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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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):
May 26, 2005
INTEGRATED PERFORMANCE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
New York 000-30794 11-3042779
(State of incorporation) (Commission File No.) (IRS Employer
Identification No.)
901 Hensley Lane
Wylie, Texas 75098
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 291-1452
Not Applicable
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(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:
[ ] 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 1.01 Entry into a Material Definitive Agreement.
On May 26, 2005, Integrated Performance Systems, Inc. (the "Company")
entered into a Compromise and Settlement Agreement (the "Settlement
Agreement") with La Jolla Cove Investors, Inc. ("La Jolla"). The Settlement
Agreement relates to:
* the termination and cancellation of a Securities Purchase Agreement
(the "Purchase Agreement") and a Registration Rights Agreement (the
"Registration Rights Agreement") entered into between the Company
and La Jolla on October 24, 2003;
* the full conversion by La Jolla of a $250,000 8% Convertible
Debenture, issued by the Company to La Jolla on October 24, 2003
(the "Debenture"), into 2,400,000 shares of common stock of the
Company;
* the termination and cancellation of a Warrant to Purchase Common
Stock issued by the Company to La Jolla on October 24, 2003 (the
"Warrant"); and
* the mutual settlement and release of all claims of the Company or La
Jolla related to the Purchase Agreement, the Registration Rights
Agreement, the Debenture or the Warrant.
Under the Purchase Agreement, on October 24, 2003, the Company issued
the Debenture and the Warrant to La Jolla. The original terms of the
Debenture provided that the Debenture bore interest at 8% annually, matured
on October 24, 2005, and was convertible, in whole or in part, into shares
of the Company's common stock. The number of shares of common stock into
which the Debenture was convertible was equal to the dollar amount of the
Debenture being converted multiplied by eleven, minus the product of the
conversion price, multiplied by six and two-thirds times the dollar amount
of the debenture being converted, divided by the conversion price. The
conversion price was equal to the lesser of $1.50 or 80% of the average of
the five lowest volume weighted average price days during the 20 trading
days before but not including the conversion date.
The original terms of the Warrant granted La Jolla the right to
purchase 1,666,666 shares of common stock of the Company. The Warrant
provided that it was exercisable only concurrently or subsequently with a
conversion of the Debenture and then only for that number of shares of
common stock equal to ten times the principal amount of the Debenture being
converted on the conversion date. The exercise price of the Warrant was
$1.50 per share.
Under the Registration Rights Agreement, the Company granted La Jolla
certain registration rights under the Securities Act of 1933, as amended,
for the shares of common stock issuable to La Jolla upon conversion of the
Debenture and exercise of the Warrant.
Pursuant to the terms of the Settlement Agreement, in consideration of
(1) the payment by the Company of $200,000 in cash to La Jolla, (2) the full
conversion by La Jolla of the Debenture, including the principal amount and
all accrued interest under the Debenture, into 2,400,000 shares of common
stock of the Company and (3) the Company's grant of certain registration
rights relating to the 2,400,000 shares issued to La Jolla, the Company and
La Jolla agreed to terminate, cancel and discharge the Purchase Agreement,
the Registration Rights Agreement, the Debenture and the Warrant, and to
fully release and discharge each other from all claims, rights and
obligations under, relating to or arising from the Purchase Agreement, the
Registration Rights Agreement, the Debenture or the Warrant, or any other
dealings between the Company and La Jolla prior to the date of the
Settlement Agreement.
Item 1.02 Termination of a Material Definitive Agreement.
See the Company's disclosure in Item 1.01 above regarding (1) the
termination of the Purchase Agreement and the Registration Rights Agreement,
(2) the full conversion of the Debenture into shares of common stock of the
Company and (3) the termination of the Warrant.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Number Description
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10.1 Compromise and Settlement Agreement, dated May 26, 2005,
between the Company and La Jolla Cove Investors, Inc.
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.
INTEGRATED PERFORMANCE SYSTEMS, INC.
Dated: May 26, 2005 By: /s/ BRAD J. PETERS
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Name: Brad J. Peters
Title: Vice President and Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
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10.1 Compromise and Settlement Agreement, dated May 26, 2005,
between the Company and La Jolla Cove Investors, Inc.