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): September 28, 2000
GOURMET GROUP, INC. (FORMERLY SEAIR GROUP, INC.)
(Exact Name of Registrant as Specified in its Charter)
NEVADA 33-55254-10 87-0438825
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State of Commission IRS Employer
Incorporation File Number I.D. Number
1 CHISHOLM TRAIL, BUDA, TEXAS 78610
Address of principal executive offices
Registrant's telephone number: (512) 295-4600
SEAIR GROUP, INC.
6831 EDGEWATER COMMERCE, PARKWAY #1110, ORLANDO, FL 32810
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On September 28, 2000, Morgan Kent Group, Inc., a Delaware corporation
("Morgan Kent"), acquired control of Gourmet Group, Inc. (formerly Seair Group,
Inc.) (the "Company") by becoming the holder of 67.8% of the Company's
outstanding capital stock. In addition, the Board of Directors and Management of
the Company completely changed as of such date, except that Steven Kerr, who had
been serving as the Company's sole director, remained on the Company's new Board
of Directors after such date. See Item 2, below, for further information.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 28, 2000, the Company entered into an Agreement and Plan
of Share Exchange (the "Agreement") with Our Food Products Group, Inc., a
privately-held Texas corporation ("Our Food"), and all of the shareholders (the
"Our Food Shareholders") of Our Food (seven shareholders in all), including Our
Food's majority shareholder, Morgan Kent. Pursuant to the Agreement, the Company
acquired 7,984,194 shares of Our Food Class B Common Stock, which constitute all
of the outstanding capital stock of Our Food, in exchange for issuing pro rata
to the Our Food Shareholders a total of 25,089,723 restricted shares of the
Company's common stock, $.001 par value ("Common Stock") (the "Share Exchange").
Our Food manufactures and distributes specialty food products under the trade
name, "Jardine Foods".
Immediately prior to the Share Exchange, the Company accrued the
obligation to issue 100,000 shares of Common Stock to an advisory firm for
services relating to the introduction of the parties to the Share Exchange.
Prior to the Share Exchange, the Company had outstanding 2,887,747 shares of
Common Stock (inclusive of such 100,000 shares) and, immediately after the Share
Exchange,
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the Company had outstanding 27,977,470 shares of Common Stock, 18,960,425 (or
67.8%) of which were held by Morgan Kent. Also, in connection with the Share
Exchange, the Company's Board of Directors adopted an incentive plan and granted
options to purchase an aggregate of 3,239,952 shares of Common Stock at exercise
prices ranging from $.00318 to $.23885 per share to replace fully-vested options
which had been outstanding under Our Food's incentive plan but which were
canceled in connection with the Share Exchange.
In connection with the Share Exchange, the Company also restated its
Articles of Incorporation (i) to change its name from Seair Group, Inc. to
Gourmet Group, Inc., (ii) to increase its authorized Common Stock from
25,000,000 shares of Common Stock to 50,000,000 shares, and (iii) to elect not
to be governed by Nevada Revised Statutes Sections 78.378 to 78.3793, inclusive,
relating to the acquisition of a controlling interest and Nevada Revised
Statutes Sections 78.411 to 78.444, inclusive, relating to combinations with
interested stockholders. The Company also changed its trading symbol on the OTC
Bulletin Board to "GOUG" to reflect its name change. As a result of the Share
Exchange, the Company acquired 7,984,194 shares of Class B Common Stock of Our
Food, and Our Food became a wholly-owned subsidiary of the Company. Before and
after the Share Exchange, KBK Financial, Inc. ("KBK"), a lender to Our Food,
held warrants to purchase 177,778 shares of Our Food Class B Common Stock,
subject to adjustment, at the exercise price of $.01 per share and warrants to
purchase 277,778 shares of Our Food Class B Preferred Stock, subject to
adjustment, at the same exercise price per share. Such Class B Preferred Stock
is convertible on a one-for-one basis, subject to adjustment, into shares of Our
Food Class B Common Stock. In order to obtain KBK's consent to the Share
Exchange, the Company pledged to KBK all of the outstanding
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shares of Our Food Class B Common Stock to secure Our Food's obligations to KBK
which, as of the date of the Share Exchange, consisted of $1,750,000 principal
amount due on May 15, 2003 and interest thereon due monthly at the rate of 13.5%
per annum.
In connection with the Share Exchange, Steven Kerr, previously the
Company's sole director and executive officer, resigned from his positions as an
officer of the Company and appointed the following individuals to serve on the
Company's Board of Directors (the "Board") with him: Fredrick Schulman
(Chairman), H. John Trube, Julie Tedesco, Jeffrey K. Moore, Daniel Matheson and
Steven Weismann. The new Board then appointed the following officers of the
Company: Fredrick Schulman - President and Chief Executive Officer; H. John
Trube - Executive Vice President, Secretary and Chief Operating Officer; and
Kimberly Eckert - Vice President and Chief Financial Officer. Each of these
officers also serves as an officer (with the same title) of Our Food. The
following officers and/or directors of the Company also serve Morgan Kent in the
respective capacities set forth below: Mr. Schulman - member of the Board of
Directors and President; Mr. Trube - member of the Board of Directors; and Mr.
J. Moore - Chairman of the Board. Mr. Matheson, Ms. Tedesco and Lois Shapiro,
who is married to Mr. Schulman, were among the Our Food Shareholders who
received shares of Common Stock in the Share Exchange. Mr. Schulman, Ms.
Tedesco, Mr. Trube, Mr. J. Moore, Ms. Eckert and Mr. Matheson were among those
Our Food option holders whose options were replaced with options to purchase
shares of the Company's Common Stock.
Simultaneously with the Share Exchange, Our Food entered into an
amendment ("Amendment") to the Credit and Security Agreement ("Credit
Agreement") which it had entered into as of May 31, 2000 with Wells Fargo
Business Credit, Inc. ("Wells Fargo"). The
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Credit Agreement provides for up to a $2,000,000 revolving line of credit, a
$110,000 equipment loan and a $1,223,000 real estate term loan secured by Our
Food's real property in Buda, Texas. In addition, the Company became a party to
the Amendment and the Credit Agreement and guaranteed all of Our Food's
obligations to Wells Fargo. In connection with the Credit Agreement, Morgan Kent
had entered into a Keep Well Agreement with Our Food and Wells Fargo pursuant to
which Morgan Kent was required to make payments to Our Food (by purchasing the
common stock or subordinated notes of Our Food) equal to amount of monthly net
loss incurred by Our Food. The Keep Well Agreement requires such payments to be
made monthly until Our Food has achieved six consecutive months of net income.
In connection with the Amendment, the Keep Well Agreement was amended so that
future payments by the Company to Our Food under the Keep Well Agreement would
be deemed to satisfy Morgan Kent's obligations under the Keep Well Agreement.
The Company has been considering the acquisitions of certain entities,
including entities in which one or more of the Our Food Shareholders and members
of the Board have an interest. The completion of such acquisitions would depend
upon market conditions, the availability of financing, the completion of due
diligence and negotiations and other factors. Such acquisitions could result in
the Company's issuance of additional shares of Common Stock, including to one or
more of the Our Food Shareholders and members of the Board.
Immediately following the Share Exchange: Morgan Kent owned 18,960,425
shares of Common Stock (67.8% of the outstanding); Mr. Matheson beneficially
owned an aggregate of 2,380,386 shares of Common Stock (8.5% of the
outstanding), consisting of 2,356,818 shares of Common Stock and options to
purchase 23,568 shares of Common Stock,
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exercisable immediately at the price of $.00318 per share and expiring December
1, 2002; Mr. Schulman and his wife, Lois Shapiro, each beneficially owned
4,083,697 shares of Common Stock (13.7% of the outstanding), consisting of
2,199,697 shares of Common Stock owned by Ms. Shapiro and options held by Mr.
Schulman to purchase 1,884,000 shares of Common Stock, exercisable immediately
at the price of $.15924 per share and expiring on December 27, 2003. Except for
Mr. Schulman and Ms. Shapiro with respect to one another's shares, each of the
Our Food Shareholders disclaimed beneficial ownership of the shares of Common
Stock acquired by the other parties. All shares and options discussed in this
paragraph were acquired in connection with the Share Exchange.
Through their ownership of Morgan Kent preferred stock, Messrs.
Jeffrey K. Moore and Matthew R. Moore (the "Moore Brothers"), voting together,
have the power to elect a majority of the board members of Morgan Kent. Each of
the Moore Brothers disclaims beneficial ownership of the other's shares of the
Morgan Kent preferred stock. There can be no assurance that a change of control
of the Company will not occur as a result of (i) sales of Morgan Kent preferred
stock owned by the Moore Brothers to achieve liquidity, or for any other reason,
or (ii) sales of the Company's Common Stock by Morgan Kent to fund other
business activities or investments or for any other reason.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
(a) On October 12, 2000, the Company selected the firm of Arthur
Andersen LLP ("Arthur Andersen") as the Company's independent auditor. On such
date, the Company also dismissed the firm of Meeks, Dorman & Company, P.A.
("Meeks") which had been serving as the Company's independent auditor. Arthur
Andersen has been serving as the auditor for Our
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Food. The Company's change of its independent auditor is a reflection of the
fact that, as a result of the Share Exchange, the operations of Our Food have
become the primary business of the Company.
(b) No report issued by Meeks on the Company's financial statements
for either of the past two fiscal years contained an adverse opinion or
disclaimer of opinion, or was qualified or modified as to uncertainty, audit
scope or accounting principals, except that the report issued by Meeks covering
the Company's financial statements for the fiscal year ended December 31, 1999
was qualified with respect to the Company's ability to continue as a going
concern. During the two most recent fiscal years of the Company, the Company had
no disagreements (within the meaning of Instruction 4 of Item 304 of Regulation
S-K) with Meeks as to any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure and there have
been no reportable events (as defined in Item 304 of Regulation S-K) during such
periods.
(c) During the two most recent fiscal years through the present, the
Company has not consulted with Arthur Andersen regarding the application of
accounting principles to a specified transaction or regarding the type of audit
opinion that might be rendered on the Company's financial statements or
regarding any matter that was the subject of a "disagreement" or "reportable
event" (each as used in the preceding paragraph).
(d) A letter of Meeks addressed to the Securities and Exchange
Commission is included as Exhibit 16 to this Form 8-K. Such letter states that
such firm agrees with the statements made by the Company in this Item 4 as they
refer to such firm.
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(e) The change of auditors was approved by the Board of Directors of
the Company on October 12, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) and (b) To be filed by amendment. The Company deems it to be
impracticable to file with this Current Report the financial statements relating
to the business acquired by the Company and the related pro forma financial
information. The Company expects to file the required financial information not
later than the 75th day following September 28, 2000 (December 12, 2000).
(c) Exhibits
The Company hereby agrees to provide to the Commission upon request
any omitted schedules or exhibits to the documents listed on this Item 7.
EXHIBIT NOS.
3.1 Restated Articles of Incorporation of Gourmet Group, Inc.
10.1 Agreement and Plan of Share Exchange, dated as of September
28, 2000, among Gourmet Group, Inc., Our Food Products
Group, Inc. and the shareholders of Our Food Products Group,
Inc. (incorporated by reference to Exhibit 10.1 to the
Schedule 13D filed by Morgan Kent Group et al. on October
10, 2000 relating to Gourmet Group common stock).
10.2 Gourmet Group, Inc. 2000 Incentive Plan.
10.3 Credit and Security Agreement by and between Our Food
Products Group, Inc. and Wells Fargo Business Credit, Inc.,
dated as of May 31, 2000.
10.4 Amendment, dated September 28, 2000, to Credit and Security
Agreement, with Gourmet Group, Inc. as an additional party.
10.5 Deed of Trust, Security Agreement and Financing Agreement,
dated as of May 31, 2000, given by Our Food Products Group,
Inc. unto a trustee for Wells Fargo Business Credit, Inc.
10.6 Guaranty, dated as of September 28, 2000, made by Gourmet
Group, Inc. for Wells Fargo Business Credit, Inc.
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10.7 Keep Well Agreement, dated as of May 31, 2000, among Our
Food Products Group, Inc., Morgan Kent Group, Inc. and Wells
Fargo Business Credit, Inc.
10.8 Amendment to Keep Well Agreement, dated as of September 28,
2000.
10.9 Pledge Agreement, dated September 28, 2000, between Gourmet
Group, Inc. and KBK Financial, Inc.
16 Letter of Meeks, Dorman & Company, P.A. to the Securities
and Exchange Commission pursuant to the requirements of Item
304(a)(3) of Regulation S-K.
ITEM 8. CHANGE IN FISCAL YEAR
The Company intends to change its fiscal year end from December 31st
to June 30th to conform to the fiscal year end of Our Food (the acquiror for
accounting purposes in the Share Exchange).
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this Current Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 12, 2000
GOURMET GROUP, INC.
By:/s/ Frederick Schulman
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Fredrick Schulman,
President and Chief Executive Officer
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GOURMET GROUP, INC.
LIST OF EXHIBITS ATTACHED
TO FORM 8-K
October 12, 2000
EXHIBIT NOS.
3.1 Restated Articles of Incorporation of Gourmet Group, Inc.
10.2 Gourmet Group, Inc. 2000 Incentive Plan.
10.3 Credit and Security Agreement by and between Our Food
Products Group, Inc. and Wells Fargo Business Credit, Inc.,
dated as of May 31, 2000.
10.4 Amendment, dated September 28, 2000, to Credit and Security
Agreement, with Gourmet Group, Inc. as an additional party.
10.5 Deed of Trust, Security Agreement and Financing Agreement,
dated as of May 31, 2000, given by Our Food Products Group,
Inc. unto a trustee for Wells Fargo Business Credit, Inc.
10.6 Guaranty, dated as of September 28, 2000, made by Gourmet
Group, Inc. for Wells Fargo Business Credit, Inc.
10.7 Keep Well Agreement, dated as of May 31, 2000, among Our
Food Products Group, Inc., Morgan Kent Group, Inc. and Wells
Fargo Business Credit, Inc.
10.8 Amendment to Keep Well Agreement, dated as of September 28,
2000.
10.9 Pledge Agreement, dated September 28, 2000, between Gourmet
Group, Inc. and KBK Financial, Inc.
16 Letter of Meeks, Dorman & Company, P.A. to the Securities
and Exchange Commission pursuant to the requirements of Item
304(a)(3) of Regulation S-K.