file8k102708.htm
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934.
Date
of Report (Date of Earliest
Event Reported):
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October
27, 2008
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ISCO
INTERNATIONAL, INC.
(Exact
Name of Registrant as Specified in
Charter)
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DELAWARE
(State
or Other Jurisdiction of Incorporation or Organization)
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001-22302
(Commission
File Number)
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36-3688459
(I.R.S.
Employer Identification Number)
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1001
Cambridge Drive, Elk Grove Village, ILLINOIS
(Address
of Principal Executive Offices)
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60007
(Zip
Code)
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847-391-9400
(Registrant’s
Telephone Number, Including Area
Code)
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Not
Applicable
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(Former
Name or Former Address, if changed since last
report)
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Check
the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[ ]
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Written
communications pursuant to Rule 425 under the Securities
Act
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act
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Item
2.05 Costs Associated with Exit or Disposal Activities
On
October 27, 2008, ISCO International, Inc.’s (the “Company”) management took
action to reduce the monthly cash expenditure associated with Clarity
Communication Systems Inc. (“Clarity”), its software business unit, by reducing
headcount under a plan of termination pursuant to which charges will be incurred
under FASB Statement of Financial Accounting Standards No. 146 "Accounting For
Costs Associated With Exit or Disposal Activities." The headcount
reductions are effective immediately and will result in a charge for one time
termination benefits of approximately $75,000. As strategic options
continue to be evaluated, a retention program has been provided for the
remaining employees. The costs associated with this retention program
are estimated at $100,000. In addition, approximately 1.1 million shares of the
Company’s stock will vest immediately. These shares were granted in
January 2008 as part of the acquisition of Clarity. The vesting is accelerated
due to the headcount reductions. The vesting of these shares will result
in a non-cash charge of approximately $ 75,000.
Management’s
decision was driven by the amount of capital required to achieve cash flow
breakeven operations at Clarity, the inability to obtain new operating capital
in the current financial market environment and the lack of sufficient capital
available to operate both the Company’s hardware and software segments
adequately. The Company remains fully committed to the hardware
business and believes that the full or partial exit from the software business
will allow management to focus its efforts and resources on the success of the
hardware business.
At this
time, the Company is unable to estimate the amount or range of amounts of the
charges it may incur in connection with a strategic transaction or shutdown of
operations and liquidation of Clarity. The Company shall file an amended Current
Report on Form 8-K/A under Item 2.05 within four business days after it makes a
determination of such an estimate or range of estimates.
This
report contains forward-looking information within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 that are subject to a variety of risks and uncertainties that may cause
actual results to differ materially from those projected or suggested. The
Company intends such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in such sections. These
statements are based on current estimates and actual results may differ
materially due to risks, including those risks set forth in the Company’s
filings with the SEC, including its most recent Form 10-Q, 10-K, 10-K/A and
other filings that are available through EDGAR at www.sec.gov. Readers are
cautioned not to place undue reliance on these forward-looking statements that
speak only as of the date these statements were made. The Company assumes no
obligation to update the forward-looking statements contained
herein.
SIGNATURES
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.
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ISCO
INTERNATIONAL,
INC.
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Date: October
27, 2008
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By:
/s/ Gary
Berger
Gary Berger
Chief Financial
Officer
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