Unassociated Document
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): March 16, 2010
SPICY
PICKLE FRANCHISING, INC.
(Exact
name of registrant as specified in its charter)
|
Colorado
(State
or other jurisdiction
of
incorporation)
|
0-53000
(Commission
File
Number)
|
38-3750924
(IRS
Employer
Identification
No.)
|
90
Madison Street, Suite 700, Denver, Colorado 80206
(Address
of principal executive
offices) (Zip
Code)
(303)
297-1902
Registrant’s
telephone number, including area code
Not
Applicable
(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
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers
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Effective
March 16, 2010, Gregory Marshall, Patricia Stacey Reed, and Mo Siegel were
elected to the registrant’s board of directors. Mr. Marshall and Mr.
Siegel will each receive options to purchase 1,000,000 shares of the
registrant’s common stock at $0.16 per share (the market price as of their
election date) and annual compensation of $25,000.
Also
effective March 16, 2010, Presley Reed became the chairman of the board of
directors. Dr. Reed is married to Patricia Stacey Reed.
On
December 14, 2007, Dr. and Mrs. Reed, together with one of the registrant’s
other directors, participated in the transaction pursuant to which the
registrant sold an aggregate of 705 shares of Series A Preferred Stock and
warrants to purchase an aggregate of 5,287,500 shares of common stock for an
aggregate purchase price of $5,992,500. Dr. and Mrs. Reed purchased
120 shares of Series A Preferred Stock and warrants to purchase 900,000 shares
of common stock for $1,020,000.
On
September 22, 2009, Dr. and Mrs. Reed, together with one of the registrant’s
other directors, participated in an Amendment, Redemption and Conversion
Agreement related to the then outstanding 638.88 shares of the Series A
Preferred Stock pursuant to which the registrant redeemed 94.12 shares for a
total of $799,998, converted 307.88 shares of Series A Preferred Stock into
2,093,601 shares of Common Stock and converted its remaining 236.88 shares of
Series A Preferred Stock into 4,737,600 shares of Common Stock. Dr.
and Mrs. Reed converted 120 shares of Series A Preferred Stock in exchange for
2,400,000 shares of common stock. The registrant lowered the exercise
price of the warrants that were purchased with the Series A Preferred Stock to
$0.20 to per share and extended the expiration date of the warrants to September
22, 2014.
On
September 22, 2009, Dr. and Mrs. Reed, together with one of the registrant’s
other directors, participated in a transaction pursuant to which the registrant
sold an aggregate of 22.5 Units for cash in the amount of
$2,250,000. Each Unit consisted of 769,231 shares of our Common Stock
and a warrant to purchase an additional 384,615 shares of Common Stock at $.19
per share. The warrants expire September 22, 2014. Dr. and
Mrs. Reed purchased 16 units for $1,600,000 and received 12,307,696 shares of
common stock and 6,153,840 warrants.
In
December 2008, Dr. Reed and one of the registrant’s other directors granted the
registrant a line of credit which was to expire January 31, 2010. The
line of credit was for an aggregate of $550,000 and bore interest at a rate of
one percent above the prime rate and was secured by certain assets of the
registrant. At December 31, 2008, the interest rate on the borrowings
was 4.25% and balance outstanding was $100,000. Both Dr. Reed and the
other director increased the amount of the line.
On
September 30, 2009, the line of credit was renegotiated and the outstanding
principal and accrued interest, totaling $817,252, was converted into a
convertible promissory note (“Convertible Note”). The Convertible
Note is due January 31, 2012, bears interest at the same rate that the line of
credit did, one percent above the prime rate. Interest is payable
semi-annually. The balance owed to Dr. Reed is
$509,594.79. Dr. Reed may convert any amount of the principal and
accrued interest due into the registrant’s common stock at the rate of $0.13 per
share. In addition, for every two dollars converted into Common
Stock, the registrant will issue to the holder of the Convertible Note a warrant
to purchase one share of Common Stock. The exercise price of the
warrant will be equal to 120% of the price per share of the Common Stock
calculated using the average of the volume weighted average prices per share for
the 10 trading days prior to the election to convert.
Information
about these new directors is contained in the press release which has been filed
as an exhibit to this current report.
Item
9.01 Financial Statements
and Exhibits
|
Regulation
S-K
Number
|
Document
|
| |
|
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99.1
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Press
release dated March 18, 2010
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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 hereunto
duly authorized.
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SPICY
PICKLE FRANCHISING, INC.
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| |
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March
17, 2010
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By: /s/ Arnold
Tinter
Arnold Tinter
Chief Financial
Officer
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EXHIBIT
INDEX
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Regulation
S-K
Number
|
Document
|
| |
|
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99.1
|
Press
release dated March 18, 2010
|