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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 Exchange Act
October 11, 2000
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Date of Report
(Date of Earliest Event Reported)
COMPUTERIZED THERMAL IMAGING, INC.
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(Exact name of registrant as specified in its charter)
Nevada 000-23955 87-0458721
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(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation or
Organization)
476 HERITAGE PARK BOULEVARD, SUITE 210
LAYTON, UTAH 84041
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(Address of principal executive offices)
(801) 776-4700
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(Registrant's telephone number)
Not Applicable
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(Former Name and Address of Principal Executive Offices)
Item 5. Other Events.
In connection with Latin America markets, in September 1999, we engaged
William L. Mazilly and Amirali A. Rajwany, independent consultants, to establish
a consortium in Latin America to market and deploy our Breast Imaging System
throughout Central and South America. For services rendered in connection
therewith, each was paid 100,000 shares of our common stock
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valued at $1.20 per share. As a result of their efforts, we entered into two
Letter Agreements (collectively, the "Agreements") on October 28, 1999 with
Computerized Thermal Imaging International, Inc. ("CTII"), an entity in which we
received a 15 percent interest, whereby CTII received, among other things, 1)
the exclusive right to represent the expansion of our business into Central and
South America, 2) the obligation to prepare and implement a marketing strategy
for deployment of our Breast Imaging System in those areas of the world, 3) the
right of first refusal on our Health Card manufacturing worldwide, and 4) the
obligation to sell a minimum of 100 of our Breast Imaging Systems over a
two-year period in the target territories. The Agreements further provided that
we would grant to CTII, as compensation, options to purchase up to 5 million
shares of our common stock in 50,000 share increments contingent on their
placement of each Breast Imaging System into commercial use in the specified
territories. Each 50,000 block of options granted the holder thereof the right
to purchase, for a period of two years, 50,000 shares of our common stock at a
strike price equal to $1.6745, a 15 percent discount to the bid price of our
common stock on October 28,1999.
Pursuant to the Agreements, on June 6, 2000, we sold 10 Breast Imaging
Systems to CTII for $5 million. In connection therewith, we received a down
payment of $1.75 million with the remaining $3.25 million to be received upon
delivery of the systems. The sales invoice obligated us to deliver the 10
systems to CTII on, or about, mid-October, 2000. In connection therewith, we
expected to issue 500,000 options upon the delivery and placement of such
systems into commercial use. As of the date hereof, we have not issued any
options to CTII.
In late September 2000, we advised CTII of our desire to renegotiate
the foregoing Agreements given the substantial change in market conditions, the
increased value of our common stock and unresolved issues concerning their
deployment of our systems in Mexico. On October 11, 2000, following attempts to
reach more favorable terms, we decided it was in the best interests of the
Company and our shareholders to mutually terminate the Agreements and the sale
of the 10 units. We accordingly did so and have refunded by wire transfer the
down payment received from CTII on the initial sale of the 10 units. In
connection with the termination of the Agreements, our 15% ownership in CTII
reverts back to the remaining principals of CTII and each party to the
Agreements will bear the respective costs of any performance under the
Agreements. In consideration of these efforts to expand our business into
Latin America, Mr. Mazilly and Mr. Rajwany will retain the common stock
previously granted to them.
Item 7. Exhibits
The following exhibits are filed herewith:
Exhibit 10. Letter of Agreement Terminating Agreements dated
October 28, 1999 and Purchase Order dated June 5, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
COMPUTERIZED THERMAL IMAGING, INC.
Date: 10/13/2000 By: /s/ Kevin L. Packard
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Kevin L. Packard
Chief Financial Officer,
Secretary & Treasurer
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