UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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):
October 8,2004 (October 4, 2004)
Innovo Group Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-18926 11-2928178
(Commission File Number) (IRS Employer Identification No.)
5804 East Slauson Avenue, Commerce, California 90040
(Address of Principal Executive Offices) (Zip Code)
(323) 725-5516
(Registrant's Telephone Number, Including Area Code)
N/A
(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 (see General
Instruction A.2. below):
[]Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[]Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[]Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[]Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
As previously disclosed on June 23, 2004 in a Current Report
on Form 8-K, on June 15, 2004, our Board of Directors authorized
us to raise up to $4,000,000 dollars through the sale of
convertible promissory notes and common stock purchase warrants.
In June 2004, we closed a round of financing which resulted in
aggregate gross proceeds to us of $2,500,000 immediately through
the sale of the convertible promissory notes and up to an
additional $452,000 in aggregate gross proceeds to us upon
exercise of the common stock purchase warrants.
On September 27, 2004, our Board of Directors authorized us
to raise up to an additional $1,500,000 for an aggregate of
$5,500,000 through the sale of additional convertible promissory
notes and common stock purchase warrants on substantially similar
terms. On October 4, 2004, we raised an additional $1,885,000
through the sale of convertible promissory notes and up to an
additional $537,000 in aggregate gross proceeds to us upon
exercise of the common stock purchase warrants.
The convertible promissory notes in the aggregate principal
amount of $1,885,000, together with common stock purchase
warrants to purchase an aggregate of 235,625 shares of our common
stock were sold to six "accredited investors," as defined in
Regulation D promulgated under the Securities Act of 1933, as
amended, or the Securities Act. The transaction documents
executed with each purchaser were substantially similar to those
previously filed with our Current Report on Form 8-K with the
Securities and Exchange Commission on June 23, 2004, as attached
thereto and incorporated therein as Exhibits 4.1, 4.2 and 4.3,
respectively. Such transaction documents as filed on our Current
Report on Form 8-K on June 23, 2004 and attached thereto as
Exhibits 4.1, 4.2 and 4.3 are accordingly incorporated herein by
reference to this Current Report on Form 8-K.
The convertible promissory note issued to each purchaser
bears interest at a rate of 7.5% per annum and has a maturity
date on October 4, 2005. The convertible note is convertible at
any time from the date of issuance into shares of our common
stock at a price per share equal to $2.28, which is equal to 110%
of the average of the closing price of our common stock for the
five trading days immediately prior to October 4, 2004. We will
pay interest only payments until the maturity date of the
convertible note, unless it is converted or prepaid. We have an
option to make one prepayment of the note, in whole or in part,
without penalty at any time after three months. In the event
that we elect to prepay the convertible note, the purchaser may
elect within 3 days to convert all or a portion of the note into
common stock and thus prevent our prepayment of the convertible
note.
Each purchaser was also issued corresponding warrants to
purchase shares of common stock. The number of shares that the
purchaser is eligible to purchase is equal to 12.5% of the
aggregate amount of each convertible promissory note and the
exercise price of the warrants on a per share basis is also
$2.28. The warrants on October 4, 2009 expire and are exercisable
immediately. In connection with both the convertible notes and
the warrants, we entered into a registration rights agreement
with each of the purchasers whereby we agreed to register for
resale the shares underlying the convertible notes and warrants.
Each purchaser represented to Innovo Group that they are an
"Accredited Investor," as that term is defined in Rule 501(a) of
Regulation D under the Securities Act. The convertible notes and
warrants were offered and sold to each purchaser in reliance upon
an exemption from registration under Rule 506 of Regulation D the
Securities Act.
ITEM 9.01 Financial Statements and Exhibits
(c) Exhibits.
Exhibit
Number Description
Exhibit 4.1* Form of Convertible Promissory Note
Exhibit 4.2* Form of Common Stock Purchase Warrant
Exhibit 4.3* Form of Registration Rights Agreement
*previously filed
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.
INNOVO GROUP INC.
(Registrant)
Date: October 8, 2004 By: /s/ Samuel J. Furrow, Jr.
-------------------------
Samuel J. Furrow, Jr.
Chief Executive Officer and
Director
(Principal Executive Officer)
Exhibit Index
Exhibit
Number Description
Exhibit 4.1* Form of Convertible Promissory Note
Exhibit 4.2* Form of Common Stock Purchase Warrant
Exhibit 4.3* Form of Registration Rights Agreement
* previously filed