SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 14, 2006
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BRAVO! FOODS INTERNATIONAL CORP.
(Exact Name of Registrant as Specified in Charter)
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DELAWARE 0-25039 62-1681831
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
11300 US Highway 1, Suite 202
North Palm Beach, Florida 33408 USA
(Address of Principal Executive Offices)
(561) 625-1411
(Registrant's telephone number, including area code)
(Former Name or Former address, if Changed Since Last Report)
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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
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act
(17 CFR 240.14a-12(b))
[ ] 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 4.02 Non-reliance On Previously Issued Financial Statements, Related
Audit Reports and Completed Interim Reviews
(a) The Company's Audit Committee, in conjunction with the Company's Chief
Executive Officer and Chief Accounting Officer, has concluded that the Company's
financial statements for the years ended December 31, 2001 thorough 2005, as
well as interim quarterly reports for the quarterly periods ended March 31, 2002
through March 31, 2006, should no longer be relied upon because of certain
errors in such financial statements as discussed below.
(1) On May 15, 2006, the Company filed its Form 10-QSB for the quarterly
period ended March 31, 2006, which report contained a disclosure of the
likelihood of the Company's restatement of certain of its previously filed
financial statements. The Company noted that "it is likely that we will restate
our financial statements for the years ending December 31, 2005 and December 31,
2004. In addition, it is likely that we will restate our interim financial
statements for the quarterly periods reported in 2005 and 2004." In July 2006,
the Company determined that restatements were necessary, and on July 10, 2006,
the Company submitted a draft of proposed changes to its financial statements
for the years ending December 31, 2005 and December 31, 2004 and interim
periods, to the Securities and Exchange Commission for review. On August 1,
2006, the Company filed its formal response to the Commission's last comment
letter and acknowledged the necessity of the proposed restatements. On or about
August 11, 2006, the Company determined that reclassification of its convertible
preferred financings was necessary.
(2) In December 2005, the Company began to examine whether it needed to
reclassify its convertible preferred and convertible debt financing, and
subsequently began an examination of such proposed reclassification during the
first fiscal quarter of 2006. The Company initiated this examination as a result
of a review by the Securities and Exchange Commission of its Form 10-KSB for the
fiscal year ended December 31, 2004 and its pending SB-2 registration statement,
which the Company filed with the SEC earlier in December 2005. That examination
included the accounting methodology utilized to report the value of embedded
derivatives associated with certain of its past financings, including the
balance sheet reclassification and valuation of warrants associated with such
financing instruments. The Company also examined its accounting for the
amortization of discounts, the impact of certain modifications to warrants and
the beneficial conversion features associated with its various financing
instruments.
The Company reported in its Form 10-QSB for the quarterly period ended
March 31, 2006, that it had undertaken an examination of the classification and
accounting methodology for its convertible preferred and convertible debt
financings. At that time, the Company reported on the likelihood that
restatements of prior financial positions would be necessary in light of its
examination.
The Company has determined that it was necessary to restate its financial
results for fiscal years ended December 31, 2005, 2004, 2003, 2002 and 2001 to
reflect accounting adjustments for
* identification of embedded derivatives in certain convertible notes
which required bifurcation;
* identification of embedded derivatives in certain preferred stock which
required bifurcation;
* balance sheet reclassification of outstanding warrants and non-employee
options from equity to derivative liabilities as a result of "tainting"
from a variable conversion feature in November 2003
convertible notes and the associated recognition of fair value changes
during the time the instruments are required to be reclassified as
derivative liabilities; and
* correction of initial valuation of free-standing warrants, and for the
subsequent modification of warrants.
The Company is currently evaluating several valuation methods, based upon
discussions of the foregoing with the Commission.
In addition to the above adjustments, in connection with its examination
of prior periods, the Company also determined the need to reflect accounting
adjustments for the following:
* correction of fair value calculations of employee stock options, the
method of recognition for compensation expense and modifications made to
certain employees options;
* reclassification of shipping and handling costs;
* reporting of accrued interest on a promissory note from the Company to
International Paper; and
* accounting treatment of product development costs.
Adjustments for these items were reflected in the Form 10-QSB filed by the
Company for the quarterly period ended March 31, 2006.
(3) The Company's Audit Committee, as well as Company's authorized
officers, has discussed with the Company's independent accountant the matters
disclosed in this filing.
(b) Not applicable.
(c) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: August 14, 2006 Bravo! Foods International Corp.
By: /s/ Roy D. Toulan, Jr.
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Roy D. Toulan, Jr.,
Vice President, General Counsel