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SECURITIES EXCHANGE AND 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 (Date of earliest event reported): July 18, 2000
FORTEL INC.
(formerly Zitel Corporation)
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation)
0-12194 94-2566313
(Commission File No.) (IRS Employer Identification No.)
46832 LAKEVIEW BOULEVARD
FREMONT, CALIFORNIA 94538
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (510) 440-9600
1.
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ITEM 5. OTHER EVENTS
On July 18, 2000, FORTEL Inc. entered into a Securities Purchase
Agreement with two institutional purchasers under which it sold 2,191,781 shares
of its authorized but unissued common stock for a gross purchase price of
$5,000,000. The purchase price per share was equal to the average closing bid
price of the common stock as reported by Bloomberg Information Services, Inc. on
the five trading days prior to the transaction.
The purchasers also received Repricing Warrants for each share of
common stock purchased which expire after eighteen months and terminate (1) upon
disposition of the related shares of common stock by the purchasers, and (2)
after the per share closing bid price of the common stock, as reported by
Bloomberg, has been equal to or greater than $4.5625 for twenty two consecutive
trading days following the effective date of a registration statement
registering the share for resale by the purchasers.
The Repricing Warrants may be exercised at a price of $.001 per share
on any day on which the average of the two lowest closing bid prices of the
common stock, as reported by Bloomberg, on the ten trading days prior to the
exercise date is lower than $2.7375 per share. The number of shares issuable
upon each exercise is equal to (a) the number of shares as to which the warrant
has been exercised multiplied by (b) the difference between $2.7375 and such
lower average price divided by such lower average price.
FORTEL also entered into a Registration Rights Agreement with the
purchasers under which it agreed to register for resale under the Securities Act
of 1933, as amended, the shares of common stock sold on July 18, 2000 and any
shares which may be issued upon exercise of the Repricing Warrants.
The foregoing constitutes only a summary of certain of the terms of the
Securities Purchase Agreement, Registration Rights Agreement and Repricing
Warrants, copies of which are attached as Exhibits to this Report. Readers are
urged to review those Exhibits for the full terms and conditions of those
agreements.
ITEM 7. EXHIBITS
(c) The following exhibits are furnished in accordance with the
provisions of Item 601 of Regulation S-K:
Exhibit 10(a) Securities Purchase Agreement dated as of
July 18, 2000
Exhibit 10(b) Registration Rights Agreement dated as of
July 18, 2000
Exhibit 10(c) Form of Repricing Warrants dated as of
July 18, 2000
2.
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SIGNATURE
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, thereunto duly authorized.
FORTEL INC.
Dated: July 27, 2000 By: /s/
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Anna M. McCann
Chief Financial Officer
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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10(a) Securities Purchase Agreement
10(b) Registration Rights Agreement
10(c) Form of Repricing Warrants
3.
