April 15, 2010 (FinancialWire) — Nighthawk Systems, Inc. (OTC: NIHK) has entered into an agreement with Dutchess Private Equities Fund, Ltd. that settles all claims and counterclaims filed between Dutchess and the company in January and February 2010.

Nighthawk has granted and assigned to Dutchess all personal and intangible assets, excluding cash, used by the company's power controls division, including intellectual property rights, domain names, contracts and customer relationships. The company has also agreed to change its name in due course, and has assigned the rights to the name "Nighthawk Systems" and its associated trademark to Dutchess. The net book value of the assets at the time of the transfer was approximately $125,000.

In return, Dutchess has made a $150,000 payment to the company and has released the company of any and all debt owed to Dutchess by the company, and has released any liens or claims against any assets remaining in the company. At the time of the release, the book value of debt and accrued interest owed to Dutchess by the company was approximately $4.4 million. Dutchess also agreed to surrender all shares of and warrants to buy shares of company common stock, and has surrendered all of the approximately $6.9 million in series B preferred stock which it previously owned. The company has issued $5 million of non-voting Series C preferred stock to Dutchess which bears no dividend and cannot be converted for a period of 12 months. After 12 months, no more than $1 million of the Series C preferred stock can be converted annually, nor can daily conversion to common shares exceed 10% of the then-current average trading volume of company shares.

H. Douglas Saathoff, Nighthawk's chief executive officer, said he looks forward to re-branding the company and growing the ongoing Set Top Box operation."

Nighthawk designs and manufactures a suite of IP set top boxes for use in hotels, casinos, cruise ships, hospitals, and digital signage applications.

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