U.S. 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 of 1934
Date of Report: May 2, 1997
EURO-TEL, INC.
(Exact name of registrant as specified in its charter)
COLORADO
(State or other jurisdiction of incorporation)
0-21851 84-1189040
(Commission File No.) (IRS Employer
Identification No.)
2851 South Parker Road, Suite 720
Aurora, Colorado 80014
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 671-8920
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Item 2. Acquisition and Disposition of Assets.
Effective April 29, 1997, Euro-Tel, Inc. (the "Company")
entered into a letter of intent with PharmaSystems Cost Container
Corp. ("PSC"), a privately held Florida corporation, whereby the
Company has agreed in principle to acquire all of the issued and
outstanding shares of PSC in exchange for issuance by the Company
of previously unissued "restricted" common stock.
The relevant terms of the proposed transaction require the
Company to (i) undertake a "forward split" of its common stock,
whereby 4 shares of common stock will be issued in exchange for one
share of common stock; and (ii) issue to the PSC shareholders an
aggregate of 18,000,000 "restricted" common shares (post split),
representing approximately 90% of the Company's then outstanding
common stock, in exchange for all of the issued and outstanding
shares of PSC.
The proposed share exchange is subject to satisfaction of
certain conditions, including completion of due diligence
activities, the approval of the transaction by all of the
shareholders of PSC and the Company, and confirmation of the
financial condition of PSC by presentation of PSC audited financial
statements. The proposed transaction is expected to close
immediately after these conditions have been satisfied. If the
proposed transaction with PSC is consummated, the present officers
and directors of the Company are expected to resign their
respective positions with the Company, to be replaced by the
present management of PSC, or their designees. A copy of the
letter of intent between the Company and PSC is attached hereto as
Exhibit 2.0 and incorporated herein as if set forth.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
2.0 Letter of Intent between the Company and Pharma Systems
Cost Container Corp.
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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.
EURO-TEL, INC.
By:/s/ Andrew I. Telsey
Andrew I. Telsey,
President
Dated: May 2, 1997.
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EURO-TEL, INC.
-------------------------
EXHIBIT 2.0
-------------------------
LETTER OF INTENT BETWEEN
THE COMPANY AND
PHARMASYSTEMS COST CONTAINER, INC.
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EURO-TEL, INC.
2851 S. Parker Road, Suite 720
Aurora, Colorado 80014
April 22, 1997
Board of Directors
Pharma Systems Cost Container Corp.
7350 NW 7th St., #104
Miami, FL 33126
Attention: Dr. Jose L. Rodriguez, President
Re: Plan of Reorganization Between Euro-Tel, Inc.
and PharmaSystems Cost Container Corp.
Dear Mr. Rodriguez:
This letter is intended to express the general terms of the Plan of
Reorganization to be formalized between Euro-Tel, Inc., a Colorado
corporation ("ETI") and PharmaSystems Cost Container Corp., a
Florida corporation ("Pharma"). The objective of our discussions
has been the execution and consummation of applicable, formal
Agreement(s) between ETI and Pharma (the "Exchange Agreements")
which, among other things, would provide for the various matters
set forth below.
1. Plan of Reorganization and Reorganization of the
Companies. The board of directors of ETI and Pharma have completed
an initial evaluation of the business plan, financial statements
and other relevant corporate documents of the other and have
concluded that a reorganization of Pharma and ETI, whereby ETI
would issue shares of its Common Stock equal to ownership of
approximately 90% of its outstanding shares in exchange for 100% of
the then outstanding securities of Pharma would be in the best
interest of both companies. It is the intent of the parties hereto
that the proposed reorganization of Pharma and ETI be effected as
a tax-free exchange pursuant to Section 368 of the Internal Revenue
Code of 1986, as amended.
2. Terms of Reorganization.
(A) ETI Capitalization. ETI's total authorized capital
stock consists of 100,000,000 shares of Common Stock, no par value
per share and 25,000,000 shares of Preferred Stock, par value $.01
per share. As of the date hereof there are 500,000 Common Shares
of ETI issued and outstanding. There are no Preferred Shares
issued or outstanding.
Prior to the Closing Date, as defined hereinbelow, the Board of
Directors of ETI shall undertake a forward split of the ETI issued
and outstanding Common Stock, whereby 4 shares of Common Stock
shall be issued in exchange for each share of Common Stock
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Dr. Jose L. Rodriguez
Pharma Systems Cost Container Corp.
April 22, 1997
Page 2
presently issued and outstanding, in order to establish the number
of issued and outstanding Common Shares of ETI at the Closing Date
to be 2,000,000 shares.
(B) Pharma Capitalization. Pharma's total authorized
capital consists of 5,000,000 Common Shares, par value $0.001 per
share. As of the date of this letter agreement, there are
2,163,501 shares of Pharma's Common Stock issued and outstanding.
As of the date of Closing (as herein defined), Pharma shall have no
more than 5,000,000 shares of its common stock issued and
outstanding.
(C) Exchange Terms. At the Closing, the exchange shall
occur as follows:
(i) Each Share of Pharma Common Stock will be converted
into shares of ETI Common Stock on a pro rata basis to
their respective holdings in Pharma.
(D) Special Board and Shareholder Meetings.
(i) Prior to Closing, the Board of Directors of ETI will
call a special meeting of the ETI shareholders, or
otherwise obtain the written consent of its shareholders,
for the purposes of: (a) ratifying the transaction
proposed herein; (b) amending the ETI Articles of
Incorporation, to change the name of ETI to Pharma
Systems Holding Corp. or such other name as may be
available and acceptable to the present Pharma Board of
Directors; (c) providing any applicable dissenter's
rights afforded to the ETI Shareholders pursuant to the
laws of the State of Colorado; and (d) undertaking to
include any additional amendments to the ETI Articles of
Incorporation reasonably requested by the Pharma Board of
Directors in a timely manner and acceptable to the ETI
Board of Directors.
(ii) Prior to Closing, the Board of Directors of Pharma
will undertake all action necessary pursuant to the laws
of Florida in to effectuate the transaction proposed
herein, including but not limited to calling for a
special meeting of the Pharma Shareholders for the
purposes of ratifying the transaction proposed herein and
shall take all additional action necessary to cause the
intent of this letter to be adopted and ratified.
(E) Share Exchange. Subject to the approval of the
terms and conditions contained herein by the ETI and Pharma
shareholders (the "Closing" or the "Closing Date"), Pharma shall
consummate a
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Dr. Jose L. Rodriguez
Pharma Systems Cost Container Corp.
April 22, 1997
Page 3
reorganization with ETI by the Pharma shareholders exchanging all
of the issued and outstanding Pharma Stock owned by them for an
aggregate of 18,000,000 "restricted" Common Shares of ETI (post
forward split), with ETI emerging as the parent company and Pharma
being dissolved by operation of law.
(F) Officers and Directors. At Closing, the present
officers and directors of ETI shall deliver to Pharma their
respective letters of resignation, along with certified minutes of
the ETI Board of Directors accepting such resignation and
appointing to the ETI Board those persons designated by Pharma to
be officers and directors of the surviving entity herein.
3. Financial Condition of ETI. Except as provided herein, as
of the Closing Date, ETI balance sheet will reflect no assets or
liabilities.
4. Financial Condition of Pharma. Pharma hereby represents
and warrants that its audited balance sheet dated December 31, 1996
will reflect, in US Dollars, total assets of $1,691,981, a capital
deficiency of $(773,148) and a net loss for its most recent fiscal
year of $(2,138,575). Pharma further represents and warrants that
no negative material changes to its financial statements have
occurred since the end of its last fiscal year.
5. Conditions to Closing.
(A) Closing. The Closing of the transaction proposed
herein shall take place as soon as practical after the following
conditions, in addition to other customary conditions, have been
satisfied: (i) the terms of the reorganization have been approved
by the requisite vote of its shareholders; and (ii) the
reorganization has been approved by a requisite number of Pharma's
security holders. The Closing shall take place in Aurora, Colorado
at the offices of legal counsel for ETI, Andrew I. Telsey, P.C.,
2851 S. Parker Road, Suite 720, Aurora, Colorado 80014, or such
other location as the parties may so agree. At the discretion of
the parties hereto, Closing may also occur via telephonic means.
(B) To Be Provided by Pharma. As soon as possible, but
in no event later than the Closing Date, in addition to those items
which may be required to be delivered pursuant to the terms of the
applicable Exchange Agreements, Pharma shall provide to the present
Board of Directors of ETI the following:
i) a financial audit of its books as of the end of its
last fiscal year and unaudited financial statements for
those
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Dr. Jose L. Rodriguez
Pharma Systems Cost Container Corp.
April 22, 1997
Page 4
interim periods required to be provided the SEC under
Regulation SB or SK, as applicable and as promulgated
under the Securities Act of 1933, as amended which shall
be prepared in accordance with Generally Accepted
Accounting Principles. The audited financial statements
shall be provided by an independent, SEC Certified Public
Accountant and such audit shall demonstrate balance sheet
information consistent with the financial information
provided to ETI by Pharma prior to Closing; and
ii) an investment letter in a form acceptable to counsel
to ETI, duly executed by each Pharma shareholder,
acknowledging that each such shareholder is exchanging
their respective securities of Pharma for their pro rata
applicable number of ETI Common Shares, that such shares
to be acquired by each Pharma shareholder are solely for
their account and for investment and they have no plan,
intention, contract, understanding, agreement or
arrangement with any person to sell, assign, pledge,
hypothecate or otherwise transfer to any person such
shares, or any portion thereof.
(C) Non-Delivery. Failure by Pharma to provide those
items described hereinabove, or failure of said audit to confirm
the financial condition of Pharma as previously represented herein,
shall render this proposed transaction voidable at the discretion
of the present Board of Directors of ETI.
(D) Representations of ETI. ETI hereby represents that,
as of the Closing Date, it shall be current in all filings required
to be tendered to the Securities and Exchange Commission ("SEC")
pursuant to the Securities Exchange Act of 1934, as amended,
including but not limited to, filings on Forms 8-K, 10-K, 10-KSB,
10-Q and/or 10-QSB.
(E) Private Sale of ETI Common Stock. Subsequent to
Closing, some of the current inside shareholders of ETI may sell
some or all of their ETI Common Shares owned by them, subject to
the exemptions, restrictions, terms and limitations applicable to
such sales under state and federal securities laws. No sales of
any of the issued and outstanding securities of ETI shall be made
prior to Closing.
6. Default. Assuming the execution of a definitive
reorganization agreement by ETI and Pharma, in the event Pharma
fails to perform pursuant to Paragraph 9, below, or otherwise close
the transaction without the fault of ETI, Pharma shall be
responsible for payment of all reasonable costs incurred by ETI,
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Dr. Jose Rodriguez
Pharma Systems Cost Container Corp.
April 22, 1997
Page 5
including but not limited to attorneys fees, due diligence costs,
costs related to proxy solicitation, if any and such other costs as
may be incurred directly relating to this proposed transaction.
Pharma shall be responsible for payment of its own legal,
accounting and any other out-of-pocket expenses reasonably incurred
in connection with this transaction, whether or not this
transaction is consummated.
7. Confidentiality. Upon the signing of this Letter of
Intent, ETI and Pharma will provide to each other full access to
their books and records and will furnish financial and operating
data and such other information with respect to their business and
assets as may reasonably be requested from time to time. If the
proposed transaction is not consummated, all parties shall keep
confidential any information (unless ascertainable from public
filings or published information), obtained concerning the other's
operations, assets and business.
8. Retainer of Counsel. As a material condition hereto, upon
execution hereof by Pharma, Pharma shall cause to be tendered a
non-refundable fee of $25,000, payable in two installments, the
first installment upon execution of this letter and the balance
upon Closing, as defined herein, to Andrew I. Telsey, P.C., counsel
to ETI, in order to allow such counsel to commence preparation of
all SEC filings and other related documentation necessary to allow
ETI to comply with the rules and regulations necessary to
consummate the transaction proposed herein.
9. Finders Fees. It is hereby acknowledged that each party
hereto may be responsible for payment of certain finders fees
relating to the transaction proposed herein and that as a further
condition to Closing, as defined herein, each party shall warrant
in such Closing documents that such finders fees have been, or will
be, paid and further, shall indemnify and hold harmless the other
party from such obligation.
10. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
11. Jurisdiction. It is the intention of the parties that
the laws of the State of Colorado govern the determination of the
validity of this Agreement, the construction of its terms and the
interpretation of the rights and duties of the parties.
12. Notices. Any notice relevant herein shall be deemed to
have been sufficiently served for all purposes if delivered
personally
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Dr. Jose L. Rodriguez
Pharma Systems Cost Container Corp.
April 22, 1997
Page 6
to the party to whom the same is directed, or, if sent, by deposit
with the United States mail, certified mail, return receipt
requested postage prepaid, at such party's address listed
hereinabove, or to such other address as shall be furnished in
writing by any party to the other. any such notice shall be deemed
to be given three (3) days after deposited in the U.S. mail.
13. Further Action. Each party shall execute and deliver
such papers, documents and instruments, and perform such acts as
are necessary or appropriate to implement the terms hereof and the
intent of the parties hereto.
14. Amendments. This Agreement may only be amended by the
mutual consent of all the parties hereto which Amendment shall be
in writing, duly executed by the parties.
Except for the agreements set forth in Paragraphs 7, 8 and 9
hereof, this letter is not intended as a contract or to create any
enforceable rights or obligations whatsoever on the part of either
party. No obligations on the part of either party with respect to
the matters covered hereby (other than as set forth in Paragraphs
7, 8 and 9 hereof) shall exist unless and until a written
agreement, satisfactory in form and substance to both parties, has
been approved by their respective boards of directors and
shareholders, if necessary and executed by officers specifically
authorized to do so.
If the foregoing accurately reflects your understanding of the
terms and conditions of our agreement please so indicate by signing
below as designated.
Yours truly,
EURO-TEL, INC.
By: /s/ Andrew I. Telsey
Andrew I. Telsey, President
APPROVED AND ACCEPTED this 29th day of April, 1997.
PHARMASYSTEMS COST CONTAINER CORP.
By: /s/ Dr. Jose L. Rodriguez
Dr. Jose L. Rodriguez, President
