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 24, 2006
INNOVA HOLDINGS, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 000-33231 95-4868120
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(State or other jurisdiction (Commission (IRS Employer
of incorporation or organization) File number) Identification No.)
17105 San Carlos Boulevard, Suite A6151, Fort Myers, Florida 33931
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(Address of principal executive offices) (Zip Code)
(239) 466-0488
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(Registrant's Telephone Number, Including Area Code)
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(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 for 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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SECTION 1 REGISTRANT'S BUSINESS AND OPERATIONS
Item 1.01 Entry into a Material Definitive Agreement
On January 24, 2006, Innova Holdings, Inc. (the "Company") entered into a
Letter Agreement (the "Agreement") with CoroWare, Inc. ("CoroWare"), under which
the Company agreed to purchase and CoroWare agreed to sell all of its assets
including, without limitation, all hardware, software, employee relations,
customer contacts in the military and homeland security markets, contacts with
Microsoft, Inc. and all other customers, and all other tangible and intangible
assets including all developed software.
CoroWare is a systems integration firm with particular expertise in the
area of mobile service robotics. CoroWare is the only mobile service robotics
company to join the Microsoft (R) Windows Embedded Partner Program. CoroWare
uses the Windows XP Embedded operating system to power its mobile service
robots, which are based on de facto standards, off-the-shelf hardware and proven
software.
The purchase price will consist of: (a) up to $450,000 in cash, of which
$100,000 is non-contingent and the balance of $350,000 is contingent based on
sales and the gross profit percentage of the CoroWare business; (b) up to
30,000,000 restricted shares of the Company's common stock, of which 5,000,000
are non-contingent and vest in three equal annual installments commencing one
year from the closing, and the balance of 25,000,000 is contingent based on
sales and the gross profit percentage of the Coroware business; and (c)
2,000,000 common stock options exercisable at $.018 per share, vesting in three
equal annual installments commencing one year from the closing, with a term of
ten years from the date of grant, to be allocated to employees of CoroWare. In
addition, the Company shall assume specific liabilities of CoroWare in the
amount of $98,168, and no other liabilities. The purchased business asssets will
be placed in a new subsidiary of the Company, which will change its name to
"CoroWare" after the closing.
In the event that the Company enters into a binding agreement to sell all
of its stock or assets, or all of the assets acquired from CoroWare, prior to
receipt by CoroWare of all of the restricted share portion of the purchase price
to be paid under the Agreement, then the remaining portion of the restricted
share component of the purchase price shall be delivered to CoroWare immediately
prior to the closing of such transaction.
The new subsidiary shall enter an employment agreement with each key
employee of CoroWare. In addition, in the first twelve month period following
closing, such key employees shall be eligible for a compensation bonus based on
sales of not less than $1,900,000.
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The Company's obligation to purchase the assets set forth in the Agreement
is subject to a satisfactory due diligence review. If the Company does not
notify CoroWare on or prior to April 30, 2006 that it is not satisfied with the
results of the due diligence review, this requirement will be deemed met. For
purposes of the Agreement, the Company will be deemed satisfied with the due
diligence review if (a) audited financial statements to be delivered by CoroWare
are not materially different from the unaudited financial information previously
provided to the Company by Coroware; and (b) all other information relating to
the business assets of CoroWare does not differ materially from the information
provided to the Company by CoroWare prior to the date of the Agreement.
The obligations under the Agreement terminate in the event that (a) a
definitive written agreement is not executed by April 30, 2006; (b) the
transaction contemplated by the Agreement has not closed by May 31, 2006; or (c)
there is a material adverse change in the business of either the Company or
CoroWare.
The determination of the consideration to be paid in the transaction was
determined in arms length negotiations between the Boards of Directors of the
Company and CoroWare. The negotiations took into account the value of the assets
sold to Company and the consideration paid. At the time of the transaction,
there were no material relationships between CoroWare and the Company, or any of
its affiliates, any director or officer of the Company, or any associate of any
such officer or director.
SECTION 9-FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
10.1 Letter Agreement dated January 24, 2006 between the Company and
CoroWare, Inc.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INNOVA HOLDINGS, INC.
Date: January 27, 2006 By: /s/ Walter K. Weisel
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Walter K. Weisel
Chairman and Chief Executive Officer
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