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
Date
of Report (date of earliest event reported): January 22, 2008
Home Solutions of America, Inc.
(Exact Name of Registrant as Specified in its Charter)
| |
|
|
|
|
| Delaware
|
|
001-31711
|
|
99-0273889 |
| (State of Incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer Identification No.) |
1500 Dragon Street, Suite B, Dallas, Texas 75207
(Address of Principal Executive Offices)
| |
|
|
Registrant’s Telephone Number, Including Area Code:
|
|
(214) 623-8446 |
Former name or 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:
o Written communications pursuant to Rule 425 under the 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))
Item 1.01 Entry into a Material Definitive Agreement
Home Solutions of America, Inc
(the “Company”) has settled its initial claim on the Vista Royale Condominiums component
of the Florida Insurance Guarantee Association (“FIGA”) construction recovery claim for
$35 million. After deduction for monies previously paid as well as payments to the Vista Homeowner’s
Association, certain legal fees and payments made to
select subcontractors, the Company received approximately $14 million. The Company has two additional
unresolved claims with FIGA for work completed on the Delmar Condominiums and Tropic Villa
Condominiums in Florida which the Company continues to pursue. The settlement removes a lien of
$23.7 million recorded against the property for the unpaid portion of work, which was
dismissed as part of the settlement. A copy of the final settlement agreement has been
included as Exhibit 4.1 and is incorporated by reference herein.
The Company entered into a
Forbearance Agreement dated February 6, 2008 with its lenders under its Revolving
Credit Facility, Term Loan and Letter of Credit Facility. Under the Forbearance Agreement,
the Company paid $10.1 million in principal from the FIGA proceeds, which reduced the
outstanding amounts due under the facilities to $39.9 million, in exchange
for the lenders agreeing, subject to certain conditions including the absence of
any subsequent default, to forego taking any action permitted under the original
credit facility until July 1, 2008. The Company also paid all accrued interest
in an amount of $1.28 million and a fee of $100,000 to the lenders.
In addition the Company is permitted to keep up to $1.25 million
from an anticipated Federal Tax Refund expected during the 2008 first
quarter and up to $1.75 million from any future settlement with FIGA
on the Delmar property. Proceeds received by the Company above these
amounts will be used to further pay down the Company’s obligation to its lenders.
A copy of the Forbearance Agreement has been included as Exhibit 4.2 and is
incorporated by reference herein.
Item 5.02 Departure of Directors
of Certain Officers; Election of Directors; appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Brian Marshall has resigned
as Vice President of Home Solutions of America and President of the Company’s wholly
owned subsidiary Fireline Restoration, Inc. (which the Company acquired in July 2006).
He will continue as a member of the Board of Directors until the expiration of his
term at the time of the Company’s annual meeting later this year.
FORWARD LOOKING STATEMENTS
This Current Report on Form 8-K contains forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.
Forward-looking statements include statements with respect to our beliefs, plans, objectives,
goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and
involve known and unknown risks, uncertainties and other factors, which may be beyond our control,
and which may cause our actual results, performance or achievements to be materially different from
future results, performance or achievements expressed or implied by such forward-looking
statements. All statements other than statements of historical fact are statements that could be
forward-looking statements. You can identify these forward-looking statements through our use of
words such as “may,” “will,” “can” “anticipate,” “assume,”
“should,” “indicate,” “would,”
“believe,” “contemplate,” “expect,” “seek,” “estimate,”
“continue,” “plan,” “point to,” “project,”
“predict,” “could,” “intend,” “target,” “potential,”
and other similar words and expressions of the
future. Forward-looking statements may not be realized due to a variety of factors, including,
without limitation, future economic, competitive and market conditions, regulatory framework, and
future business decisions, and the other factors referenced in our Annual Report on Form 10-K for
the year ended December 31, 2006, which contains a list of specific risk factors that could cause
actual results to differ materially from those indicated by our forward-looking statements made in
this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| |
|
|
4.1
|
|
Settlement Agreement and Mutual General Release |
|
|
|
4.2
|
|
Forbearance Agreement |
2