SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20509
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
December 31, 2002
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Date of Report
(Date of Earliest Event Reported)
CYBERTEL COMMUNICATIONS CORP.
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(Exact Name of Registrant as Specified in its Charter)
Nevada 0-26913 86-0862532
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(State or other (Commission File No.) (IRS Employer I.D. No.)
Jurisdiction)
2820 La Mirada Drive, #H
Vista, California 92083
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(Address of Principal Executive Offices)
(858) 646-7410
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Registrant's Telephone Number
Item 5. Other.
On March 26, 2002, the Board of Directors of Cybertel Communications
Corp. ("Cybertel" or the "Company") adopted resolutions pursuant to which the
Company entered into the following agreements with Alpha Capital
Aktiengesellschaft ("Alpha Capital"), as described below:
An 8% Convertible Note for the sum of $200,000 due March 26,
2007, convertible at the lesser of (i) $.216; or (ii) eighty
percent (80%) of the three lowest closing bid prices for the
common stock as reported by the NASD OTC Bulletin Board, NASDAQ
SmallCap Market, NASDAQ National Market System, American Stock
Exchange, New York Stock Exchange or "Pink Sheets"
(whichever of the foregoing is at the time the principal
trading exchange or market for the common stock, the
"Principal Market"), or if not then trading on a Principal
Market, such other principal market or exchange where the
common stock is listed or traded for the thirty trading days
immediately preceding but not including the conversion date;
A Common Stock Purchase Warrant for the right to purchase
200,000 shares of common stock of the Company exercisable
at a purchase price of $.33;
A related Subscription Agreement regarding the 8%
Convertible Note and the Common Stock Purchase Warrant,
granting, among other rights, registration rights of the
exercise and/or conversion of any of the notes and/or
warrants described and protection against dilution in certain
events, including the payment of dividends or splits or in
the event of any merger where we are not the survivor, or
any reclassification or capital reorganization; and
A related Fund Escrow Agreement respecting the disbursement
of the proceeds of the 8% Convertible Note and related
matters.
For information or additional terms of the foregoing, see the
copies of these agreements that are attached to the Company's 8-K Current
Report dated March 26, 2002, filed with the Securities and Exchange Commission
on April 4, 2002.
On December 31, 2002, Alpha Capital filed an action against
Cybertel entitled "Alpha Capital Aktiengesellschaft v. Cybertel Communications
Corp," Civil Action No. 01 CV 10335, (the "Action") in the United States
District Court, Southern District of New York (the "Court"), whereby Alpha
Capital asserted the following claims which arise out of or relate to the Note
and Subscription Agreement:
The principal due and owing under the Note in the amount of
$200,000;
The mandatory redemption payment pursuant to the Subscription
Agreement in the amount of $60,000;
Liquidated damages in the amount of $28,000; and
Late penalties in the amount of $12,300;
For total damages in the amount of $321,341.02, together with
attorneys' fees in the amount of $12,500.
Effective January 28, 2003, the Company and Alpha Capital entered
into a Settlement Agreement and Release ("Settlement Agreement") to resolve
the asserted claims pursuant to which Alpha Capital agreed to accept the sum
of $200,000, together with reasonable attorneys' fees in the amount of
$12,500, for an aggregate total of $212,500 (the "Compromised Amount").
Additionally, the Company agreed to issue and deliver to Sichenzia Ross
Friedman Ference LLP, as Escrow Agent, freely trading shares of its $0.01 par
value common stock ("Common Stock") sufficient to satisfy the Compromised
Amount pursuant to Section 3(a)(10) of the Securities Act of 1933 (the
"Securities Act"), pending the required Court hearing for use of Section
3(a)(10) as outlined below. The parties agreed that the value of the Common
Stock utilized to satisfy the Compromised Amount shall be discounted at 40% of
the closing bid price on January 28, 2003, which was $0.015 per share. Thus,
the value of the Common Stock to be utilized to satisfy the Compromised Amount
shall be $0.009 per share, and the total amount of Common Stock to be
delivered by the Company to satisfy the Compromised Amount shall be 23,611,111
shares of Common Stock (the "Settlement Shares"). The Settlement Agreement
also provided for the issuance of a Proxy in favor of the Company covering the
Settlement Shares. Additionally, as an alternative settlement, the Company,
at it's sole discretion, may pay Alpha Capital the full amount of all claims
in the amount of $333,841.02, together with interest thereon at the rate of
fifteen (15%) percent per annum from February 3, 2003, to the date of such
payment to Alpha Capital. In the event the Alternative Payment is made, the
Settlement Shares shall be returned to Cybertel for cancellation, the Proxy
shall be returned to Alpha Capital and Alpha Capital shall accept the
Alternative Payment in full satisfaction of all claims.
On execution of the Settlement Agreement, the parties agreed,
pursuant to 15 U.S.C. Section 77(a)(1), to immediately submit the terms and
conditions of the Settlement Agreement to the Court for a hearing on the
fairness of such terms and conditions for the issuance of an exemption from
registration of the Settlement Shares, under Section 3(a)(10) of the
Securities Act. Copies of the Settlement Agreement, the Proposed Order
Granting Approval of Settlement Agreement and the Stipulation of Dismissal are
attached hereto and incorporated herein by reference. See Item 7.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired.
None; not applicable.
(b) Pro Forma Financial Information.
None; not applicable.
Exhibits.
Exhibit
Number Description
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10.1 Subscription Agreement *
Exhibit A-Form of Note
Exhibit B-Form of Legal Opinion
Exhibit C-Form of Common Stock Purchase Warrant
Schedule 2(d)-Additional Issuances
Schedule 2(t)-Capitalization
Schedule 7(e)-Use of Proceeds
Schedule 10.1-Other Securities to be Registered
10.2 Funds Escrow Agreement *
10.3 Settlement Agreement and Release
Exhibit A- Proposed Order Granting Approval
of Settlement Agreement
Exhibit B- Stipulation of Dismissal
Exhibit C- Proxy
* Incorporated by reference from Current Report on Form 8-K
dated March 26, 2002, and filed April 4, 2002.
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.
CYBERTEL COMMUNICATIONS CORP.
Date: March 6, 2003 By:/s/ Richard D. Mangiarelli
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Richard D. Mangiarelli
CEO, President and Director