UNITED STATES
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
November 23, 2005 (November 17, 2005)
Date of Report (Date of earliest event reported)
Spectrum Sciences & Software Holdings Corp.
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
| Delaware
|
|
000-50373
|
|
90-0182158 |
| |
(State or other jurisdiction of
incorporation)
|
|
(Commission File
Number)
|
|
(IRS Employer
Identification No. |
| |
|
|
| 3130 Fairview Park Drive, Suite 400, Falls Church, VA
|
|
22042 |
| |
| (Address of principal executive offices)
|
|
(Zip Code) |
| |
|
|
Registrant’s telephone number, including area code
|
|
(703) 564-2967 |
|
|
|
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):
| o |
|
Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425) |
| |
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement.
As previously reported, a complaint was filed in July 2004 by Todd Augenbaum (“Augenbaum”)
against Robert Genovese, Endeavor Capital Group, LLC, and BG Capital Group, Ltd. (collectively, the
“Genovese Defendants”) seeking to recover “short-swing profits” alleged to have been unlawfully
obtained by Mr. Genovese and his affiliated companies in violation of Section 16(b) of the
Securities Exchange Act of 1934. The suit alleges that Genovese and his affiliated companies
beneficially owned more than 10% of the outstanding common stock of Spectrum Sciences & Software
Holdings Corp. (the “Company”) and that Genovese acted as an officer and director of the Company.
The Company was named as a nominal defendant in the action, but has no liability for the asserted
claims.
On November 17, 2005, the Company entered into a Stipulation and Agreement of Compromise,
Settlement and Release (the “Stipulation”) with Augenbaum and the Genovese Defendants for the
resolution of all claims in this action. Pursuant to the Stipulation, the Genovese Defendants
agreed to make settlement payments with a total value of $3,250,000, payable as follows: (i) an
initial payment of $800,000 in cash following Court (as defined below) approval of the Stipulation;
(ii) a payment of $175,000 in cash within six months following such Court approval; and (iii) a
payment of $2,275,000 in cash or the Company’s common stock, valued at the closing market price of
such stock on the date of delivery, within eighteen months following such Court approval. The
Stipulation provides that, of the total amounts payable by the Genovese Defendants, the $800,000
and $175,000 payments are to be paid directly to counsel for Augenbaum for attorneys’ fees and
reimbursement of expenses and the $2,275,000 balance is to be paid directly to the Company.
The Stipulation requires approval of the United States District Court, Southern District of
Florida (the “Court”), where the case was filed. The parties will submit the Stipulation for
approval as soon as possible, and the Company anticipates that the Court will approve the
Stipulation on the terms agreed to by the parties.
In connection with the Stipulation, the Company has also agreed to a Settlement and Standstill
Agreement with Robert Genovese and BG Capital Group, Ltd. pursuant to which the Company will accept
in satisfaction of all settlement amounts under the Stipulation, other than the initial $800,000
payment, one million shares of the Company’s common stock. In return, Mr. Genovese and BG Capital
have agreed not to engage in certain actions with respect to the Company until December 31, 2008,
including acquiring any securities of the Company, attempting to influence the voting of
shareholders in Company matters, issuing any press releases, making published statements or
publicly disclosing any proposals concerning the Company, or attempting to control the management,
Board of Directors, or policies of the Company. The Settlement and Standstill Agreement is
conditioned upon approval of the Stipulation by the Court.
Item 8.01 Other Events.
As previously reported, the Securities and Exchange Commission (the “SEC”) notified the
Company on April 28, 2004 that it was conducting an informal investigation into the
Company. After being notified by the SEC of such investigation, the Company fully cooperated
and provided all requested information. By letter dated November 17, 2005, the SEC notified the
Company that the SEC has terminated its investigation and has determined not to pursue an
enforcement proceeding against the Company or any current director or officer of the Company.
As previously reported, Donal R. Myrick, the former President and Chief Executive Officer of
the Company, filed a complaint against the Company in August 2004 for alleged breach of employment
contracts and damages associated with a delayed stock sale. The Company has agreed with Mr. Myrick
to a settlement and dismissal of all claims in the action in consideration of the payment to Mr.
Myrick of $155,000.