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 1933
September 27, 2006
Date of Report (Date of earliest event reported)
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iWORLD PROJECTS & SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
814-00689
(Commission File No.)
Nevada
(State or other jurisdiction of incorporation)
88-0492267
(IRS Employer Identification Number)
P.O. Box 2115, Addison, TX 75001-2115
(Address of principal executive offices) (ZIP Code)
1 (214) 236 - 8480
(Telephone number, including area code of agent for service)
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 8.01. OTHER EVENTS
On June 14, 2006 Robert Hipple, former CEO of the Company, filed an
Involuntary Chapter 7 Bankruptcy petition against the Company in United States
Bankruptcy Court for the Middle District of Florida under Chapter 7 of the
Bankruptcy Code. In the filings, Mr. Hipple represented himself and iTrust
Financial, Inc. of Cocoa, Florida, and claimed that the Company owes him
$47,925.82 and iTrust Financial, Inc. $58,404.24 or an aggregate of $106,330.06.
At the same time, Mr. Hipple filed a second Involuntary Chapter 7 Bankruptcy
Petition against iWorld Systems & Services, Inc., a wholly owned subsidiary of
the Company, in which it was claimed that the Company owes $30,000 to him and
$2,100 to iTrust Financial, Inc.
On July 11, 2006, the Company filed a Debtor's Motion to Dismiss and Response to
Involuntary Petition in the Florida Bankruptcy Court, Orlando Division, on
behalf of iWorld Projects & Systems, Inc., and iWorld Systems & Services, Inc.
On August 22, 2006, a hearing was held in the Central Florida Bankruptcy court
in which Mr. Hipple and the Company, represented by Mr. Carl Generes, attorney,
as outside legal counsel, presented arguments and evidence in the cases. The
court determined that additional time should be allowed for additional creditors
of the Companies to file with the court, and scheduled another hearing for
September 20, 2006.
Immediately following the August 22 hearing in Florida, Mr. Hipple and the
Company's legal counsel reached a tentative settlement agreement. A joint motion
was subsequently filed with the bankruptcy court to abate the bankruptcy filings
for 30 days so an agreement between the parties could be negotiated. The court
agreed and scheduled a final hearing on the matter for September 20, 2006.
On September 20, 2006, a settlement agreement was agreed and signed by Robert
Hipple, David L. Pells and Carl Generes, representing all parties. Terms of the
Settlement Agreement included dismissal of the bankruptcy motions by Hipple;
agreement by iWorld to re-submit a confession of judgment in the Longview
lawsuit in New York; unconditional mutual releases from claims and liabilities,
an iWorld note to pay Mr. Hipple $100,000 in twelve months; Hipple agreement to
sell all iWorld stock owned by himself, his family and iTrust Financial back to
the Company at $0.0035/share; mutual restraints on both parties from making
negative statements; and agreement to disclose the Settlement Agreement in an
8-K filing with the SEC. The agreements to pay Hipple $100,000 and to repurchase
company stock are to be documented in separate Notes. The Settlement Agreement
was approved by the Company's Board of Directors. A copy of the Settlement
Agreement is included in this filing as Attachment 1.
On the afternoon of September 20, 2006, a hearing was held in the Central
Florida Bankruptcy Court in Orlando, Florida, with iWorld appearing by
telephone. Based on testimony to the court by Mr. Hipple and Mr. Generes,
representing iWorld, that a Settlement Agreement had been signed and that both
sides have agreed that the bankruptcy should be dismissed, the Court agreed and
immediately dismissed the bankruptcy cases for both iWorld Projects & Systems,
Inc. and iWorld Systems & Services, Inc., with no further motions or filings by
either side required.
On September 22, 2006, the Court filed Order Granting First Amended Motion to
Dismiss Case, in which bankruptcy case no. 6:06-bk-01383-KSJ against iWorld
Projects & Systems, Inc. was officially ordered dismissed. That court order is
included in this filing as Attachment 2. Also on September 22, 2006, the court
filed Order Granting First Amended Motion to Dismiss Case, in which bankruptcy
case no. 6:06-bk-01381-KSJ against iWorld Systems & Services, Inc. was
officially ordered dismissed. That court order is included in this filing as
Attachment 3.
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.
Date: September 27, 2006
iWORLD PROJECTS & SYSTEMS, INC.
By /s/ David Pells
-------------------------------------
David L. Pells, President, acting CEO
ATTACHMENT 1
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement is made and entered into between
and among iWorld Projects & Systems, Inc., a Nevada corporation ("IWPS"), iWorld
Systems & Services, Inc., a Florida corporation ("IWSS"), and David Pells
("Pells") sole officer of IWPS and IWSS (collectively referred to as the "iWorld
Parties"); and Robert Hipple, an individual resident of Florida ("Hipple") and
iTrust Financial, Inc., a Florida corporation ("iTrust") to resolve, settle,
discharge, terminate and otherwise eliminate all claims, debts, obligations,
actions, and causes of action between and among them, on the following terms and
conditions:
1. Voluntary Dismissals. Hipple and iTrust will withdraw, dismiss and otherwise
terminate the pending Involuntary Chapter 7 Bankruptcy proceedings now pending
in the United States Bankruptcy Court for the Middle District of Florida in
Cases 6:06-bk-01381-KSJ and 6:06-bk-01383-KSJ (the "Bankruptcy Actions"), with
the consent of the iWorld parties and the dismissal of the bankruptcy petitions
by the Court with the mutual consent of the parties.
2. Confession of Judgment. Immediately upon execution of this Agreement by all
parties, IWPS will re-submit a previously entered confession of judgment to the
Fifth, Sixth and Seventh Claims for Relief against IWPS in the Amended Complaint
in the pending action styled Longview Fund et al vs. iWorld Projects & Systems,
Inc., et al, Case No. 05 CIV 6745 (KMK) in the United States District Court for
the Southern District of New York (the "Longview Litigation"). The confession of
judgment will not include judgment against IWPS under the First, Second or
Fourth Claims for Relief in the Amended Complaint, as to which IWPS denies that
there was any securities fraud, misrepresentations, fraud, willful misconduct or
false statements or omissions.
3. Mutual Releases. The iWorld Parties unconditionally release, discharge, and
hold harmless Hipple and iTrust from any claim, loss, debt, liability,
obligation, tax, expense or other liability of any kind or type, now existing or
which, with the passage of time may arise hereafter based on facts and
circumstances now existing, whether now known or unknown and whether based on
Hipple's prior service as an officer and director of IWPS or IWSS or otherwise.
Hipple and iTrust unconditionally release, discharge, and hold harmless the
iWorld Parties from any claim, loss, debt, liability, obligation, expense or
other liability of any kind or type, now existing or which, with the passage of
time may arise hereafter based on facts and circumstances now existing, whether
now known or unknown. Notwithstanding the foregoing, IWPS shall indemnify and
hold harmless Hipple from any loss, damage, claim, liability, judgment or other
expense arising out of or resulting from the actions or causes of action alleged
in the Longview Litigation to the fullest extent permitted or authorized under
the laws of Nevada, and the Articles of Incorporation and By-laws of IWPS. With
respect to the Longview Litigation, IWPS asserts and maintains that IWPS and its
officers and directors engaged in no wrongdoing, misconduct, misrepresentation,
omission, or other willful act or misconduct in their dealings with Longview
Equity Fund and Longview International Equity Fund.
4. Payment of Debts. IWPS and IWSS agree that Hipple and iTrust are creditors of
IWPS and/or IWSS and it is further agreed that all claims, debts and other
amounts owed to Hipple and iTrust shall be incorporated into promissory notes
payable to each, in principal amounts to be determined in a total combined
principal amount of $100,000, which shall be the joint and several obligation of
IWPS and IWSS, payable in one year from the date of issue plus interest at the
rate of eight (8) percent per annum until paid. Execution and delivery of the
promissory notes shall be a full discharge and satisfaction of all other debts,
claims, accounts and liabilities owed or claimed to be owed to Hipple and iTrust
by IWPS and IWSS, except as otherwise provided in this Agreement.
5. Redemption of Stock. IWPS agrees to purchase and redeem, and Hipple agrees to
transfer and sell to IWPS, all of the shares of common stock of IWPS now held by
Hipple, Hipple's wife, Hipple's wife for the benefit of his children, and iTrust
Financial, Inc. represented by certificates 4013, 4086, 4087, 4127, 4128 and
4129 for a total of 15,250,000 shares, at a per share price of $0.0035 per
share. The sale shall be pursuant to six promissory notes, one for each stock
certificate, in the total aggregate principal amount of $ 53,375.00 plus
interest at eight (8) percent per annum due in eighteen (18) months, and the
transfer and sale of the shares shall be deemed to be closed and the sale
complete only upon the payment of each promissory note by IWPS. The stock
certificates shall continue to be held by Hipple until such time as each
promissory note is paid in full, and in the meantime, the certificate holder
shall be entitled to vote the shares and otherwise enjoy all benefits as a
stockholder of IWPS. In the event that the promissory notes are not paid in 18
months, then full ownership of the shares shall revert to the certificate
holders. The promissory notes can be paid at any time within the 18 month
period, at which time the shares paid for will be legally transferred to and
delivered to iWorld.
6. Restraint. Neither the iWorld Parties, the directors of IWPS, nor Hipple and
iTrust, will make, distribute, repeat, or otherwise engage in, cause or repeat
any negative comments, statements, references or other utterances regarding the
others, and will hereafter refrain from any and all comments or statements of
any kind regarding the other.
7. SEC Report. The execution and approval of this Settlement and Release
Agreement and the terms thereof shall be reported and disclosed by IWPS in a
Form 8-K Report filed with the United States Securities and Exchange Commission
within four (4) business days, in language reviewed and agreed to by all parties
hereto.
8. Settlement Contingent on Court Approval. This Agreement is contingent upon
the dismissal of the Bankruptcy Actions with each party bearing its own costs
and expenses.
The foregoing is agreed to and is intended to be a full, complete and final
discharge, release and satisfaction of all claims and obligations of any kind,
known or unknown between and among the parties, except as expressly provided for
herein, and is entered into with full knowledge of the consequences thereof, on
advice of legal counsel, and for full and valuable consideration, the receipt
and sufficiency of which are expressly agreed to and acknowledged by all
parties.
The undersigned have executed this Agreement this 20th day of September, 2006.
iWorld Projects & Systems, Inc. iWorld Systems & Services, Inc.
By: __________________________ By: ____________________________
David Pells, President David Pells, President
______________________________ ________________________________
David Pells Robert Hipple
ITrust Financial, Inc.
By: ___________________________
Robert Hipple, President
Approved as to form:
_______________________________
Carl Generes
Attorney for iWorld Projects & Systems, Inc.
and iWorld Systems & Services, Inc.
ATTACHMENT 2
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
In re
IWORLD SYSTEMS & SERVICES, INC.,
Debtor.
Case No. 6:06-bk-01381-KSJ
Chapter 7
ORDER GRANTING FIRST AMENDED MOTION TO DISMISS CASE
This case came on for hearing on September 20, 2006, on the First Amended Motion
to Dismiss Case (the -Motion") (Doc. No. 26). After reviewing the pleadings,
considering the position of interested parties, and based on the settlement
agreement reached between the debtor and the petitioning creditors, it is
ORDERED:
1. The Motion (Doc. No. 25) is granted.
2. This Chapter 7 case is dismissed.
DONE AND ORDERED in Orlando, Florida, this 22nd day of September, 2006.
/s/ Karen S. Jennemann
KAREN S. JENNEMANN
United States Bankruptcy Judge
ATTACHMENT 3
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
In re
IWORLD SYSTEMS & SERVICES, INC.,
Debtor.
Case No. 6:06-bk-01381-KSJ
Chapter 7
ORDER GRANTING FIRST AMENDED MOTION TO DISMISS CASE
This case came on for hearing on September 20, 2006, on the First Amended Motion
to Dismiss Case (the -Motion") (Doc. No. 25). After reviewing the pleadings,
considering the position of interested parties, and based on the settlement
agreement reached between the debtor and the petitioning creditors, it is
ORDERED:
1. The Motion (Doc. No. 25) is granted.
2. This Chapter 7 case is dismissed.
DONE AND ORDERED in Orlando, Florida, this 22nd day of September, 2006.
/s/ Karen S. Jennemann
KAREN S. JENNEMANN
United States Bankruptcy Judge