SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) February 14, 1997
PEN INTERCONNECT, INC.
(Exact name of registrant as specified in its charter)
Utah 1-14072 87-0430260
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
2351 South 2300 West, Salt Lake City, Utah 84119
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (801) 973-6090
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Item 5. Other Matters
On November 12, 1996, the registrant sold all of the net assets used in
its San Jose Division (the "Division") to Touche Electronics, Inc. ("Touche"), a
subsidiary of TMCI Electronics, Inc. ("TMCI"), in a transaction described in the
registrant's 8-K dated November 12, 1996. Touche and TMCI, as comakers,
delivered two promissory notes (the "Notes") to the registrant in the principal
amounts of $400,000 ("$400,000 Note") and $500,000 ("$500,000 Note")
respectively, as payment of a portion of the purchase price for the Division.
TMCI and Touche were required to make the first payment under the Notes on
December 1, 1996, and to make monthly payments, thereafter, on the first day of
each calendar month until November 1, 1998, when all unpaid portions of the
$400,000 Note were due and payable and until October 31, 1999, when all unpaid
portions of the $500,000 Note were due and payable.
TMCI and Touche have failed to make any payments under the Notes. The
registrant has repeatedly made demand for payment on the Notes, and has given
notice to TMCI and Touche that it has exercised its right to accelerate the
Notes.
On February 14, 1997, Touche and TMCI filed a demand for arbitration in
California alleging that, in connection with its sale of the Division, (i) the
registrant overstated the value of the Division's inventory, (ii) the Division's
vendors have refused to deal with Touche and TMCI, and (iii) the registrant
failed to disclose certain accounts payable. The registrant is vigorously
contesting those allegations in the arbitration.
On April 8, 1997, the registrant filed a complaint against TMCI, Touche
and certain individuals in the Superior Court of the State of California, in and
for the County of Santa Clara, with respect to the defaulted Notes (the
"Complaint"). In the Complaint, the registrant made claims against TMCI, Touche
and the other defendants for, among other things, breach of contract, fraud,
conversion and claim and delivery. The registrant has also filed motions in the
Suit for writs of attachment and possession and has requested an order allowing
the registrant to attach the equipment and other assets acquired by TMCI and
Touche in the sale of the Division. Hearings on those motions are set for May
29, 1997.
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 thereunto duly authorized.
PEN INTERCONNECT, INC.
(registrant)
May 5, 1997 BY: /s/ James S. Pendleton
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(Date) JAMES S. PENDLETON
CHIEF EXECUTIVE OFFICER
