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SECURITIES AND EXCHANGE COMMISSION
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): June 19, 1997
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VITAFORT INTERNATIONAL CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 0-18438 68-0110509
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
Suite 480, 1800 Avenue of the Stars, Los Angeles, California 90067
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER,
INCLUDING AREA CODE: (310) 552-6393
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Not Applicable
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS
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On June 20, 1997, Vitafort International Corporation (the "Company")
received an Interim Award in a commercial arbitration between the Company and
The Keebler Company ("Keebler"). The arbitration principally related to the
Company's claims that Keebler had breached its contract with the Company by
producing defective products. The arbitrator determined that Keebler had
breached its contract with the Company and awarded the Company damages in the
amount of $5,983,923. The Interim Award denied all of Keebler's claims for
damages against the Company and granted the Company attorneys fees and costs, to
be determined based upon subsequent submissions by the parties. The terms of
the arbitration are that the decision of the arbitrator is final and binding.
Management is advised by its legal counsel that there are limited grounds for
seeking to vacate such an award and that courts rarely overturn arbitration
awards. However, there is no assurance that Keebler will not seek to overturn
the award. The Company is not informed what action Keebler intends to take and
cannot predict when the Company may receive the award proceeds. The Company
believes that the award will be deemed final when the legal expenses are
submitted and approved.
The Company financed a portion of its legal costs in connection with
the arbitration through a loan from ATCOLP INVESTMENT PARTNERS, a California
Limited Partnership (the "Lender), in which Donald Wohl, a Director of the
Company is the general partner, for a loan in the amount of $300,000 (the
"Loan"). The Loan bears interest at the lesser of 15% per annum or the highest
rate allowed by law with recourse solely to the net proceeds of the arbitration,
if any. The Loan provides that the Lender will receive a portion of the
proceeds of the award based on a formula set forth therein. The Loan was
approved by the disinterested members of the Company's Board of Directors, and
was on terms no less favorable to the Company then were available from non-
affiliated lenders. If the Company is awarded $300,000 for its legal fees and
costs and receives the $5,983,923 granted in the award, then it will owe the
Lender approximately $1,300,000 of the proceeds and the Company will realize net
proceeds of approximately $4,683,923 from the award. The Lender will also
receive warrants for the purchase of 200,000 shares of the Company's Common
Stock at $.01 per share.
The Company intends to use the proceeds of the Interim Award, when and
if received, towards its working capital requirements.
ITEM 7. FINANCIAL STATEMENTS, PRO-FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(a) FINANCIAL STATEMENTS OF BUSINESS TO BE ACQUIRED. Not applicable.
(b) PRO-FORMA FINANCIAL INFORMATION. Not applicable.
(c) EXHIBITS. None.
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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.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychok
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Mark Beychok,
Chief Executive Officer
Dated: July 7, 1997
