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 1934
December 23, 2005
SENSOR SYSTEM SOLUTIONS, INC.
(Exact Name of Registrant as Specified in Charter)
Nevada 0-024828 98-0226032
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
45 Parker Avenue, Suite A, Irvine, California 92618
(Address of principal executive offices) (Zip code)
(949) 855-6688
Registrant's telephone number, including area code:
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:
|_| 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))
Item 1.01 Entry into a Material Definitive Agreement.
On December 23, 2005, Sensor System Solutions, Inc. (the "Company"),
entered into a Securities Purchase Agreement with Cornell Capital Partners, LP
("Cornell" and together with the Company, the "Parties"), pursuant to which the
Company issued to Cornell secured convertible debentures in the principal amount
of $1,000,000 (the "Convertible Debentures"), $800,000 of which has been funded
as of December 28, 2005 and $200,000 of which shall be funded two (2) business
days prior to the date a registration statement is filed with the United States
Securities and Exchange Commission. The Convertible Debentures are convertible
into shares of the Company's common stock, par value $0.01 ("Common Stock")
The Convertible Debentures are secured by substantially all of the
Company's assets, have a one (1) year term and accrue interest at ten percent
(10%) per annum. Cornell is entitled, at its option, to convert, and sell all or
any part of the principal amount of the Convertible Debentures, plus any and all
accrued interest, into shares of Common Stock, at a price equal to the lesser of
(i) $0.35 or (ii) ninety percent (90%) of the lowest volume weighted average
price of the Common Stock during the fifteen (15) trading days immediately
preceding the date of conversion as quoted by Bloomberg, LP.
The Company may redeem, with three (3) business days advance written
notice to Cornell, a portion or all amounts outstanding under the Convertible
Debentures prior to the maturity date provided that the closing bid price of the
Common Stock, as reported by Bloomberg, LP, is less than $0.35 at the time of
the redemption notice. The Company shall pay an amount equal to the principal
amount being redeemed plus a redemption premium equal to twenty percent (20%) of
the principal amount being redeemed, plus accrued interest, to be delivered to
Cornell on the third (3rd) business day after the redemption notice.
In the event the Company exercises its right to redeem all or a portion
of the outstanding principal amounts plus accrued interest due and outstanding
under the Convertible Debentures, Cornell shall also be entitled to receive a
warrant to purchase 100,000 shares of Common Stock for every $100,000 redeemed,
on a pro rata basis. The warrant shall be exercisable on a "cash basis" and have
an exercise price equal to $0.35 in effect at the time of issuance. The warrant
shall have "piggy-back" and demand registration rights and shall terminate after
the five (5) year anniversary of December 23, 2005.
On December 23, 2005, the Company issued to Cornell a warrant to
purchase up to 600,000 shares of Common Stock. This warrant has an exercise
price of $0.2878 and shall terminate after the five (5) year anniversary of the
date of issuance.
Item 1.02 Termination of a Material Definitive Agreement.
On December 23, 2005, the Company entered into a Termination Agreement
with Cornell, pursuant to which the Parties terminated that certain Standby
Equity Distribution Agreement, that certain Registration Rights Agreement, and
that certain Placement Agent Agreement, each dated as of October 6, 2005. The
Company previously issued to Cornell 1,472,429 shares of Common Stock in
connection with the Standby Equity Distribution Agreement and 28,571 shares of
Common Stock to Monitor Capital, Inc. in connection with the Placement Agent
Agreement (collectively, the "Issued Shares"). The Issued Shares have not been
cancelled and have piggy-back registration rights.
Item 3.02. Unregistered Sales of Equity Securities.
See Item 1.01 above.
Item 9.01. Financial Statements and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibit No. Description
Exhibit Description Location
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Exhibit Securities Purchase Agreement, dated as of December 23, 2005, by and Provided herewith
10.1 between Sensor System Solutions, Inc. and Cornell Capital Partners, LP
Exhibit Investor Registration Rights Agreement dated as of December 23, 2005, by Provided herewith
10.2 and between Sensor System Solutions, Inc. and Cornell Capital Partners, LP
Exhibit Secured Convertible Debenture, dated as of December 23, 2005, issued to Provided herewith
10.3 Cornell Capital Partners, LP
Exhibit Security Agreement dated as of December 23, 2005, by and between Sensor Provided herewith
10.4 System Solutions, Inc. and Cornell Capital Partners, LP
Exhibit Warrant, dated as of December 23, 2005, issued to Cornell Capital Partners, LP Provided herewith
10.5
Exhibit Insider Pledge and Escrow Agreement, dated as of December 23, 2005, by and Provide herewith
10.6 among Sensor System Solutions, Inc., Cornell Capital Partners, LP and David
Gonzalez, Esq.
Exhibit Escrow Agreement dated December 23, 2005 among Sensor System Solutions, Provided herewith
10.7 Inc., Cornell Capital Partners, LP and David Gonzalez, Esq.
Exhibit Irrevocable Transfer Agent Instructions, dated as of December 23, 2005, by Provided herewith
10.8 and between Sensor System Solutions, Inc. and Cornell Capital Partners, LP
Exhibit Termination Agreement dated as of December 23, 2005, by and between Provided herewith
10.9 Sensor System Solutions, Inc., Cornell Capital Partners, LP and Monitor
Capital Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: December 29, 2005 SENSOR SYSTEM SOLUTIONS, INC.
By: /s/ Michael Young
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Name: Michael Young
Title: Chief Executive Officer
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