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 19, 2009
POWER
SPORTS FACTORY, INC.
(Exact
Name of Registrant as Specified in Charter)
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Minnesota
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000-25385
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41-1853993
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(State
or Other Jurisdiction
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(Commission
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(
I.R.S. Employer
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of
Incorporation)
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File
Number)
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Identification
No.)
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6950
Central Highway, Pennsauken, NJ
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08109
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (856) 488-9333
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
1.02. Termination of Material Definitive
Agreement.
We
entered into a Loan and Security Agreement (the “Agreement”), dated January 9,
2009, by and between Power Sports Factory, Inc. and Crossroads Debt LLC
(“Crossroads”), pursuant to which advances to us of approximately $514,000 have
been made. Funds advanced under the Agreement were used by us to finance the
purchase of our inventory of bikes for resale. The Loan and Security Agreement
provides that if we default in the performance of any payment obligation due
under this Agreement,that will constitute an Event of Default under the
Agreement. The Agreement provides that, upon the
occurrence of any Event of Default, Crossroads may declare the Agreement
terminated and declare all Obligations under the Agreement to be immediately due
and payable. On October 27, 2009, we received a notice from Crossroads that we
are in default of the Agreement as a result of, inter alia: failure to pay
for and maintain insurance on our assets, in violation of Sections 10.1.10 and
12.4 of the Agreement; the Obligations (as defined in the Agreement) exceed the
Allowable Amount (as defined in the Agreement), in violation of Section 12.6 of
the Agreement; our failure to pay warehousing fees, in violation of Section 12.4
of the Agreement; our default under our licensing agreement with Andretti IV,
LLC, in violation of Section 12.4 of the Agreement. Crossroads has
accelerated the payment of all obligations owing to Crossroads, including,
without limitation, all amounts due under the Agreement, and has demanded the
repayment in full of all amounts due and owing from us to Crossroads. In the
event that all amounts due from us to Crossroads, including, without limitation,
all amounts due under the Agreement, plus all interest, fees, etc., and legal
fees, are not repaid in full by 5:00 p.m. on November 3, 2009, Crossroads has
advised that it intends to exercise all of its rights under the Agreement and
applicable law against us and our assets and against the Guarantors under the
Agreement.
We are
working with Crossroads to accelerate the liquidation of our inventory and pay
the outstanding balance on the Agreement, which was approximately $347,840 as of
October 30th, 2009.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
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POWER
SPORTS FACTORY, INC.
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By
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/s/
Shawn
Landgraf
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Shawn
Landgraf, Chief Executive Officer
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Date:
November 2, 2009
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