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 and Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 5, 2004
INNOVO GROUP INC.
(Exact name of registrant as specified in charter)
Delaware 0-18926 11-2928178
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
5804 East Slauson Ave., Commerce, California 90040
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (323) 725-5516
No Change
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(Former name or former address, if changed since last filing)
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Item 5. Other Events and Required FD Disclosure
On March 8, 2004, the Registrant issued the press release
attached hereto as Exhibit 99 and incorporated herein by
reference.
Item 7. Exhibits
(c) Exhibits
Exhibit
Number Description
Exhibit 99 Press Release dated March 8, 2004
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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: March 8, 2004 By: /s/ Samuel J. Furrow, Jr.
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Samuel J. Furrow, Jr.
Chief Executive Officer and Director
(Principal Executive Officer)
Exhibit Index
Exhibit
Number Description
Exhibit 99 Press Release dated March 8, 2004
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Exhibit 99
[INNOVO GROUP INC. LOGO]
FOR IMMEDIATE RELEASE
Innovo Group Stockholders Approve Proposal at Special
Meeting
LOS ANGELES, March 8, 2004 -- Innovo Group Inc. (NASDAQ:
INNO) announced today at a special meeting held on Friday,
March 5, 2004 the Company's shareholders approved the
conversion of $12.5 million in outstanding principal amount
of the Company's long-term debt associated with the Blue
Concepts acquisition, which is discussed in more detail
below, into a maximum of 4,166,667 shares of Company common
stock.
On July 17, 2003, the Company acquired substantially all of
the assets of the Blue Concept Division of Azteca Production
International, Inc. ("Azteca"), Hubert Guez and Paul Guez,
two of the Company's substantial stockholders, primarily
relating to the design, manufacture and wholesaling of denim
apparel, for $21.8 million. As payment for the acquisition,
the Company issued a promissory note to Azteca for $21.8
million that is partially convertible into shares of Company
common stock.
Based on the stockholder's approval on March 5, 2004, $12.5
million of the outstanding principal amount of the note
issued to Azteca will automatically convert into 3,125,000
shares of Company common stock. Pursuant to the note's
conversion provisions, the exact amount of the note to be
converted is determined by multiplying the 3,125,000 shares
to be issued by the greater of (i) the closing stock price
on the day immediately preceding the special meeting, or
(ii) $4.00. On March 4, 2004, the day preceding the special
meeting, the closing stock price of the Company's stock was
$2.69. As a result, the conversion price per share is
$4.00. In no event, however, shall more than $12.5 million
in principal amount of the note be converted. Up to
1,041,667 additional shares may be issued upon the
occurrence of certain future contingencies relating to the
Company's stock price for the thirty (30)-day period ending
March 6, 2005.
The voting results of the special meeting held on March 5,
2004 are as follows:
* A total of 16,698,574 shares of company common stock
were represented at the meeting, which reflected
approximately 65% of the total shares outstanding of
25,784,850 as of the February 4, 2004 record date.
* The note conversion proposal received 16,513,716
favorable votes, or approximately 64% of the votes
represented at the special meeting.
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"We are pleased to have obtained the approval from
stockholders on this proposal. As a result of the
conversion of a portion of the note into common stock, the
Company's balance sheet will be strengthened and substantial
monthly interest payments that we have been paying pursuant
to the terms of the promissory note will be greatly
reduced," commented Jay Furrow, Innovo Group CEO. "We have
been pleased with the performance of the Blue Concepts
division and look forward to growing and expanding the
business as we move forward."
About Innovo Group Inc.
Innovo Group Inc. through its subsidiaries Innovo Inc.,
Innovo Azteca Apparel, Inc. and Joe's Jeans, is a sales and
marketing organization designing and selling craft, apparel
and accessory products to the retail and premium markets.
The Company's craft products include canvas and denim tote
bags and aprons. The Company's apparel products consist of
knit shirts and women's high-end denim jeans and knit shirts
featuring the Joe's brand. The Company's accessory product
line is comprised of such products as licensed and non-
licensed backpacks, tote bags, waist packs and handbags. The
Company currently produces products under licensing
agreements for the Bongor, Fetish, Shagor and Hot Wheelsr
marks. More information is available at the company web site
at www.innovogroup.com.
Statements in this news release which are not purely
historical facts are forward-looking statements, including
statements containing the words "believe," "estimate,
"project," "expect" or similar expressions. These statements
are made pursuant to the safe harbor provisions of Section
21E of the Securities Exchange Act of 1934, as amended. All
forward-looking statements are based upon information
available to Innovo Group Inc. on the date of this release.
Any forward-looking statement inherently involves risks and
uncertainties that could cause actual results to differ
materially from the forward-looking statements. Factors that
would cause or contribute to such differences include, but
are not limited to, continued acceptance of the Company's
products in the marketplace, successful implementation of
its strategic plan, the extension or refinancing of its
existing bank facility and the restrictions any such
extension or refinancing could place on the company, the
ability to obtain new financing from other financing
sources, the ability to generate positive cash flow from
operations and asset sales, competitive factors, dependence
upon third-party vendors, and other risks detailed in the
company's periodic report filings with the Securities and
Exchange Commission. By making these forward-looking
statements, the company undertakes no obligation to update
these statements for revisions or changes after the date of
this release. Readers are cautioned not to place undue
reliance on forward-looking statements.
Contact:
Innovo Group, Inc.
Marc Crossman, 323-725-5572
Investor Relations Network
Tom Gavin, 909-279-8884