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
MAY 25, 2005
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(Date of Earliest Event Reported)
ACL SEMICONDUCTORS INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 000-50140 16-1642709
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
B24-B27,1/F., BLOCK B, PROFICIENT INDUSTRIAL CENTRE, 6 WANG KWUN ROAD,
KOWLOON, HONG KONG
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(Address of principal executive offices)
(852) 2799-1996
(Registrant's telephone number, including area code)
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
In December 2003, ACL Semiconductors, Inc., a Delaware corporation (the
"Company") issued a 12% subordinated convertible note in the amount of $250,000
(the "Note') to Professional Traders Fund, Inc. ("PTF"). The holder of the Note,
at its option, could convert the outstanding balance of the Note into shares of
common stock of the Company at the conversion price, which was defined as 40% of
the average closing price of the stock three trading days immediately prior to
the Notice of Conversion date or the interest payment date or the debt maturity
date. The conversion price could not in any case exceed $1 per share.
During the year ended December 31, 2004, PTF converted $100,000 of the
aggregate principal amount outstanding of the Note into 222,980 shares of common
stock of the Company and $12,385 of outstanding accrued interest of the Note
into 29,579 shares of common stock of the Company through the shares pledged by
three shareholders. Accordingly, the Company's shareholders issued directly to
PTF a total of 252,559 shares of common stock of the Company.
On February 9, 2005, PTF filed a lawsuit against the Company in the
Southern District of New York alleging breach of contract of the unpaid
principal amount of the Note equaling $150,000, unpaid interest of $4,500,
default interest of $938, liquidated damage of $30,000 and default damage of
$55,350 and the related legal cost. Also, PTF sought reimbursement for
attorneys' fees and costs. The Company did not file an answer to such action by
PTF and PTF moved in the action to hold the Company in default.
On May 25, 2005, a default judgment was entered against the Company
totaling $251,087.50. The breakdown of the amount is as follows: (i) the
liquidated amount of $150,000 with interest from January 1, 2005 to April 8,
2005 equaling $6,040.75; (ii) pre-default interest at 12% from September 30,
2004 to December 31, 2004 equaling $4,500; (iii) penalties on default equaling
$85,350; (iv) attorneys costs and fees equaling $4,781; and (v) disbursements in
the action equaling $415.76.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATED: MAY 26, 2005
ACL SEMICONDUCTORS INC.
By: /s/ Kenneth Chan
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Name: Kenneth Chan
Title: Chief Financial Officer
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