is serving as Chief Financial Officer on
an interim basis. The Registrant is conducting a search for a permanent Chief
Financial Officer with a view toward appointment of a qualified financial
professional either by promotion from within the Registrant or by recruiting
an individual not presently employed by the Registrant at the earliest
practicable time.
Information regarding a separation agreement entered into between Mr.
Schott and the Registrant is set forth under Item 1.01 and incorporated herein
by reference.
ITEM 8.01 OTHER EVENTS.
The information set forth under Item 4.02 and Item 5.02 is
incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND 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 5, 2008
ZOLTEK COMPANIES, INC.
By /s/ Zsolt Rumy
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Zsolt Rumy
Chief Executive Officer
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EXHIBIT INDEX
Exhibit
Number Description
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10 Separation Agreement, dated May 2, 2008, by and between the
Registrant and Kevin Schott.
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