-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AyRdoVno63OzCzpHx6U1k8BubcJG0X9HZZycyTNiIy1TO4SMLS6xOoFEt3tIZSbn OyxZA29d9ETn8ksUoHWHNw== 0001019687-03-001867.txt : 20030909 0001019687-03-001867.hdr.sgml : 20030909 20030909165551 ACCESSION NUMBER: 0001019687-03-001867 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20030827 ITEM INFORMATION: ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030909 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SSP SOLUTIONS INC CENTRAL INDEX KEY: 0001078717 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 330757190 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26227 FILM NUMBER: 03888438 BUSINESS ADDRESS: STREET 1: 17861 CARTWRIGHT ROAD CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 9498511085 MAIL ADDRESS: STREET 1: 17861 CARTWRIGHT ROAD CITY: IRVINE STATE: CA ZIP: 92614 FORMER COMPANY: FORMER CONFORMED NAME: LITRONIC INC DATE OF NAME CHANGE: 19990208 8-K 1 ssp_8k-090903.txt 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) August 27, 2003 --------------------------- SSP SOLUTIONS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 000-26227 33-0757190 -------- --------- ---------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 17861 CARTWRIGHT ROAD, IRVINE, CALIFORNIA 92614 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (949) 851-1085 ------------------------------ NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE. Nasdaq Listing - -------------- On August 27, 2003, SSP Solutions, Inc. ("Company") issued a press release discussing the status of its Nasdaq listing. The full text of the press release is attached as Exhibit 99.1 and incorporated by reference into this Form 8-K. Settlement of Lease Obligations - ------------------------------- On September 3, 2003, the Company issued a press release discussing the settlement of certain real property lease obligations as of August 29, 2003. The full text of the press release is attached as Exhibit 99.3 and incorporated by reference into this Form 8-K. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. Not applicable. (b) PRO FORMA FINANCIAL INFORMATION. Not applicable. (c) EXHIBITS. Exhibit Number Description ------ ----------- 99.1 Press release dated August 27, 2003 relating to status of Nasdaq listing 99.2 Press release dated September 2, 2003 relating to results of operations and financial condition 99.3 Press release dated September 3, 2003 relating to lease termination 99.4 Agreement of Settlement on Stipulated Judgment dated August 29, 2003 between SSP Solutions, Inc. and Research Venture, LLC 99.5 Lease Surrender and Termination Agreement dated August 29, 2003 between SSP Solutions, Inc. and Research Venture, LLC 99.6 Amended Stipulation for Entry of Judgment dated August 29, 2003 between SSP Solutions, Inc. and Research Venture, LLC ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On September 2, 2003, the Company issued a press release discussing its results of operations for the second quarter of 2003. A copy of the press release is provided with this report as Exhibit 99.2 and incorporated by reference into this Item 12. The information contained or incorporated by reference in this Item 12 is being "furnished to" the SEC in accordance with SEC Release Nos. 33-8216 and 34-47226 and shall not be deemed "filed with" the SEC for purposes of Section 18 of the Securities Exchange of 1934, as amended, or otherwise subject to the liabilities of that section. The information contained or incorporated by reference in this Item 12 shall not be deemed incorporated by reference into any registration statement, proxy statement or other report except as shall be expressly set forth by specific reference in such filing and regardless of any general incorporation language in such filing. 2 SIGNATURE 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. Date: September 8, 2003 SSP SOLUTIONS, INC. By: /s/ THOMAS E. SCHIFF -------------------------------------- Thomas E. Schiff, Chief Financial Officer 3 EXHIBITS FILED WITH THIS REPORT Exh. No. Description -------- ----------- 99.1 Press release dated August 27, 2003 relating to status of Nasdaq listing 99.2 Press release dated September 2, 2003 relating to results of operations and financial condition 99.3 Press release dated September 3, 2003 relating to lease termination 99.4 Agreement of Settlement on Stipulated Judgment dated August 29, 2003 between SSP Solutions, Inc. and Research Venture, LLC 99.5 Lease Surrender and Termination Agreement dated August 29, 2003 between SSP Solutions, Inc. and Research Venture, LLC 99.6 Amended Stipulation for Entry of Judgment dated August 29, 2003 between SSP Solutions, Inc. and Research Venture, LLC 4 EX-99.1 3 ssp_8kex99-1.txt EXHIBIT 99.1 Press Release Source: SSP Solutions Inc. SSP Solutions Announces Nasdaq Staff Listing Determination Wednesday August 27, 8:13 pm ET Addition of New Independent Director Planned IRVINE, Calif.--(BUSINESS WIRE)--Aug. 27, 2003--SSP Solutions Inc. (Nasdaq:SSPX - - News) a leading provider of identity and information assurance products and services today announced that the Company received a Nasdaq Staff Determination on August 20, 2003 indicating that the Company failed to comply with Nasdaq's independent director and audit committee composition requirements, as set forth in Nasdaq MarketPlace Rules 4350(c) and 4350(d)(2)(A), and that its securities are, therefore, subject to delisting from The Nasdaq National Market. The Company has submitted a written response to the staff determination outlining the Company's current plans for compliance with independent director requirements through the appointment of directors from an investment group that is in the process of funding a new financial package. The Company is awaiting further determination from the Nasdaq Listing Qualifications Panel. There can be no assurance the Panel will grant the Company's request for continued listing. Further, the quantitative listing standards of The Nasdaq National Market require, among other things, that listed companies maintain a minimum bid price of $1.00. In November 2002, we received a notice from Nasdaq indicating that our common stock had failed to maintain the required minimum bid price of $1.00 for the last 30 consecutive trading days and that, therefore, we had until February 20, 2003 to regain compliance with that requirement. We did not timely regain compliance with that requirement. In March 2003, we received a notice from Nasdaq that the period to regain compliance with the $1.00 minimum bid price had been extended an additional 90 days, through May 21, 2003. On May 22, 2003, we received a Nasdaq staff determination that we failed to timely regain compliance with the minimum bid price requirement and that our stock was subject to delisting. We appealed the staff's determination to a listing qualifications panel for consideration. On August 14, 2003, we received the findings of the panel, which allowed us through October 31, 2003 to evidence a closing bid price of at least $1.00 per share for 10 consecutive trading days for any time period prior to October 31, 2003 thereby meeting Nasdaq's minimum bid requirement for continued Nasdaq National Market listing. Should the bid price of the Company's stock not meet the minimum requirement by October 31, 2003, the extended time period would give us time to implement a reverse stock split, should we decide it was necessary to do so, with the requirement to have a closing bid price immediately thereafter of at least $1.00 per share. If we do not timely regain compliance with the bid price requirements, whether through a reverse stock split (which we are considering, but have not made a decision about) or otherwise, we may be permitted to submit an application to transfer the listing of our common stock to The Nasdaq SmallCap Market if we satisfy the continued inclusion requirements for The Nasdaq SmallCap Market, including the independent director and audit committee composition requirements described above. The successful transfer of the listing of our common stock to The Nasdaq SmallCap Market would make available an extended grace period for the minimum $1.00 bid price requirement and would make available an additional 180 calendar day grace period if we meet the initial listing criteria for The Nasdaq SmallCap Market. About SSP Solutions Inc. SSP Solutions Inc. and SSP-Litronic design and develop innovative data and communication security solutions for both corporate and government institutions. Our solutions meet the performance and security requirements of today's demanding PKI based Information Assurance based environments. We provide network security, desktop protection, and high assurance messaging systems for many organizations of the U.S. Government. For more information, visit http://www.sspsolutions.com/ or call SSP Solutions Inc. (949) 851-1085 or SSP-Litronic (703) 905-9700. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 With the exception of historical information, matters discussed in this news release, including in particular, the reference to the possibility that we may be permitted to transfer our listing to The Nasdaq SmallCap Market and/or obtain an extended grace period for regaining compliance with minimum bid price requirements, are forward-looking statements involving a number of risks and uncertainties and may not be achieved due to factors beyond our control, including any future changes in Nasdaq rules and requirements or their application to our listing, and any additional deficiencies that may arise in the future with regard to our compliance with Nasdaq rules and requirements. Other risks inherent in our business are described in Securities and Exchange Commission filings. SSP Solutions, Inc. undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this release. _______________________ Contact: SSP Solutions, Inc. Editorial Contact: Press Relations, 949-851-1085 pr@sspsolutions.com or Investor Contact: Thomas E. Schiff, 949-851-1085 tom.schiff@sspsolutions.com EX-99.2 4 ssp_8kex99-2.txt EXHIBIT 99.2 Press Release Source: SSP Solutions, Inc. SSP Solutions, Inc. Announces Second Quarter Operating Results Tuesday September 2, 9:05 am ET Revenues Increase 64.5% and Gross Margin Dollars Up by 89.9% IRVINE, Calif.--(BUSINESS WIRE)--Sept. 2, 2003--SSP Solutions, Inc. (Nasdaq: SSPX - News), long-term provider of identity management solutions for corporate and government institutions, today announced financial results for the second quarter ended June 30, 2003. The Company reported total revenues of $3.8 million for the second quarter ended June 30, 2003, versus $2.3 million in the same quarter last year, or a 64.5% increase; six month period revenues increased from $4.1 million to $7.1 million, or 75.8%. Gross margin dollars increased from $1.6 million to $3.0 million, an 89.9% increase for the quarter ended June 30, 2003 and from $2.5 million to $5.3 million, a 107.5% increase for the six month period then ended. The Company reported an operating loss of $608,000 for the quarter ended June 30, 2003, versus an operating loss of $2.8 million in 2002. Included in the 2003 operating loss was an accrual of $1.3 million for a pending final settlement and termination related to a restructured facility lease. Excluding the settlement charge, the Company's pro-forma, non-GAAP operating income would have been $692,000 and $240,000 for the three and six months ended June 30, 2003, respectively, versus operating losses of $2.8 million and $6.4 million for the three and six months ended June 30, 2002. With the Company's previously announced discontinuance of its network solutions business and a $1.3 million settlement charge, the net loss from continuing operations for the quarter was $1.8 million or $0.07 per basic and diluted share, versus a loss from continuing operations of $3.6 million, or $0.18 per basic and diluted share, in the same quarter of 2002. The net loss for the quarter ended June 30, 2003, was $1.8 million, or $.07 per basic and diluted share, versus a net loss of $3.7 million, or $0.18 per basic and diluted share, in the same quarter last year. The Company's pro-forma, non-GAAP net loss, excluding the $1.3 million facility settlement charge, would have been $3.7 million for the quarter ended June 30, 2002 and $521,000 million for the quarter ended June 30, 2003. The Company's pro-forma, non-GAAP net loss per share, excluding the facility settlement charge, would have been $.18 per share for the quarter ended June 30, 2002 and $.02 per share for the quarter ended June 30, 2003. Service revenues increased 380.7% from $457,000 to $2.2 million, and license revenues decreased by 36% from $623,000 to $399,000 for the quarter ended June 30 2003 versus the same quarter in 2002. Product sales decreased .9% to $1.24 million from $1.25 million during the quarters ended June 30, 2003 and June 30, 2002, respectively. The total gross margin percentage increased to 78.6% for the quarter ended June 30, 2003 from 68.1% during the same quarter in 2002. The Company reduced operating expenses by $728,000 or 16.7%. This reduction included a $466,000 or 33.0% reduction in research and development expenses (R&D); a $594,000 or 28.5% increase in selling, general, and administrative expenses (S,G&A); and the elimination of the Wave Systems development contract. For the quarter ended June 30, 2003, S,G&A included the $1.3 million facility settlement charge. The Company eliminated $833,000 in quarterly R&D expenses through the previously reported termination and settlement effective August 31, 2002 of the Wave development contract. Without the $1.3 million settlement charge, non-GAAP proforma total operating expenses would have decreased by $2.0 million, or 46.6% to $2.3 million with S,G&A expenses decreasing $706,000, or 33.9% to $1.4 million for the quarter ended June 30, 2003. With the Company's previously announced discontinuance of its network solutions business and including the $1.3 million settlement charge, the net loss from continuing operations for the six months ended June 30, 2003 was $3.3 million or $0.13 per basic and diluted share, versus a loss from continuing operations of $7.4 million, or $0.35 per basic and diluted share, in the same quarter of 2002. The net loss for the six months ended June 30, 2003, was $3.4 million, or $.14 per basic and diluted share, versus a net loss of $7.7 million, or $0.37 per basic and diluted share, in the same quarter last year. The Company's pro-forma, non-GAAP net loss, excluding the $1.3 million facility settlement charge, would have been $7.7 million for the six month period ended June 30, 2002 and $2.1 million for the quarter ended June 30, 2003. The Company's pro-forma, non-GAAP net loss per share, excluding the facility settlement charge, would have been $.37 per share for the six month period ended June 30, 2002 and $.09 per s hare for the six month period ended June 30, 2003. For the six month period ended June 30, 2003, service revenues increased 227.8% from $994,000 to $3.3 million, and license revenues increased by 116.3% from $743,000 to $1.6 million for the six month period ended June 30 2003 versus the same six month period in 2002. Product sales decreased 2.2% to $2.27 million from $2.32 million during the six month periods ended June 30, 2003 and June 30, 2002, respectively. The total gross margin percentage increased to 73.6% for the six month period ended June 30, 2003 from 62.3% during the same six month period in 2002. The Company reduced operating expenses by $2.6 million or 29.2%. This reduction included a $962,000 or 31.5% reduction in R&D; a $75,000 or 1.8% increase in S,G&A; and the elimination of the Wave Systems development contract. The Company eliminated $1.7 million in the six month period R&D through the previously reported termination and settlement effective August 31, 2002 of the Wave development contract. Without the $1.3 million settlement charge, non-GAAP proforma total operating expenses would have decreased by $3.9 million, or 43.8% to $5.0 million with S,G&A expenses decreasing $1.2 million, or 29.5% to $2.9 million for the six month period ended June 30, 2003. "We are pleased with our revenue growth, margin improvement, and operating cost reductions," commented Marvin J. Winkler, co-chairman and CEO. "With our improved operating results and the pending facility settlement, we are now in the process of restructuring our balance sheet and raising equity capital that will dramatically decrease future financing costs and create positive working capital." The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States ("GAAP"), but has included non-GAAP disclosures. The Company believes the presentation of these non-GAAP financial measures provides useful information to investors because excluding the effects of these non-recurring items allows investors to more easily compare the Company's financial performance from period to period. These non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. Further, these non-GAAP financial measures may differ from similar measures presented by other companies. About SSP Solutions, Inc. SSP Solutions, Inc. designs and develops innovative identity management solutions for corporate and government institutions. Our PKI solutions streamline the deployment, use, and management of digital identities across an organization, delivering strong authentication and access control. For more information, visit http://www.sspsolutions.com/ or call SSP Solutions, Inc. at 949-851-1085. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 With the exception of historical information, matters discussed in this news release, including, in particular, those related to a pending final settlement and termination of a facility lease, balance sheet restructuring, raising equity capital, and creating positive working capital are forward-looking statements involving a number of risks and uncertainties and may not be achieved due to factors beyond the Company's control. The Company's actual future results could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, changing regulatory and technological environments, difficulties in the Company's ability to obtain key components from suppliers, which could impair the Company's ability to deliver products under development in a timely fashion and to achieve revenue growth and continue technological innovation, difficulties in increasing revenue despite staff reductions needed to control costs, unpredictability of economic recovery from th e heretofore depressed IT markets and the related effect on IT buying decisions, difficulties we may encounter in obtaining needed capital, which include the converting of existing debt into equity, the exercise of existing warrants and the cost of obtaining additional capital, unforeseen technological difficulties (both for the Company and its suppliers), increased competition, and changing customer demands. Other risks inherent in the Company's business include those factors contained in the "Risk Factors" section of the Company's Form 10-K for the fiscal year ended December 31, 2002 and Form 10-QSB for the quarter ended June 30, 2003. SSP Solutions, Inc. undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this release. SSP Solutions, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2002 2003 2002 2003 Revenues: Product $1,255 $1,244 $2,325 $2,274 Service 457 2,197 994 3,258 License 623 399 743 1,607 Total revenues 2,335 3,840 4,062 7,139 Cost of Sales: Product 567 340 1,069 637 Service 136 471 365 441 License 43 12 96 807 Total cost of sales 746 823 1,530 1,885 Gross margin 1,589 3,017 2,532 5,254 Operating Expenses: Selling, general and administrative 2,084 2,678 4,150 4,225 Research and development 1,413 947 3,051 2,089 Research and development -- Wave Systems Corp. 833 -- 1,667 -- Amortization of goodwill and other intangibles 23 -- 46 -- Total operating expenses 4,353 3,625 8,914 6,314 Operating income (loss) (2,764) (608) (6,382) (1,060) Non-operating Expenses (Income): Unrealized loss on trading securities 121 10 122 25 Interest expense, net 189 313 315 590 Non-cash interest and financing expense 368 611 368 1,111 Loss from equity investee -- 140 -- 409 Impairment of equity investee -- 142 -- 142 Other expense, net 174 (6) 187 (6) Total non-operating expenses 852 1,210 992 2,271 Loss before income taxes (3,616) (1,818) (7,374) (3,331) Provision for (benefit from) income taxes (2) 3 2 3 Loss from continuing operations (3,614) (1,821) (7,376) (3,334) Loss from discontinued operations (99) -- (363) (106) Net Loss $(3,713) $(1,821) $(7,739) $(3,440) Loss per share of common stock, basic and diluted $(0.18) $(0.07) $(0.37) $(0.14) Loss per share from continuing operations $(0.18) $(0.07) $(0.35) $(0.13) Loss per share from discontinued operations $(0.00) $(0.00) $(0.02) $(0.01) Shares used in per share computations 20,678 25,169 20,671 25,174 SSP SOLUTIONS, INC. Pro Forma Summary of Non-GAAP Adjustments To Condensed Consolidated Statements of Operations (In thousands) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2002 2003 2002 2003 Net loss $(3,713) $(1,821) $(7,739) $(3,440) Plus loss from discontinued operation (99) -- (363) (106) Plus loss from continuing operations (3,614) (1,821) (7,376) (3,334) Plus provision (benefit) for income taxes (2) 3 2 3 Operating loss before income taxes (3,616) (1,818) (7,374) (3,331) Plus non operating expenses 852 1,210 992 2,271 Operating loss (2,764) (608) (6,382) (1,060) Less facility lease settlement charge -- 1,300 -- 1,300 Non-GAAP, pro-forma operating income (loss), net of facility settlement charge $(2,764) $692 $(6,382) $240 Total operating expenses $4,353 $3,625 $8,914 $6,314 Less facility lease settlement charge -- 1,300 -- 1,300 Non-GAAP, pro-forma total operating expenses, net of facility settlement charge $ 4,353 $ 2,325 $ 8,914 $ 5,014 Selling, general and administrative expenses $2,084 $2,678 $4,150 $4,225 Less facility lease settlement charge -- 1,300 -- 1,300 Non-GAAP, pro-forma selling, general and administrative expenses, net of facility settlement charge $ 2,084 $ 1,378 $ 4,150 $ 2,925 Net loss $(3,713) $(1,821) $(7,739) $(3,440) Less facility lease settlement charge -- 1,300 -- 1,300 Non-GAAP, pro-forma net income (loss), net of facility settlement charge $(3,713) $(521) $(7,739) $(2,140) Non-GAAP, pro-forma net income (loss) per share, net of facility settlement charge $(0.18) $(0.02) $(0.37) $(0.09) SSP Solutions, Inc. Condensed Consolidated Balance Sheets (In thousands) Dec. 31, June 30, 2002 2003 (Unaudited) Total Current Assets $2,905 $3,426 Property, Plant & Equipment, Net 90 57 Other Assets 599 499 Equity investment in affiliate 452 -- Goodwill 25,930 25,930 Total Assets $29,976 $29,912 Total Current Liabilities $8,853 $11,510 Long-Term Debt -- -- Shareholders' Equity 21,123 18,402 Total Liabilities & Shareholders' Equity $29,976 $29,912 _______________________ Contact: SSP-Litronic (Editorial Contact) Press Relations, 949-851-1085 pr@sspsolutions.com or SSP Solutions, Inc. (Investor Contact) Thomas E. Schiff, 949-851-1085 tom.schiff@sspsolutions.com EX-99.3 5 ssp_8kex99-3.txt EXHIBIT 99.3 Press Release Source: SSP Solutions, Inc. SSP Solutions Announces Lease Termination Agreement Wednesday September 3, 9:25 am ET Eliminates $5.3 Million in Future Lease Obligation IRVINE, Calif.--(BUSINESS WIRE)--Sept. 3, 2003--SSP Solutions, Inc. (Nasdaq:SSPX - - News), a leading provider of identity and information assurance products and services, today announced it has reached an agreement with Research Venture, LLC for the termination of a lease of real property located in the Irvine Spectrum in Southern California in exchange for the payment of $865,000 in cash and the issuance of 414,450 shares of SSP common stock. By completing this agreement, SSP has eliminated further liability for future rent payments of approximately $5.3 million, plus related common area costs for the same time period. The terminated lease would otherwise have continued through the seven year lease term ending January 16, 2009. Under the agreement, SSP must complete a previously filed registration statement for the resale of 1,056,242 shares previously issued to Research Venture. The Company must also file, on or before November 30, 2003, a registration statement for 414,450 new shares issued pursuant to the agreement. If the registration statements are suspended prior to the shares being sold or qualifying for sale under Rule 144, the company could be obligated to repurchase unsold shares from Research Venture at prearranged prices. To date, SSP has made payments to Research Venture under the lease and in termination of the lease in the aggregate amount of $1.3 million. "With this settlement in place, we can resume our focus on restructuring our balance sheet and growing our company," commented Marvin J. Winkler, co-chairman and CEO. "We are happy to have this matter behind us." About SSP Solutions, Inc. SSP Solutions, Inc. designs and develops innovative identity management solutions for corporate and government institutions. Our solutions streamline the deployment, use, and management of digital identities across an organization, delivering strong authentication and access control. For more information, visit http://www.sspsolutions.com/ or call SSP Solutions, Inc. 949-851-1085. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 With the exception of historical information, matters discussed in this news release are forward-looking statements involving a number of risks and uncertainties and may not be achieved due to factors beyond our control. Risks inherent in our business are described in Securities and Exchange Commission filings. SSP Solutions, Inc. undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this release. _____________________ Contact: SSP-Litronic (Editorial Contact) Press Relations, 949-851-1085 pr@sspsolutions.com or SSP Solutions, Inc. (Investor Contact) Thomas E. Schiff, 949-851-1085 tom.schiff@sspsolutions.com EX-99.4 6 ssp_8kex99-4.txt EXHIBIT 99.4 AGREEMENT OF SETTLEMENT ON STIPULATED JUDGMENT ---------------------------------------------- This Agreement of Settlement on Stipulated Judgment ("Agreement") is made and entered into this 29th day of August, 2003 ("Effective Date"), by and between RESEARCH VENTURE, LLC (hereinafter "Research" or "Plaintiff"), on the one hand, and SSP SOLUTIONS, INC. (hereinafter "SSP" or "Defendant"), on the other hand. RECITALS: --------- 1. On or about October 23, 2002, Research and SSP entered into that certain STIPULATION FOR ENTRY OF JUDGMENT ("Stipulation") in the case styled RESEARCH VENTURE, LLC V. SSP SOLUTIONS, INC., ET AL, in the Orange County Superior Court bearing Case No. 02CC10109 (consolidated with Case No. 02CC10111)(the "Action"). On December 18, 2002, SSP filed a registration statement on Form S-3 (the "Registration Statement" with the Securities and Exchange Commission (the "SEC") covering the resale of the Old Shares (as hereinafter defined). 2. Pursuant to the Stipulation, on or about August 11, 2003, the Court entered Judgment in the Action in favor of Research against SSP (the "Judgment"). 3. The parties hereto, in entering into this Agreement, desire to resolve any and all issues between them, including, but not limited to, any issues with respect to the Judgment, except such rights, obligations, duties and/or liabilities as may be created by this Agreement. NOW, THEREFORE, in furtherance of the Recitals above, and pursuant to the terms, covenants and conditions hereinafter, the parties agree as follows: 1 AGREEMENT: ---------- 1. On or before 2:00 p.m. Eastern Standard Time, Friday, August 29, 2003, SSP shall deliver to Research the following (the "August 29th Deliveries"): (a) 1,056,242 shares of common stock of SSP ("Old Shares), which shall be duly authorized, validly issued, fully paid and nonassessable. The Old Shares are represented by the following stock certificates, delivery of which is hereby acknowledged by Research: - ----------------------------------------- -------------------------------- CERTIFICATE NUMBER NUMBER OF SHARES - ----------------------------------------- -------------------------------- S0107 959,323 - ----------------------------------------- -------------------------------- S0119 4,615 - ----------------------------------------- -------------------------------- S0118 11,538 - ----------------------------------------- -------------------------------- S0140 11,538 - ----------------------------------------- -------------------------------- S0144 11,538 - ----------------------------------------- -------------------------------- S0152 11,538 - ----------------------------------------- -------------------------------- S0163 11,538 - ----------------------------------------- -------------------------------- S0167 11,538 - ----------------------------------------- -------------------------------- S0169 11,538 - ----------------------------------------- -------------------------------- S0181 11,538 - ----------------------------------------- -------------------------------- TOTAL: 1,056,242 - ----------------------------------------- -------------------------------- (b) The sum of $865,000.00, delivered by wire transfer in immediately available United States funds, in accordance with the instructions attached hereto marked as Exhibit "A". (c) A stock certificate representing 414,450 shares of common stock of SSP ("New Shares") representing the sum of $373,005.00 calculated at a per share price of $0.90. The New Shares shall be duly authorized, validly issued, fully paid and nonassessable. (d) Duly executed Lease Surrender and Termination Agreement for the real property located at 9012 Research Drive, Irvine, California, a copy of which is attached hereto marked as Exhibit "B". (e) Duly executed Amended Stipulation for Entry of Judgment, a copy of which is attached hereto marked as Exhibit "C". 2 2. In the event SSP fails to timely make any of the August 29th Deliveries to Research as and when required herein, time being of the essence, this Agreement and all exhibits shall be automatically void and of no force or effect, without any further act whatsoever on the part of Research, or any party hereto, and the parties hereto acknowledge and agree that each party shall be in the position said party was prior to this Agreement and shall have any and all rights, claims and/or obligations that existed prior to this Agreement. 3. Simultaneously with SSP's August 29th Deliveries, Research shall deliver to SSP the original of the Note, a copy of which is attached hereto marked as Exhibit "D", marked cancelled. 4. Within two (2) business days of SSP's delivery of the money, stock, and documents described in paragraph 1 of this Agreement, Research shall deliver to SSP a Stipulation to Vacate Judgment, executed by Research's counsel, in the form attached as Exhibit "E". SSP shall cause the fully executed Stipulation to Vacate Judgment to be filed with the Court. In the event the Court fails or refuses to enter an order vacating the Judgment as requested, Research and SSP and their respective counsel agree to work cooperatively, in good faith, and as expeditiously as possible to effectuate the intent of this Agreement and to effectuate such reasonable alternative procedure as the Court may order. 5. Except for the obligations under this Agreement, including any Exhibit hereto, Research and SSP hereby release and forever discharge one another and their respective assignees, transferees, principals, partners, officers, directors, employees, servants, subsidiaries, parents, successors, agents, attorneys and representatives, from any and all claims, demands, damages, debts, liabilities, obligations, contracts, agreements, causes of action, suits and costs, of whatever nature, character or description, whether 3 known or unknown, anticipated or unanticipated, which they may have or may hereafter have or claim to have against one another by reason of any matter or omission arising from any cause whatsoever prior to the Effective Date of this Agreement, including, but not limited to, any of the matters which arise out of, directly or indirectly, or are in any way connected with or mentioned in (i) the Action; or (ii) any matter referred to in Paragraph 1 herein. Except as expressly set forth in this Agreement, it is the intention of the parties in executing this Agreement that this Agreement shall be effective as a full and final accord and satisfaction and general release from any and all matters released hereunder. In furtherance of this intention, the parties acknowledge that each is familiar with Section 1542 of the California Civil Code, which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which is known by him must have materially affected his settlement with the debtor." The parties do hereby waive and relinquish all rights and benefits which each has or may have had under Section 1542 of the California Civil Code with respect to the subject matter of this Agreement. It is understood by the parties that if the facts or law with respect to which the foregoing general release is given hereafter turn out to be other than or different from the facts or law in that connection not known to be or believed by either party to be true, then each party hereto expressly assumes the risk of the facts or law turning out to be so different, and agrees that the foregoing release shall be in all respects effective and not subject to termination or rescission based upon differences in facts or law. 4 6. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original Agreement, and all of which shall constitute one agreement to be effective as of the Effective Date. DATED: August 29, 2003 RESEARCH VENTURE, LLC, a limited liability company By: /S/ JACK J. KESSLER ----------------------------------------- Its: MEMBER/MANAGER ------------------------------- DATED: August 29, 2003 SSP SOLUTIONS, INC., a Delaware corporation, formerly known as LITRONIC INC. By: /S/ THOMAS E. SCHIFF ----------------------------------------- Its: CFO ------------------------------- APPROVED AS FORM: DUBIA, ERICKSON, TENERELLI & RUSSO, LLP By: /S/ MICHAEL R. TENERELLI ---------------------------------------------- Michael R. Tenerelli Attorneys for Plaintiff Research Venture RUTAN & TUCKER, LLP By: /S/ MICHAEL T. HORNAK ---------------------------------------------- Michael T. Hornak Attorneys for Defendant SSP Solutions, Inc. 5 EX-99.5 7 ssp_8kex99-5.txt EXHIBIT 99.5 LEASE SURRENDER AND TERMINATION AGREEMENT ----------------------------------------- I. PARTIES AND DATE. THIS LEASE SURRENDER AND TERMINATION AGREEMENT ("Agreement") is dated as of August 29, 2003 and is made by and between Research Venture, LLC, a limited liability company ("Landlord") and SSP Solutions, Inc., a Delaware corporation ("Tenant"). II. RECITALS. A. Tenant is a party to that certain written lease agreement (the "Lease") dated February 13, 2001, for the Premises known as 9012 Research Drive, Irvine, California. The capitalized terms used and not otherwise defined herein shall have the same definitions as set forth in the Lease. B. Landlord and Tenant desire to terminate the Lease upon the terms and conditions contained in this Agreement. III. TERMINATION. A. DATE. Landlord and Tenant agree that the Lease shall terminate on August 29, 2003 ("Termination Date"), on the condition that Tenant fulfill each and every term and obligation contained herein in a timely manner. B. SURRENDER OF LEASE. Effective as of the Termination Date, Tenant surrenders, forfeits and quitclaims any and all interest in and to the Lease and the Premises to Landlord, including without limitation any and all option rights, Tenant Improvements, and Alterations which Landlord has not required Tenant to remove pursuant to the terms of the Lease. C. SURRENDER OF PREMISES. Upon the Termination Date, Tenant shall surrender possession of the Premises to Landlord in its "as-is" condition. Tenant acknowledges that its failure to surrender possession of the Premises to Landlord on the Termination Date shall be a material default by Tenant under this Agreement. D. ACCEPTANCE. Subject to and conditioned upon the terms, agreements, and representations herein contained, Landlord accepts the termination of the Lease as of the Termination Date. E. RELEASE. Except as expressly set forth in this Agreement, Landlord and Tenant, and their respective officers, directors, shareholders, employees, partners, successors and assigns, hereby mutually release each other and each of their respective officers, directors, shareholders, employees, partners, successors and assigns, from any and all claims, demands, actions, liabilities and obligations, whether known or unknown, which they now have or 1 which may hereafter accrue in the future arising prior to the date of this Agreement under and/or in connection with the Lease. The parties shall, after the Termination Date, have no claim or demand against each other in connection with the Lease, PROVIDED HOWEVER, that nothing in this Agreement shall be deemed to release Tenant from any damages, expenses and liabilities accruing after the Termination Date arising out of the failure of Tenant to surrender the Premises to Landlord on the Termination Date. F. TENANT'S REPRESENTATIONS AND WARRANTIES. Tenant hereby represents and warrants to Landlord that (i) Tenant has not previously assigned its interest in and to the Lease or sublet all or any portion of the Premises; (ii) Tenant has not caused or permitted any release or disposal on, under, within or from the Premises of any Hazardous Materials, and as of the Termination Date shall have properly removed from the Premises all Hazardous Materials stored or used by or on behalf of Tenant within the Premises; and (iii) Tenant has not violated any applicable laws with respect to Tenant's use or occupancy of the Premises which violation shall not have been remedied by Tenant on or before the Termination Date. IV. GENERAL. A. AUTHORITY TO EXECUTE AGREEMENT. Each individual executing this Agreement on behalf of a partnership or corporation represents that he or she is duly authorized to execute and deliver this Agreement on behalf of the partnership and/or corporation and agrees to deliver evidence of his or her authority to Landlord upon request by Landlord. B. GOVERNING LAW. This Agreement and any enforcement of the agreements, acknowledgments and representations of Landlord and Tenant set forth above shall be governed by and construed in accordance with the laws of the State of California. C. COUNTERPARTS. If this Agreement is executed in counterparts, each counterpart shall be deemed an original. D. TIME OF ESSENCE. Time is of the essence as to each of the terms, provisions, conditions and requirements set forth herein. LANDLORD TENANT RESEARCH VENTURE, LLC SSP SOLUTIONS, INC. By: /S/ JACK J. KESSLER By: /S/ THOMAS E. SCHIFF ------------------------------ --------------------------------- Its MEMBER/MANAGER Its CFO --------------------- ---------------------- 2 EX-99.6 8 ssp_8kex99-6.txt EXHIBIT 99.6 DUBIA, ERICKSON, TENERELLI & RUSSO, LLP Michael R. Tenerelli, Bar No. 78401 2 Park Plaza, Suite 300 Irvine, CA 92614-8513 (949) 955-1177 Attorney for Plaintiff Research Venture, LLC SUPERIOR COURT FOR THE STATE OF CALIFORNIA COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
RESEARCH VENTURE, LLC, a limited liability company, ) CASE NO.: 02CC10109 Plaintiff, ) (CONSOLIDATED WITH CASE NO. 02CC10111) vs. ) ) ASSIGNED FOR ALL PURPOSES TO: SSP SOLUTIONS, INC., a Delaware corporation, formerly ) JUDGE ROBERT MOSS known as LITRONIC, INC., and DOES 1 through 50, ) DEPARTMENT C-64 inclusive, ) Defendants. ) AMENDED STIPULATION FOR ENTRY OF JUDGMENT __________________________________________________ ) ) RESEARCH VENTURE, LLC, a limited ) COMPLAINT FILED: JUNE 4, 2002 liability company, ) FIRST AMENDED COMPLAINT FILED: Plaintiff, ) AUGUST 6, 2002 & AUGUST 7, 2002 vs. ) SSP SOLUTIONS, INC., a Delaware ) Corporation, formerly known as LITRONIC, INC., and DOES ) 1 through 50, inclusive, ) Defendants. ) ) ) ) ) ) ) ) ) ) ) - ---------------------------------------------------------
IT IS HEREBY STIPULATED on this 29th day of August, 2003, by and between Plaintiff RESEARCH VENTURE, LLC ("Plaintiff") on the one hand, and Defendant SSP SOLUTIONS, INC. ("Defendant") on the other, that judgment may be immediately entered in the above-entitled action against Defendant and in favor -1- AMENDED STIPULATION FOR ENTRY OF JUDGMENT of Plaintiff in the sum of $1,746,119.60 ("Stipulated Judgment Amount"), under the terms of this Amended Stipulation for Entry of Judgment ("Stipulation"). IT IS FURTHER STIPULATED AND AGREED that Plaintiff shall refrain from filing this Stipulation and the accompanying Judgment Pursuant to Stipulation ("Judgment"), a copy of which is attached hereto marked as EXHIBIT "A" and incorporated herein by this reference, on the following conditions: 1. On December 18, 2002, Defendant filed with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-3 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), for the resale of 1,236,246 shares of Defendant's common stock, of which 1,056,242 have actually been issued to Plaintiff. For the purpose of this Stipulation, the 1,056,242 shares shall be referred to as the "Old Shares". On or prior to September 15, 2003, Defendant shall (a) file such documentation with the SEC as may be required to have the Registration Statement declared effective by the SEC so that Plaintiff can immediately resell the Old Shares, (b) ensure that the Registration Statement remains effective until such time as Plaintiff has sold the Old Shares owned by Plaintiff, and (c) not restrict Plaintiff from selling the Old Shares at any time, and from time to time, after the effective date of the Registration Statement. 2. In the event (a) Defendant fails to have the Registration Statement declared effective by the SEC by September 15, 2003, (b) Defendant fails to maintain continuous effectiveness of the Registration Statement until such time as either (i) Plaintiff has sold all of the Old Shares owned by Plaintiff or (ii) all of the Old Shares have become eligible for resale pursuant to Rule 144(k) (or any similar provision relating to the disposition of securities then in force) under the Securities Act, or (c) Plaintiff, for any reason not within Plaintiff's control, is unable to sell any or all of the Old Shares without restriction, Plaintiff shall be entitled to cause this Stipulation and the accompanying Judgment to be entered by this Court, provided, however, that the amount of the Judgment shall be reduced by the number of Old Shares sold by Plaintiff multiplied by $1.30; all upon EX PARTE application and -2- AMENDED STIPULATION FOR ENTRY OF JUDGMENT declaration of Plaintiff's counsel that Defendant failed to comply with the terms and conditions in a complete and/or timely manner, without further notice or hearing. 3. On or prior to November 30, 2003, Defendant shall (a) file a registration statement on Form S-3, or other form then available to Defendant (the "Investor Registration Statement") covering, among other things, the resale of 414,450 shares of Defendant's common stock owned by Plaintiff (the "New Shares"), (b) have such Investor Registration Statement declared effective by the SEC so that Plaintiff can immediately resell the New Shares, and remain effective until such time as Plaintiff has sold the New Shares owned by Plaintiff and (c) not restrict Plaintiff from selling the New Shares at any time, and from time to time, after the effective date of the Investor Registration Statement. 4. In the event (a) Defendant fails to file the Investor Registration Statement and have it declared effective by the SEC by November 30, 2003, (b) Defendant fails to maintain continuous effectiveness of the Investor Registration Statement until such time as either (i) Plaintiff has sold all of the New Shares owned by Plaintiff or (ii) all of the Old Shares have become eligible for resale pursuant to Rule 144(k) (or any similar provision relating to the disposition of securities then in force) under the Securities Act, or (c) Plaintiff, for any reason not within Plaintiff's control, is unable to sell any or all of the New Shares without restriction, Plaintiff shall be entitled to cause this Stipulation and the accompanying Judgment to be entered by this Court in the amount of $373,005.00 less an amount equal to the number of New Shares sold by Plaintiff multiplied by $0.90, all upon EX PARTE application and declaration of Plaintiff's counsel that Defendant failed to comply with the terms and conditions in a complete and/or timely manner, without further notice or hearing; provided; however, that in the event Defendant fails to meet the requirements of this paragraph solely as a result of a review of the Investor Registration Statement by the SEC, then such failure, and only such failure, shall not entitle the Plaintiff to cause this Stipulation and the accompanying Judgment to be entered by this Court, provided, further, that in order to take advantage of such carve-out the Defendant shall, and shall cause its legal and accounting advisors to, act diligently to resolve any and all issues that the SEC may have regarding the Investor Registration Statement which is subject to -3- AMENDED STIPULATION FOR ENTRY OF JUDGMENT such review. 5. Upon complete and timely performance of the terms and conditions set forth herein, Plaintiff shall file a Request for Dismissal with prejudice of the action. IT IS FURTHER STIPULATED AND AGREED as follows: 1. Findings of fact and conclusions of law shall be, and the same hereby are, waived. 2. Said Judgment shall be entered and become final for all purposes upon entry thereof and each party waives any right to appeal therefrom. 3. Defendant acknowledges that it is aware that it is entitled to notice of hearing and hearing on the Complaint, and Defendant does hereby waive said right to notice of hearing and hearing prior to the entry of judgment and Defendant does expressly consent that a writ of execution may issue without notice in favor of Plaintiff. 4. It is further stipulated and agreed that the Defendant has voluntarily, knowingly and intelligently waived its respective civil due process rights to trial, notice and hearing on the Complaint. 5. It is further stipulated and agreed that at all times material hereto, Defendant has had the opportunity to consult with legal counsel of Defendant's own choosing concerning its respective rights with respect to the form and content of this Stipulation. 6. By entering into this Stipulation, Defendant makes a general appearance in these proceedings and hereby consents to the exercise of jurisdiction of all California courts in Orange County with respect to the proceedings herein and consent to the jurisdiction of said Court to issue any orders, judgment or to take any other further actions with respect to the proceedings herein. In addition, by entering into this Stipulation, Defendant agrees that this Stipulation is to have the force and effect of findings of fact and conclusions of law as though embodied in formal findings of fact and conclusions of law. 7. The above-entitled Court may make and enter the Judgment prepared in accordance with the foregoing Stipulation, which is hereby approved as to form and content by all parties, a copy of said Judgment being attached hereto. -4- AMENDED STIPULATION FOR ENTRY OF JUDGMENT IT IS FURTHER STIPULATED that Plaintiff can, upon entry of Judgment, without any further demand or notice, cause a writ of execution to be issued and levied upon. IN ITS ENTIRETY, THE UNDERSIGNED HAVE READ THE FOREGOING AGREEMENT AND STIPULATION AND ATTACHED JUDGMENT PURSUANT TO STIPULATION, AND FULLY UNDERSTAND THE TERMS AND CONDITIONS THEREOF. DATED: August 29, 2003 RESEARCH VENTURE, LLC, a limited liability company By: /S/ JACK J. KESSLER ----------------------------------------- Its: MEMBER/MANAGER ------------------------------- DATED: August 29, 2003 SSP SOLUTIONS, INC., a Delaware corporation, formerly known as LITRONIC INC. By: /S/ THOMAS E. SCHIFF ----------------------------------------- Its: CFO ------------------------------- APPROVED AS FORM: DUBIA, ERICKSON, TENERELLI & RUSSO, LLP By: /S/ MICHAEL R. TENERELLI ---------------------------------------------- Michael R. Tenerelli Attorneys for Plaintiff Research Venture RUTAN & TUCKER, LLP By: /S/ MICHAEL T. HORNAK ---------------------------------------------- Michael T. Hornak Attorneys for Defendant SSP Solutions, Inc. -5- AMENDED STIPULATION FOR ENTRY OF JUDGMENT -----END PRIVACY-ENHANCED MESSAGE-----