<PAGE>
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 1934
Date of Report (Date of earliest event reported): October 24, 1997
Irvine Sensors Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-8402 33-0280334
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3001 Redhill Avenue
Costa Mesa, California 92626
(Address of principal executive offices, including Zip Code)
(714) 549-8211
(Registrant's telephone number, including area code)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On August 22, 1997 Irvine Sensors Corporation (the "Company") entered
into a Settlement Agreement (hereinafter the "Settlement") with International
Business Machines Corporation, a New York corporation ("IBM") to terminate the
amended Office, Manufacturing Facility, and Equipment Lease Agreement
(hereinafter the "Lease Agreement") executed on or about April 19, 1996. In
accordance with provisions of the Lease Agreement governing the termination of
the Lease Agreement, the Company, among other things, was required to quit and
surrender all premises leased under the Lease Agreement, cease all operations
under the Lease Agreement, remove all Company owned equipment, and clean and
restore all leased premises to their original condition.
In accordance with the provisions of the Settlement, the Company
ceased operations at the IBM facility and worked to restore the leased premises
to their original condition. As part of the process, the Company formed a plan
to dispose of all equipment acquired from IBM in April 1996 and other fixed
assets purchased and/or constructed at the IBM facility. These assets had a net
book value approximating $7.5 million. Approximately $7.0 million of the
equipment was disposed of in a public auction, the proceeds of which
approximated $1.1 million. The transaction resulted in a loss on disposal
approximating $5.9 million during the fourth quarter of fiscal year ended
September 28, 1997. The proceeds of the disposition were used to reduce the
principal of a loan collateralized by the equipment, and the Company is
currently negotiating with the lender regarding retirement, restructuring, or
refunding of the approximately $1.7 million balance of the loan. There can be
no assurances as to the outcome of these negotiations.
The remaining assets with a net book value approximating $500,000
located at the Company's other Vermont facility are being utilized to complete
work under an existing contract. The Company is investigating the transfer and
utilization of the remaining assets for future production at its Costa Mesa
facility.
The public auction of assets was performed by Advanced Asset Services,
Inc. during September 1997. The settlement of the auction, the related
proceeds, and the removal and restoration of the facility was completed on
October 24, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
Date: November 3, 1997
IRVINE SENSORS CORPORATION
By: /s/ John J. Stuart, Jr.
------------------------
John J. Stuart, Jr.
Vice President and
Chief Financial Officer
