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: June 3, 2005
(Date of earliest event reported)
KAHIKI FOODS, INC.
(Exact Name of Registrant as specified in its charter)
Ohio 333-113925
(State of Other Jurisdiction (Commission file Number)
of Incorporation)
31-1056793
(IRS Employer Identification No.)
1100 Morrison Road, Gahanna, Ohio 43230
(Address of principal executive offices)
Registrant's Telephone Number, Including Area Code
(614) 322-3198
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 A2. 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 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On December 21, 2004, Kahiki Foods, Inc. ("Kahiki") entered into a
Convertible Note Purchase Agreement (the "Purchase Agreement") with Townsends,
Inc. ("Townsends"), pursuant to which Kahiki issued a $1,000,000 Convertible
Promissory Note due December 31, 2009 (the "Note") to Townsends. The Note bears
interest at the rate of 5% per annum, which accrues to maturity, and is
convertible into Preferred Stock, to be authorized, or Common Stock, at a
conversion price of $2.25 per share.
Pursuant to the Purchase Agreement, Townsends acquired a second
$1,000,000 Note under the same terms on June 3, 2005. Kahiki is also obligated
to seek shareholder approval of an amendment to Kahiki's Articles of
Incorporation to authorize Convertible Preferred Stock at the next annual
meeting of Kahiki's shareholders. It is anticipated that Townsends will convert
the Note(s) to Preferred Stock upon shareholder approval of the amendment. The
Preferred Stock will provide for cumulative annual dividends at an annual rate
of $.1125 per share, will be convertible into Common Stock on a share for share
basis (subject to anti-dilution rights), will have a liquidation preference of
1.5 times the invested amount, and will entitle Townsends to appoint up to 2
members of Kahiki's Board of Directors. The Purchase Agreement was attached as
Exhibit 10.1 to the Form 8-K filed by Kahiki with the Securities and Exchange
Commission on December 28, 2004, and a copy of the second Note is attached
hereto as Exhibit 10.7, each of which are incorporated herein by reference.
On June 3, 2005, Key Bank National Association funded the second
tranche under a Term Promissory Note (the "Term Note") in an amount equal to
$1,000,000 to Kahiki. The Term Note now totals $2,227,187.48 and matures on June
20, 2012. The Term Note is secured by a Commercial Security Agreement and an
Open-End Mortgage on Kahiki's Gahanna, Ohio manufacturing facility and
equipment. The Term Note was attached as Exhibit 10.6 to the Form 8-K filed by
Kahiki on December 28, 2004 and is incorporated herein by reference.
Kahiki intends to use the proceeds of these transactions for general
corporate purposes, including payment of costs associated with the opening of
Kahiki's new Gahanna, Ohio manufacturing facility.
ITEM 9.01. Financial Statements and Exhibits.
(c). Exhibits
Exhibit Index
10.1 Convertible Note Purchase Agreement between Kahiki Foods, Inc. and
Townsends, Inc. dated December 21, 2004 filed as Exhibit 10.1 to the
Report on Form 8-K of Kahiki Foods, Inc. filed on December 28, 2004, is
incorporated by reference.
10.6 Term Promissory Note to Key Bank National Association dated December
17, 2004 filed as Exhibit 10.6 to the Report on Form 8-K of Kahiki
Foods, Inc. filed on December 28, 2004, is incorporated by reference.
10.7 Convertible Promissory Note to Townsends, Inc. dated June 3, 2005.
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.
KAHIKI FOODS, INC.
By: /s/ Michael S. Tsao
--------------------------
Michael Tsao, Chairman and
Chief Executive Officer.
Dated: June 9, 2005