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): OCTOBER 8, 2007
SUMMIT GLOBAL LOGISTICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-51091 20-0781155
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
ONE MEADOWLANDS PLAZA, 11TH FLOOR
EAST RUTHERFORD, NEW JERSEY 07073
(Address of Principal Executive Offices) (Zip Code)
1 (201) 806-3700
(Registrant's telephone number, including area code)
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))
ITEM 2.04
We entered into registration rights agreements in connection with our senior
secured note and common stock financings on November 8, 2006. These agreements
were amended on May 21, 2007 in connection with a restructuring of such notes
("Agreements"). Pursuant to these Agreements, we were required to file our
amended registration statement by June 20, 2007 under the Securities Act of
1933, as amended (the "Act"), with respect to certain shares of our common
stock. This registration statement ("Registration Statement") was filed on a
timely basis in compliance with the Agreements. The Agreements also required us
to cause the Registration Statement to be effective under the Act by September
18, 2007. The Registration Statement is not yet effective under the Act.
Under the terms of the Agreements, we are required to pay liquidated damages in
the event that the Registration Statement was not declared effective under the
Act on or before September 18, 2007. Such payment is a percentage of the
aggregate amount invested: one percent (1%) per month ($1.2 million), prorated
on a daily basis for the first 30 days after September 18, 2007, and two percent
(2%) per month ($2.4 million), prorated on a daily basis for each thirty day
period thereafter, subject to a 10% aggregate limit ($11.8 million). Our failure
to cause the Registration Statement to be declared effective under the Act by
the prescribed date also constitutes an event of default under the credit
documents with the note holders and our senior secured lenders (by virtue of
cross default provisions).
As of October 12, 2007, we have incurred aggregate penalties of approximately
$950,000, and we are currently incurring a penalty in the aggregate of
approximately $39,000 a day as of September 18, 2007, increasing to
approximately $78,000 a day, beginning October 19, 2007. We will continue to
incur this penalty until such time as the Registration Statement is declared
effective, subject to the $11.8 million aggregate cap.
We are currently preparing to file an amendment to our Registration Statement in
response to the SEC comments, with a view to having declared effective as soon
as practicable, thereby mitigating the impact on our financial results.
Since we are in default under the terms of the agreements with our note holders
and senior lenders, it is possible that our indebtedness could be accelerated
and our assets foreclosed upon. However, we are currently in negotiation with
the senior secured convertible note holders concerning a revision of the
financial covenants contained in the operative agreements and issues related to
liquidated damages pertaining to the date of effectiveness of the Registration
Statement. We are also in negotiations with our senior secured lenders regarding
a revision of the financial covenants contained in our agreements with such
lenders. There can be no assurance as to the outcome of these negotiations.
Failure to achieve a waiver of these defaults, settlement of the liquidated
damages, or a reset of our financial covenants will have a material adverse
effect on our business, results of operations and financial condition.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Summit Global Logistics, Inc.
Date: October 12, 2007
/s/ Robert Agresti
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Robert Agresti, Chief Executive Officer