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<SEC-DOCUMENT>0000950123-11-006602.txt : 20110128
<SEC-HEADER>0000950123-11-006602.hdr.sgml : 20110128
<ACCEPTANCE-DATETIME>20110128150122
ACCESSION NUMBER:		0000950123-11-006602
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20110125
ITEM INFORMATION:		Material Impairments
FILED AS OF DATE:		20110128
DATE AS OF CHANGE:		20110128

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INTELLIGENT SYSTEMS CORP
		CENTRAL INDEX KEY:			0000320340
		STANDARD INDUSTRIAL CLASSIFICATION:	BOLTS, NUTS, SCREWS, RIVETS & WASHERS [3452]
		IRS NUMBER:				581964787
		STATE OF INCORPORATION:			GA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09330
		FILM NUMBER:		11555441

	BUSINESS ADDRESS:	
		STREET 1:		4355 SHACKLEFORD RD
		CITY:			NORCROSS
		STATE:			GA
		ZIP:			30093
		BUSINESS PHONE:		4043812900

	MAIL ADDRESS:	
		STREET 1:		4355 SHACKLEFORD ROAD
		CITY:			NORCROSS
		STATE:			GA
		ZIP:			30093
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>c11604e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>Form 8-K</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in">
<DIV style="font-size: 10pt">
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style="border-bottom: black 2pt solid; width: 100%; font-size: 1pt">&nbsp;</DIV>
<DIV
style="border-bottom: black 1pt solid; width: 100%; font-size: 1pt">&nbsp;</DIV>

<P style="font-size: 14pt" align="center"><B>UNITED STATES<BR>
SECURITIES AND
EXCHANGE COMMISSION<BR>
<FONT style="font-size: 12pt">Washington, D.C. 20549
</FONT></B>

<P style="font-size: 18pt" align="center"><B>FORM 8-K</B>

<P style="font-size: 12pt" align="center"><B>CURRENT REPORT<BR>
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934</B>

<P style="font-size: 10pt" align="center"><B>Date of Report (Date of earliest
event reported): January 25, 2011</B>

<P style="font-size: 24pt" align="center"><B>INTELLIGENT SYSTEMS
CORPORATION<BR>
</B><FONT style="font-size: 10pt">(Exact name of registrant as
specified in its charter) </FONT>
<TABLE style="text-align: center; font-size: 10pt" border="0" cellspacing="0"
cellpadding="0" width="100%">

 <TR>
  <TD width="32%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="33%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="32%">&nbsp;</TD>
 </TR>
 <TR valign="bottom">
  <TD style="border-bottom: #000000 1px solid"><B>Georgia</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>1-9330</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>58-1964787</B></TD>
 </TR>
 <TR valign="top">
  <TD>(State or other Jurisdiction of Incorporation)</TD>
  <TD>&nbsp;</TD>
  <TD>(Commission File Number)</TD>
  <TD>&nbsp;</TD>
  <TD>(IRS Employer Identification No.)</TD>
 </TR>

</TABLE>
<TABLE style="text-align: center; font-size: 10pt" border="0" cellspacing="0"
cellpadding="0" width="100%">

 <TR>
  <TD width="49%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="49%">&nbsp;</TD>
 </TR>
 <TR valign="bottom">
  <TD style="border-bottom: #000000 1px solid"><B>4355 Shackleford Road,
Norcross, Georgia<BR>
</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>30093</B></TD>
 </TR>
 <TR valign="top">
  <TD>(Address of Principal Executive Offices)</TD>
  <TD>&nbsp;</TD>
  <TD>(Zip Code)</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="center">Registrant&#8217;s telephone number,
including area code: <B>(770) 381-2900</B>
<TABLE style="text-align: center; font-size: 10pt" border="0" cellspacing="0"
cellpadding="0" width="30%">

 <TR>
  <TD width="100%">&nbsp;</TD>
 </TR>
 <TR>
  <TD style="border-bottom: #000000 1px solid" nowrap><B>&nbsp;</B></TD>
 </TR>
 <TR>
  <TD nowrap>(Former name or former address if changed since last report.)</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="left">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:

<P style="font-size: 10pt" align="left"><FONT face="Wingdings">o</FONT> Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)<BR>
<BR>
<FONT face="Wingdings">o</FONT> Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR>
<BR>
<FONT
face="Wingdings">o</FONT> Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR>
<BR>
<FONT
face="Wingdings">o</FONT> Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<BR>


<DIV
style="border-bottom: black 1pt solid; margin-top: 10pt; width: 100%; font-size: 1pt">&nbsp;</DIV>
<DIV
style="border-bottom: black 2pt solid; width: 100%; font-size: 1pt">&nbsp;</DIV>
</DIV>

<P style="font-size: 10pt" align="center">&nbsp;

<P style="display: none; font-size: 10pt" align="center">1
</DIV>

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<DIV
style="width: 7.5in; font-family: 'Times New Roman',Times,serif; margin-left: 0.25in">

<P style="font-size: 10pt" align="justify"><B>Item&nbsp;2.06. Material
Impairment</B>

<P style="text-indent: 4%; font-size: 10pt" align="justify">As previously
disclosed, on April&nbsp;15, 2010, IBS Technics (&#8220;IBS&#8221;) and
IBS&#8217;s parent company, IBS Software Services Americas, Inc. (&#8220;IBS
Parent&#8221;) asserted a claim against the Company and its subsidiaries,
VISaer, Inc. and VISaer (UK) Ltd. (collectively &#8220;VISaer&#8221;) demanding
indemnification for damages purportedly resulting from a breach of certain
representations and warranties in the Asset Purchase Agreement entered into
between the parties on April&nbsp;4, 2008 (the &#8220;APA&#8221;), pursuant to
which IBS had acquired certain assets and the operations of the Company&#8217;s
VISaer subsidiaries. The APA obligated IBS to make earn-out payments to VISaer
totaling $1,500,000 in three equal annual installments as additional purchase
price. On September&nbsp;8, 2010, VISaer filed a demand for arbitration against
IBS and IBS Parent with the American Arbitration Association seeking payment of
a past due earn-out payment of $500,000 owed under the APA. On October&nbsp;11,
2010, IBS and IBS Parent served a counterclaim seeking alleged damages of
approximately $2.5&nbsp;million, in addition to interest, costs and
attorneys&#8217; fees based on their claim for indemnification.

<P style="text-indent: 4%; font-size: 10pt" align="justify">On January&nbsp;25,
2011, the parties entered into a Settlement Agreement and Mutual Release (the
&#8220;Agreement&#8221;) settling all claims and counterclaims. The terms of
the Agreement provide that IBS will pay to the Company a total of $1,100,000,
payable in installments of $600,000 on or before February&nbsp;21, 2011,
$250,000 on or before January&nbsp;21, 2012, and $250,000 on or before
January&nbsp;21, 2013. These payments, which are guaranteed by IBS Parent, will
constitute full satisfaction of IBS&#8217;s obligation for earnout payments
under the APA. Management determined that, notwithstanding the reduction in the
amount of earnout payments due, the Agreement was in the best interests of the
Company and a reasonable way to resolve this matter, taking into consideration
the anticipated time, expense, diversion of resources and uncertain outcome of
a lengthy arbitration process.

<P style="text-indent: 4%; font-size: 10pt" align="justify">Upon execution of
the Agreement, management of the Company determined that, as a result thereof,
the carrying value of the note receivable from IBS related to the earn-out
amount has been materially impaired. The amount of the impairment (net of a
reduction in a related liability) is estimated at approximately $350,000 and
will be recorded in the Company&#8217;s financial statements for the year ended
December&nbsp;31, 2010. There are no future cash expenditures related to the
impairment.

<P style="font-size: 10pt" align="center">SIGNATURE

<P style="text-indent: 4%; font-size: 10pt" align="justify">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.

<P style="font-size: 10pt" align="justify">Date: January&nbsp;28, 2011

<P style="margin-top: -11pt; margin-left: 46%; font-size: 10pt"
align="justify">INTELLIGENT SYSTEMS CORPORATION <BR>
(Registrant)

<P style="margin-left: 46%; font-size: 10pt" align="justify"><U><B>/</B>s/
Bonnie L. Herron</U>

<DIV style="margin-left: 47%; text-indent: -6%; font-size: 10pt" align="justify">By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bonnie L. Herron
</DIV>

<DIV style="margin-left: 46%; font-size: 10pt" align="justify">Chief Financial Officer
</DIV>

<P style="font-size: 10pt" align="center">2

<P style="display: none; font-size: 10pt" align="center">2
</DIV>
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