Dixie Lee International Industries, Inc. - Current report filing (8-K)

 

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

Date of Report (Date of earliest event reported)   April 8, 2008

Dixie Lee International Industries, Inc.

(Exact name of registrant as specified in its charter)

Nevada	333- 91484	98-0363723
(State or other jurisdiction of incorporation)	(Commission File Number)	IRS Employer Identification No.)

7 Snow Road, Napanee, Ontario, Canada K7R 0A2

(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code     [phone]

(Former name or former address, if changed since last report.)

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 (see General Instruction A.2. below):

[  ] 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.

A.  Area Franchise Agreement for the United Kingdom.

On April 8, 2008 the Company entered into a Letter of Intent with Messrs. Khalid Yussuf and Mohammed Munir to enter into an Area Franchise Agreement for the United Kingdom.  The UK Area Franchise Agreement is under the existing Area Franchise Agreement between the Company and Mr. Ahmad Nosratabadi who will be opening his first franchised store in Dubai within 30 days.

Under the terms of the Letter of Intent, which will be incorporated into the UK Area Franchise Agreement, Messrs Yussuf and Munir will form a new corporation to be owned 50% by them and 50% by Mr. Nosratabadi,  which corporation will be the UK Area Franchisee.  The UK Area Franchisee will open 70 stores within the first twelve (12) months after incorporation.   It is anticipated that in order to meet that commitment the approximately 70 existing stores currently owned by Messrs. Yussuf and Munir will be converted to the Dixie Lee brand.  It is also anticipated that the formal UK Area Agreement will be entered into within the next 30 days.

B. Reformation of Agreement of June 15, 2007.

As previously reported on Form 8-K filed July 6, 2007, on June 15, 2007 the Company, previously named “Wood Products, Inc.” entered into a certain agreement 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 being 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, 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 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.

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.  Dixie Lee Food Systems, Ltd. is the franchisor of approximately (as of April 14, 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.  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.

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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.

C.  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 time the voting for directors is 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.

Item 1.02

Termination of a Material Definitive Agreement.

As a part of the organizational restructuring and the acquisition of Dixie Lee Capital Corporation, the agreement dated May 6, 2007 between Dixie Lee Food Systems, Ltd. and Dixie Lee Capital Corporation, pursuant to which the revenues of Dixie Lee Food Systems, Ltd. and approximately 80% of the liabilities of Dixie Lee Food Systems, Ltd. were transferred to/assumed by Dixie Lee Capital Corporation has been terminated.

Item 3.02

Unregistered Sales of Equity Securities.

 

Preferred Stock

 

On April 8, 2008 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.

 

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Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

 

In response to requests from potential investors currently negotiating with the Company for seats on the Board of Directors, the Board of Directors has amended Article III, Section 2 of the Bylaws to establish a flexible number of directors.  The Section, as amended, reads:

 

“SECTION 2.  NUMBER

 

The business and property of the corporation shall be managed by a Board of not fewer than three (3) nor more than twenty-one (21) directors, who shall be natural persons of full age, and who shall be elected annually by the stockholders having voting rights, for the term of one year, and shall serve until the election and acceptance of their duly qualified successors.  In the event of any delay in holding, or adjournment of, or failure to hold an annual meeting, the terms of the sitting directors shall be automatically continued indefinitely until their successors shall be duly elected and qualified.  Directors need not be stockholders.  Any vacancies, including vacancies resulting from an increase in the number of directors, may be filled by the Board of Directors, though less than a quorum for the unexpired term. The Board of Directors shall have full power, and it is hereby expressly authorized, to increase or decrease the number of directors from time to time without requiring a vote of the stockholders.”

 

Item 8.01

Other Events.

Mark Graham, the Company’s Operations Manager for Canada, resigned, effective April 4, 2008.  Mr. Graham is also a director of the Company, and remains as such. His resignation as Operations Manager was not occasioned by any disagreement with the Company’s operations, policies or practices; he is pursuing a personal opportunity.

SIGNATURE

 

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.

DIXIE LEE INTERNATIONAL

INDUSTRIES, INC.

By: /s/ Joseph Murano , President

April 14, 2008