UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: June 18, 2007
KIK Technology International, Inc.
(Exact name of small business issuer as specified in its charter)
Commission File Number: 0-30197
California 91-2021602
(State of incorporation) (IRS Employer ID Number)
590 Airport Road, Oceanside, California 92054
(Address of principal executive offices)
(760) 967-2777
(Issuer's telephone number)
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
CFR230.425)
[ ] 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 2.02 - RESULTS OF OPERATIONS AND FINANCIAL CONDITION
In the Company's Annual Report on Form 8-K for the year ended January 31, 2007,
filed with the U. S. Securities and Exchange Commission on or about April 30,
2007, the Company disclosed certain negative events related to the availability
of raw materials and the associated ability to produce adequate product to meet
consumer demand.
"The Company has experienced certain price increases in key raw materials
which have not been passed through in their entirety due to competitive
pressures from comparable products produced in Asian markets. As a result
of competitive pressures and difficulties in obtaining raw feedstock
materials as a result of the effects of Hurricane Katrina and Rita on
refineries located on the U. S. Gulf Coast, the Company experienced a
decline in its gross profit margin from approximately 11.19% (approximately
$218,000) for Fiscal 2006 to approximately 6.75% (approximately $125,000)
for Fiscal 2007. The Company continues to experience economic pricing
pressures caused by foreign competition and increases in domestic raw
material costs, which are directly related to the cost of crude oil from
both foreign and domestic markets. Management is aware of this situation
and is evaluating various remedies to restore the gross profit percentages
experienced in prior years."
"As evidenced response to the Company's presence at an industry trade show
in Las Vegas Nevada in April 2007, the Company's management continues to be
of the opinion that consumer demand for the Company's flat free tires
remains strong and, with adequate working capital and availability of raw
materials, could potentially increase in the next operating year. The
Company's products continue to have strong demand at the consumer level
and, although, the Company's raw feedstocks are petrochemical based, that
the Company will be able to meet product demands and generate sufficient
cash from regular product sales to support the Company's operations for the
next twelve months. In the event that daily normal sales activities do not
generate sufficient cash, management is of the opinion that alternative
sources of working capital exist either from existing shareholders making a
capital infusion or from new third party sources, including receivable
financing or secured bank lines of credit."
In our auditor's report, dated April 20, 2007, on our financial statements for
the year ended January 31, 2007, our auditors included the following paragraph"
"The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note C to the
financial statements, the Company's revenues have been declining and the
Company has been using cash in operating activities. Additionally, the
Company continues to experience the effects of Hurricane Katrina on the
availability of raw materials from Gulf Coast refineries and chemical
plants that are not yet producing at 100% capacity. The Company has
obtained some new working capital during Fiscal 2007 and continues to seek
additional outside sources of working capital to support that raised from
operations. The Company's future existence is dependent upon achieving
sales volumes sufficient to sustain the Company's cash requirements on a
day-to-day basis through working capital generated from both operations and
outside sources. These circumstances create substantial doubt about the
Company's ability to continue as a going concern and Management's plans in
regard to these matters are also described in Note C. The financial
statements do not contain any adjustments that might result from the
outcome of these uncertainties."
As of the date of this filing, management has been unable to acquire sufficient
additional working capital from either outside sources or its parent company,
KIK Polymers, Inc. of Calgary, Alberta, Canada. Accordingly, the Company
continues to experience negative cash flows from operating activities which
negatively impact the Company's ability to meet its daily operational cash
requirements.
On June 15, 2007, the filing deadline for the Company's Quarterly Report on Form
10-QSB for the quarter ended April 30, 2007, the Company filed a Form 12b-25,
Notice of Late Filing. Accordingly, the Company will have until June 20, 2007 to
complete this filing. In the event that the Company is unable to comply with the
conditions of Rule 12b-25, management anticipates that an "E" will be attached
to its trading symbol by NASD Regulation, Inc. on June 21, 2007. In the event
that our Form 10-QSB for the quarter ended April 30, 2007 is not complete and
filed by approximately July 20, 2007, the distinct possibility exists that the
Company's equity securities may have their approval for trading either suspended
or withdrawn.
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The ultimate resolution of the Company's financial difficulties, the ultimate
impact on the Company's operations and the future ability of the Company's
securities to be traded in an open market environment is unknown at this time.
ITEM 2.04 - TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT FINANCIAL
OBLIGATION OR AND OBLIGATION UNDER AND OFF-BALANCE SHEET ARRANGEMENT
On June 14, 2007, the Company received a demand notice from its Registered
Independent Certified Public Accounting Firm. The key segments of this demand
notice are as follows:
"KIK Technology International, Inc. (Company) is seriously delinquent in
the payment of its indebtedness to S. W. Hatfield, CPA for professional
services related to the performance of the review of your financial
statements for the respective quarters ended July 31, 2006 and November 30,
2006; the performance of the examination of your financial statements in
accordance with auditing standards established by the Public Company
Accounting Oversight Board (United States) for the year ended January 31,
2007; and the performance of certain requested procedures related to the
reliance on our audit work as it relates to the Company's financial
statements and the integration thereof into the financial statements of the
Company's parent company, KIK Polymers, Inc.
BE ADVISED THAT FINANCE CHARGES HAVE ACCRUED FROM THE DATE OF INITIAL
INVOICE, AT THE AGREED-UPON RATE OF 21.0%.
DEMAND IS MADE FOR PAYMENT IN THE AMOUNT OF $24,266.79. SEE THE ATTACHED
CALCULATION. THIS DEMAND IS AN ATTEMPT TO COLLECT A DEBT. ANY INFORMATION
YOU PROVIDE MAY BE USED TO ASSIST IN THE COLLECTION OF THIS DEBT.
PAYMENT IS TO BE MADE IN U.S. DOLLARS, VIA WIRE TRANSFER, NO LATER THAN
12:00 NOON, MONDAY, JUNE 25, 2007. WIRE INSTRUCTIONS WILL BE PROVIDED.
In the event that payment is not received by the due date, interest will
continue to accrue at the agreed upon rate. Further, failure to pay will
result in the filing of a lawsuit against you seeking all past due amounts,
and attorney's fees."
Accordingly, at this time, management anticipates that it will be unable to
comply with the requirements of the Demand Notice and anticipates that legal
action will be commenced by the Company's Registered Independent Certified
Public Accounting Firm. In our initial discussions with our auditors, management
understands that a withdrawal of either the respective Independent Accountant's
Review Report or Report of Registered Independent Certified Public Accounting
Firm on the Company's financial statements as listed above may occur due to the
non-payment for the related assurance services.
In the event that the Company's auditor commences legal action and/or withdraws
previously issued periodic review reports or annual audit reports due to
non-payment for services, there will be an immediate negative impact on the
trading ability of the Company's equity securities. Further, our auditors will
resign due to independence issues and the litigation. The Company will then be
required to engage new auditors to fulfill the Company's reporting requirements
under the Securities Exchange Act of 1934. Due to the Company's financial
condition, it is unlikely that the Company will be able to engage successor
auditors.
ITEM 5.02 - DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF
CERTAIN OFFICERS
On June 18, 2007, the Company's management and Board of Directors received a
Letter of Resignation dated June 15, 2007 from Mr. Kuldip C. Baid, the Company's
Chief Financial Officer and member of the Company's Board of Directors,
effective immediately. While Mr. Baid did not specifically state a reason for
his resignation, management and the Board of Directors believe the event is
related to the Company's financial condition and Mr. Baid's relationship with
the Company's Canadian based majority stockholder, KIK Polymers, Inc.
Mr. Baid has been provided with a copy of this disclosure and has verbally
advised the Company that he has no issues or disagreements with the information
herein. Mr. Baid's Letter or Resignation is attached as Exhibit 17.
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Due to the Company's financial condition at the present time, Mr. William
Knooihuizen will be the Company's Acting Chief Financial Officer
ITEM 9.01 - FINANCIAL STATEMENTS AND EXHIBITS
17.1 - Letter of Resignation from Kuldip C. Baid
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.
KIK TECHNOLOGY INTERNATIONAL, INC.
Dated: June 18, 2007 /s/ William M. Knooihuizen
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William M. Knooihuizen
President and Director
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