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):
March 26, 2008
Industrial Enterprises of America,
Inc.
(Exact
name of registrant as specified in its charter)
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Nevada
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001-32881
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13-3963499
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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651 Holiday
Drive, Suite 300, Pittsburgh, Pennsylvania 15220
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code:
(412)
928-2056
(Former
name or former 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:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section 1 - Registrant’s Business
and Operations
Item 1.01 Entry into a Material
Definitive Agreement.
On October 11,
2007,
Industrial Enterprises of
America, Inc., a Nevada corporation (the “Company”),
and its subsidiaries,
Unifide Industries, Limited Liability
Company, a New Jersey limited liability company, Pitt Penn Oil Co., LLC, an Ohio
limited liability company, EMC Packaging, Inc., a Delaware corporation, Todays
Way Manufacturing LLC, a New Jersey limited liability company, and Pitt Penn
Holding Co., LLC, an Ohio limited liability company (
the subsidiaries together with the
Company,
collectively, the
“Borrowers”)
,
entered into a
Credit Agreement
(the “Credit Agreement”)
with
Sovereign Bank (the “Lender”)
in connection with
a
r
evolving
c
redit
line f
acility
(the “Facility”)
.
Pursuant to the terms of the Credit
Agreement,
the Lender may
make
r
evolving
c
redit
l
oans to the Borrowers
, on a joint and several
basis, in an aggregate principal amount
not to exceed $5,000,000.
As previously disclosed in its Current
Report on Form 8-K
filed
with
the
Securities
and Exchange Commission on February 19,
2008, the Company received a notice of default under the Credit Agreement on
February 12, 2008. As a result of its continuing default, the Lender
notified the Company on
March 26,
2008, that it would no longer make any loans or advances under the Facility or
under any of its other commitments to the Company. In addition, the
Lender increased the rate of interest to the default rate contained in the
Credit Agreement, which is 4% percent per annum in excess of the prime
rate.
Also on
March 27, 2008
,
the Lender notified the Company that it
was revising the definitions of Eligible Accounts, Eligible Inventory and
Borrowing Base contained in the Credit Agreement. The Borrowing Base
will now be calculated as the sum of (i) 75
% of the Eligible Accounts plus (ii) the
lesser of (a)
4
5% of the Eligible Inventory or (b)
$2,000,000
.
The Company has engaged in discussions
with the Lender since its receipt of the notices described above regarding a
forbearance. However,
there can be no assurance
s
that the Lender will not exercise its
rights and remedies against the
Borrowers
as provided for in the Credit
Agreement.
The foregoing summary of the Credit
Agreement and the amendment thereto is not complete and is qualified in its
entirety by reference to the full text of the Credit Agreement and the amendment
to the credit agreement. A copy of the amendment is attached to this
Current Report on Form 8-K as Exhibit 10.2 and is incorporated by reference into
this Item 1.01.
Section 2 - Financial
Information
Item 2.03 Creation of a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information set forth in Item 1.01
of this Current Report is incorporated by reference into this Item
2.03.
Item 2.04 Triggering Events That
Accelerate or Increase a Direct Financial Obligation or an Obligation under an
Off-Balance
Sheet Arrangement.
The information set forth in Item 1.01
of this Current Report is incorporated by reference into this Item
2.04.
Section 9 – Financial Statements
and Exhibits
Item 9.01 Financial Statements and
Exhibits.
(d)
Exhibits.
Exhibit
No. Description
10.1 Credit
Agreement, dated
October 11,
2007
,
incorporated by reference to the
Company’s Current Report on Form 8-K filed on February 19,
2008.
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.
Industrial
Enterprises of America, Inc.
(Registrant)
April 2, 2008
By:
/s/ James
Margulies
James Margulies
Chief
Executive Officer
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