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): December 31, 2007
Home Solutions of America, Inc.
(Exact Name of Registrant as Specified in its Charter)
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| Delaware
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001-31711
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99-0273889 |
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(Commission File Number)
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(IRS Employer Identification No.) |
1500 Dragon Street, Suite B, Dallas, Texas 75207
(Address of Principal Executive Offices)
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Registrant’s Telephone Number, Including Area Code:
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(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
On December 31, 2007, Home Solutions of America, Inc (the “Company”) entered into Independent
Director Indemnification Agreements (the “Agreements”) for each of the Company’s four independent
members of the Board of Directors (the “Indemnitees”) as well as Executive Officer Indemnification
Agreements (also the “Agreements”) for the Company’s Chief Executive Officer and Chief Financial
Officer (also the “Indemnitees”). The Agreements supplement indemnification provided under the
Company’s Articles of Incorporation and By-laws or otherwise available. Copies of each of the
Agreements are attached to this report as exhibits and incorporated by reference herein.
The Agreements require the Company to indemnify and hold harmless the Indemnitees should they be
threatened by or made party to any Proceeding. As defined in the respective Agreements a
“Proceeding” means any threatened, pending or completed action, suit, claim, demand, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing, or any
other actual, threatened or completed proceeding, whether civil, criminal, administrative or
investigative, whether formal or informal, and each case whether or not commenced prior to the date
of the Agreement, in which the Indemnitee was, is or will be involved as a party or otherwise, by
reason of or relating to the Indemnitee’s position with the Company and by reason of or relating to
(i) any action or alleged action taken by the Indemnitee (or failure or alleged failure to act) or
of any action or alleged action (or failure or alleged failure to act) on the Indemnitee’s part,
while acting in such status or (ii) the fact that the Indemnitee is or was serving at the request
of the Company as a director, officer, employee, partner, member, manager, trustee, fiduciary or
agent of another entity, and in each case whether or not serving in such capacity at the time any
loss or expense is paid or incurred.
Further, the Company must advance any and all Expenses, in connection with any Proceeding.
Expenses include attorneys’ fees, disbursements and retainers, fees of experts, witness fees,
travel expenses and all other disbursements or expenses paid or incurred in connection with the
Proceeding, or in connection with enforcing the Indemnitee’s rights under the Agreement. The
Agreement requires the Company to advance to the Indemnitee, to the fullest extent permitted by
law, any and all Expenses actually and reasonably paid or incurred. If required by applicable law,
advances of Expenses will be made only upon delivery to the Company of an undertaking by the
Indemnitee to repay the Expenses if it is ultimately determined, by final decision by a court or
arbitrator, as applicable, from which there is no further right to appeal, that the Indemnitee is
not entitled to be indemnified for such expenses.
Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off Balance Sheet Arrangement.
On January 2, 2008, Home Solutions of America, Inc. (the “Company”) failed to make the required
quarterly installment to its bank lending group in the amount of $1,250,000. In addition, the
Company did not pay accrued interest totaling $885,074. As a result, the bank group has the right
to declare an event of default under the credit facility. The bank group has taken no such action
to date. The Company had previously agreed to terminate its credit facility and refinance all
existing amounts on or before December 31, 2007; and this has not occurred. The Company continues
in discussions with its bank lending group regarding the terms of an extension and amendments that
will address both the missed payment as well as the obligation to refinance the credit facility.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On November 9, 2007, the Company filed, on Form 12b-25, a Notification of Late Filing of its Form
10-Q for the quarter ended September 30, 2007. On November 14, 2007, the Company announced that it
would further delay the filing of the quarterly report past the extended filing deadline. The
delay in filing is due to a previously announced ongoing audit committee investigation into related
party transactions and other matters.
As previously reported, on November 15, 2007, the Company received a Nasdaq Staff Determination
indicating that its failure to timely file the quarterly report with the Securities and Exchange
Commission amounted to a failure to comply with a requirement under Nasdaq’s Marketplace Rule
4310(c)(14) for continued listing. The Company requested a hearing before a Nasdaq Listing
Qualifications Panel to appeal the Staff Determination and such hearing had been scheduled for
January 10, 2008.
The Company has withdrawn its appeal to remain listed on the Nasdaq National Market. Accordingly, the Company’s Common Stock will be delisted from the Nasdaq Stock Market effective
with the opening of trading on Monday, January 7, 2008.
A copy of the Company’s press release is attached.
FORWARD LOOKING STATEMENTS
This Current Report on Form 8-K, including Exhibit 99.1, 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, including Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(D) Exhibits.
| 4.1 |
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Independent Director Indemnification Agreement — Willard W. Kimbrell |
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Independent Director Indemnification Agreement — Charles P. McCusker |
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Independent Director Indemnification Agreement — Patrick A. McGeeney |
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Independent Director Indemnification Agreement — Michael S. Chadwick |
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Executive Officer Indemnification Agreement — Frank J. Fradella |
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Executive Officer Indemnification Agreement — Jeffrey M. Mattich |
99.1 Press Release dated January 4, 2008
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