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): August
6, 2008
|
|
InfoSonics
Corporation
|
|
(Exact
name of registrant as specified in its
charter)
|
|
Maryland
|
|
010-32217
|
|
33-0599368
|
|
(State
or other jurisdiction of incorporation)
|
|
(Commission
File Number)
|
|
(IRS
Employer Identification No.)
|
|
4350
Executive Drive, Suite 100, San Diego, CA
92121
|
|
(Address
of principal executive offices including zip
code)
|
|
Registrant's
telephone number, including area code: (858)-373-1600
|
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.
On
August
6, 2008, Infosonics Corporation ("the Company") entered into a Memorandum of
Understanding to settle the derivative lawsuit entitled In
Re: InfoSonics Corporation Derivative Litigation,
Lead
Case No. 06 CV 1336, pending in the United States District Court for the
Southern District of California. This lawsuit is an alleged action against
the
Company as a nominal defendant and certain of its current and former officers
and directors. The derivative lawsuit relates to the Company’s restatement of
its first quarter 2006 financial statements and the grant of stock options
in
December 2005. The settlement was entered into to avoid the expense and
disruption of continued protracted litigation and does not constitute an
admission of liability by the Company or its current or former officers and
directors. Specifically, the Company and its current and former officers and
directors deny any liability or responsibility for the claims made and make
no
admission of any wrongdoing. Under the settlement, which is subject to
preliminary and final Court approval and other conditions, in exchange for
a
release of claims and a dismissal with prejudice of the lawsuit, the Company
agreed to certain additional corporate governance policies and to pay or have
its insurer pay the plaintiffs’ attorneys fees to be ordered by the Court up to
a maximum of $350,000.00. It is anticipated that the Company’s insurance carrier
will cover the entire settlement payment of plaintiff’s attorneys’
fees.
Additionally,
on August 8, 2008, the Company entered into a Memorandum of Understanding to
settle the consolidated securities lawsuit entitled In
Re: InfoSonics Corporation Securities Litigation,
Lead
Case No. 06 CV 1231, pending in the United States District Court for the
Southern District of California. This lawsuit is an alleged class action against
the Company and certain of its current and former officers and directors, filed
on behalf of a purported class of persons who purchased the Company’s securities
during a certain class period. The securities lawsuit relates to the Company’s
restatement of financial statements in early 2006 and claims relating to the
Company’s distribution of a former manufacturer’s cellular phone. The settlement
was entered into to avoid the expense and disruption of continued protracted
litigation and does not constitute an admission of liability by the Company
or
its current or former officers and directors. Specifically, the Company and
its
current and former officers and directors deny any liability or responsibility
for the claims made and make no admission of any wrongdoing. Under the
settlement, which is subject to preliminary and final Court approval and other
conditions, in exchange for a release of claims and a dismissal with prejudice
of the lawsuit, the Company agreed to pay or have its insurer pay the sum of
$3,800,000.00 (said sum to be inclusive of plaintiff’s attorneys’ fees, in an
amount to be ordered by the Court). It is anticipated that the Company’s
insurance will cover the entire settlement payment (including plaintiff’s
attorneys’ fees).
In
light
of these two settlements, which will be superceded by a more detailed
stipulation of settlement and which are subject to preliminary and final Court
approval and other conditions, the Company has settled all current litigation
arising out of or relating to the restatement of its first quarter 2006
financial statements.
A
copy of
the press release announcing the Company’s settlement of the securities and
derivative litigations is attached hereto as Exhibit 99.1 and is incorporated
by
reference herein.
Item
9.01 Financial Statements and Exhibits.
| Exhibit No. |
|
Description |
| |
|
|
| 10.1 |
|
Memorandum of Understanding for In
Re: InfoSonics Corporation Securities Litigation,
Lead
Case No. 06 CV 1231. |
|
|
|
|
| 10.2 |
|
Memorandum of Understanding for
In Re: InfoSonics Corporation Derivative Litigation,
Lead
Case No. 06 CV 1336. |
|
|
|
|
| 99.1 |
|
Press release dated August 12,
2008. |
SIGNATURE
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.
| |
|
|
| |
InfoSonics
Corporation
|
|
|
|
|
Date:
August 12, 2008
|
By: |
/s/
Jeffrey Klausner |
| |
Jeffrey
Klausner |
| |
Chief
Financial Officer
|
EXHIBIT
INDEX
| Exhibit No. |
|
Description |
| |
|
|
| 10.1 |
|
Memorandum of Understanding for In
Re: InfoSonics Corporation Securities Litigation,
Lead
Case No. 06 CV 1231. |
|
|
|
|
| 10.2 |
|
Memorandum of Understanding for
In Re: InfoSonics Corporation Derivative Litigation,
Lead
Case No. 06 CV 1336. |
|
|
|
|
| 99.1 |
|
Press release dated August 12,
2008. |