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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):
June 16, 2000
CELERITY SYSTEMS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-23279 52-2050585
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(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification No.)
Incorporation)
122 Perimeter Park Drive
Knoxville, Tennessee 37922
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including
area code: (865) 539-5300
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(Former Address, if changed since last report)
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THIS FORM 8-K CONTAINS FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS INVOLVE
VARIOUS RISKS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED IN SUCH FORWARD LOOKING STATEMENTS. THESE RISKS AND UNCERTAINTIES
INCLUDE, BUT ARE NOT LIMITED TO: CELERITY SYSTEM INC.'S ("CELERITY") HISTORY OF
LOSSES AND NEED FOR FINANCING, MARKET DEMAND FOR CELERITY'S PRODUCTS, SUCCESSFUL
IMPLEMENTATION OF CELERITY'S PRODUCTS, COMPETITIVE FACTORS, THE ABILITY TO
RECRUIT ADDITIONAL PERSONNEL AND OTHER RISKS DETAILED FROM TIME TO TIME IN
CELERITY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION"),
INCLUDING, BUT NOT LIMITED TO, THOSE DESCRIBED UNDER THE CAPTION "DESCRIPTION OF
BUSINESS - RISK FACTORS" IN CELERITY'S ANNUAL REPORT ON FORM 10-KSB FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1999.
Item 5: OTHER EVENTS
The following disclosure is qualified in its entirety by the terms of
the Kidston Subscription Agreement, WIT Agreement and nCube Reseller Agreement,
attached hereto as exhibits 99.1 and 99.2, respectively.
KIDSTON FAMILY CORPORATION, LLC
Celerity has received gross proceeds of $1,020,000 from a private
placement consummated on June 16, 2000. Kidston Family Corporation, LLC
("Kidston"), the investor in the private placement, received 1,500,000 shares of
Celerity's common stock at a purchase price of $.68 per share. The price per
share was below the market price of Celerity's common stock at the time of
issuance, it represented a twenty per cent discount from market at the time the
initial discussions were held with the investor. Celerity will use the proceeds
to advance its business activities and for working capital. Celerity agreed to
file a registration statement covering the resale of the shares within ninety
days from the closing date, and to apply commercially reasonable efforts to the
aim of having the registration statement declared effective within one hundred
ninety-five days from the closing date. In the event that the registration
statement is not declared effective within one hundred ninety-five days,
Celerity will pay damages to Kidston in the amount of two percent of the
purchase price of the shares then outstanding, payable in cash or stock at
Celerity's option, each month until the registration statement is declared
effective or the shares may be sold by the investor pursuant to Rule 144
promulgated under the Securities Act of 1933 (the "Securities Act").
WIT TECHNOLOGIES INC.
On June 22, 2000, Celerity entered into a five-year agreement with WIT
Technologies, Inc. whereby WIT agreed to purchase all of its requirements for
set top boxes from Celerity, unless Celerity is unwilling or unable to fill an
order. WIT is obligated to order a minimum of 500,000 set top boxes. If WIT
fails to meet its minimum purchase obligation, it will pay liquidated damages to
Celerity in the amount of $100,000. In addition, Celerity agreed to sell WIT up
to three CTL 7000 digital video servers, as well as CTL 9500 digital video
servers upon request, within one year. Celerity also agreed to provide WIT with
a digital video server for up to one year for demonstration purposes. Celerity
agreed that it will not sell any products or services to any entity introduced
by WIT, other than through WIT.
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Upon execution of this agreement, Celerity sold WIT 100,000 shares of
common stock at $0.68 per share. Celerity has agreed to use commercially
reasonable efforts to register the resale of such shares under the Securities
Act as soon as practicable after the closing. In addition, Celerity has agreed
to issue warrants to purchase up to one million shares of common stock for a
period of five years from date of issue at market price less 15%, subject to
stockholder approval if required. However, WIT is only entitled to purchase one
warrant for 20,000 shares for each 10,000 digital set top boxes purchased.
nCUBE CORPORATION
On June 27, 2000, Celerity entered into a two-year agreement with nCube
Corporation whereby Celerity will be a non-exclusive reseller of nCube's
equipment (which consists of computer hardware) and a sublicensor of nCube's
software (which consists of licensed computer software, diagnostics and
documentation). Celerity has agreed to purchase one demo and development system
and, at its option, up to two additional systems at a 40% discount within thirty
days. Celerity has also agreed to purchase an additional system within 12 months
at the same discount for a total purchase commitment of approximately $50,000.
Celerity is entitled to a 30% discount during the initial term of the agreement
based upon a sales commitment of a minimum of five million dollars. There is no
penalty if the minimum is not met.
Item 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
99.1 Subscription Agreement, dated as of June 16, 2000,
between Celerity Systems, Inc. and the Kidston
Family Corporation, LLC (the "Kidston Subscription
Agreement").
99.2 Agreement, dated June 22, 2000, between Celerity
Systems, Inc. and WIT Technologies, Inc. (the "WIT
Agreement").
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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 hereunto duly authorized.
Dated: July 7, 2000
CELERITY SYSTEMS, INC.
By: /s/ Kenneth D. Van Meter
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Kenneth D. Van Meter
President and Chief Executive Officer
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