|
Item
1.01
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Entry
Into a Material Definitive
Agreement.
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Reformation of Agreement of
June 15, 2007.
In Form
8-K filed April 14, 2008, the Company reported that the original acquisition
agreement of June 15, 2007 was to be reformed, with the terms effective as of
June 15, 2007, so as to correct various matters. Under the original
agreement,.as previously reported on Form 8-K filed July 6, 2007, the Company,
previously named “Wood Products, Inc.”, entered into a certain agreement on June
15, 2007 with Joseph Murano, the sole shareholder of Dixie Lee Food Systems
(U.S.A.) Inc., whereby the Company acquired all of the issued and outstanding
shares of Dixie Lee Food Systems (U.S.A.) Inc., which thereupon became a
wholly-owned subsidiary of the Company. That original agreement of
June 15, is now reformed
ab
initio
, so that the corrections are effective retroactively to the
original date. The purposes of the reformation are:
(1) to
include some omitted entities and to acquire Dixie Lee Capital Corporation, so
as to complete the corporation organization structure to include the
international and Canadian operations, as well as the U.S. operations;
and
(2) to
remove the inadvertent reference to a 2% royalty payment.
As of
June 15, 2007 and as of May 30, 2008 Mr. Joseph Murano was the sole owner and
shareholder of,
inter
alia
, three (3) entities:
(1) Dixie
Lee Food Systems (U.S.A.), Inc.;
(2)
1652437 Ontario Ltd. which was the owner of Dixie Lee Food Systems, Ltd.;
and
(3) Dixie
Lee Capital Corporation.
The
different business purposes of these entities are:
(1) Dixie
Lee Food Systems (U.S.A.), Inc. is the owner of the trademark for “Dixie Lee” in
the United States and was established to pursue franchising in the United
States, primarily in the format of diners.
(2) Dixie
Lee Food Systems, Ltd. is the franchisor of approximately (as of May 30, 2008)
31 Dixie Lee franchises in Canada and is a 50% owner of 1462103 Ontario Ltd.
which is the owner of the trademark for “Dixie Lee” in Canada.
(3) Dixie
Lee Capital Corporation was established to franchise and operate company-owned
“Dixie Lee” stores internationally.
The
original agreement, as drafted, covered only Dixie Lee Food Systems (U.S.A.),
Inc., thereby excluding the Canadian and international
operations. Certain documents executed prior to the agreement of June
15, 2007 indicate the Canadian operations were to have been included in the
transaction. In addition, certain infrastructure financing provisions
required that the international operations be included. Accordingly,
a major purpose of the reformation is to include those corporations and their
operations. The acquisition of Dixie Lee Capital Corporation requires
an increase in the shares being issued for the acquisitions. See
below.
During
the negotiations, there were no discussions of any royalty payments to the
shareholder (Mr. Murano); it was Mr. Murano’s intent and understanding that the
transaction for the acquisition of Dixie Lee Food Systems (U.S.A.), Inc. was
solely for the 26,500,000 shares of Common Stock of Dixie Lee International
Industries, Inc. At some point, for some reason unknown to Mr.
Murano, the royalty provision was added. The second purpose of this
reformation, therefore, is to remove that inadvertent
provision. During the period from June 15, 2007 to the date of
execution of this reformation, no payments have been made or accrued; the
provision was being ignored.
Acquisition of Dixie Lee
Capital Corporation.
As noted
above, Mr. Murano also owned a corporation named “Dixie Lee Capital Corporation”
which had been organized for the establishment of international
franchises. Although Mr. Murano had not originally agreed to have
that corporation acquired, with the re-analysis which led to the reformation of
the transaction, it became clear that the corporation and the international
business operations had to be made a part of the Company. After
further negotiations, agreement was reached to acquire Dixie Lee Capital
Corporation in a stock-for-stock exchange (“B” Reorganization) for 3,250,000
shares of an “Acquisition Series of Convertible Preferred Stock”, currently
being designated. The shares in the Series: (i) convert into ten (10)
shares of Common Stock and are convertible at the option of the holder; (ii)
vote with the Common Stock as a single class except in the election of directors
and have ten(10) votes per share; (iii) in the election of directors, elect a
majority of the Board of Directors until June 30, 2013, at which date the voting
for directors will be treated like other matters submitted to the shareholders
for approval; and (iv) shall receive such dividends as the Board of Directors
may declare from time to time.
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Item
3.02
|
Unregistered
Sales of Equity Securities.
|
Preferred
Stock
On April
8, 2008, in anticipation of the reformation, the Company issued (in
uncertificated form pending formal designation) 3,250,000 shares of its
Acquisition Series of Convertible Preferred Stock, which is in the process of
formal designation the Nevada Secretary of State, to Joseph Murano in exchange
for all of the issued and outstanding capital stock of Dixie Lee Capital
Corporation. The issuance of the shares was considered exempt pursuant to
Section 4(2) of the Securities Act of 1933 as amended. Since the
reformation is now effective, the series is being designated and the shares will
be issued in certificated form.
Item
9.01 Financial
Statements and Exhibits.
|
Exhibit
10.1
|
Reformed
Agreement
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