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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13
or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): April 12, 2000
MARGO CARIBE, INC.
(Exact name of registrant as specified in this charter)
PUERTO RICO 0-15336
(State or other jurisdiction of (Commission File No.)
incorporation)
66-0550881
(IRS Employer Identification No.)
ROAD 690, KILOMETER 5.8 VEGA ALTA, PUERTO RICO 00692
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (787) 883-2570
(Former Name or Former Address, if changed since last report)
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ITEM 5. OTHER EVENTS
On April 12, 2000, Margo Caribe, Inc. issued a press release, a copy of
which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORM, FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Press release issued by Margo Caribe, Inc. on
April 12, 2000
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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.
MARGO CARIBE, INC.
By: /s/ Michael J. Spector
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Michael J. Spector
President and Chief Executive Officer
Date: April 12, 2000
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
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99.1 Press release issued by Margo Caribe, Inc. on April 12, 2000
EXHIBIT 99.1
NEWS RELEASE
NASDAQ SYMBOL: MRGO
FOR IMMEDIATE RELEASE
CONTACTS: Michael Spector Alfonso Ortega
(787) 883-2570, Ext. 31 (787) 883-2570, Ext. 33
MARGO CARIBE, INC.
ANNOUNCES EXECUTION OF
MERGER AGREEMENT WITH ITRACT, LLC
Vega Alta, Puerto Rico, April 12, 2000 - Margo Caribe, Inc. ("Margo") (NASDAQ
Symbol: MRGO) announced today that it has entered into an agreement to merge
with iTract, LLC ("iTract"), a privately held developmental-stage internet
company building a communication tool that is designed to allow its users to
deliver rapidly a targeted marketing campaign using e-mail, fax and postal mail.
Under the merger agreement, Margo would first reincorporate as a
Delaware corporation pursuant to a merger (the "Reincorporation Merger") with a
newly-formed Delaware corporation, with common stockholders of Margo receiving
one share of the new corporation for each share of common stock of Margo held
immediately prior to the Reincorporation Merger. A subsidiary of the new
Delaware corporation would then merge with iTract (the "iTract Merger" and
together with the Reincorporation Merger hereinafter referred to as the
"Transaction"). As a result of the iTract Merger, the holders of iTract
securities will be issued shares of common stock of the new Delaware corporation
representing approximately 86.8% of the outstanding shares of the new
corporation (on a fully diluted basis assuming exercise of all outstanding stock
options). Thus, following the iTract Merger, Margo shareholders, on a fully
diluted basis, would hold 13.2% of the new Delaware corporation. Prior to the
effective time of the merger, all outstanding stock options held by officers,
directors and employees of Margo will vest and become immediately exercisable.
The Board of Directors of the merged company will be composed of designees of
iTract, and iTract's management will manage the merged company. The merger
agreement does not provide for any break-up fee, other than reimbursement of
certain expenses. The exchange of Margo shares for shares of common stock in the
new Delaware corporation as part of the Reincorporation Merger will be a taxable
transaction for U.S. shareholders for federal income tax purposes.
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It is a condition to the consummation of the iTract Merger that Margo
sell its nursery and other operating businesses prior to the iTract Merger. In
addition, as of the effective time of the iTract Merger, Margo must have at
least $5 million in cash and cash equivalents and not be subject to liabilities
exceeding $10,000 in the aggregate. The Company is currently seeking purchasers
for these businesses.
The Transaction is expected to close during the third quarter of 2000,
subject to the satisfaction of various other conditions, including the approval
of the Transaction by the majority of Margo's shareholders, the qualification of
the iTract Merger as a tax-free exchange for federal income tax purposes, the
qualification of the Reincorporation Merger as a tax-free reorganization for
Puerto Rico income tax purposes, the registration of the shares to be issued in
the iTract Merger, listing of the shares of the new Delaware corporation on the
NASDAQ Small Cap Market, and various other customary conditions. Concurrently
with the execution of the merger agreement, Michael J. Spector agreed to vote
his Margo shares, representing approximately 66% of Margo's outstanding common
stock, in favor of the Transaction. No assurance can be given that the parties
will be able to satisfy the conditions to the consummation of the Transaction.
About Margo
Margo Caribe, Inc. is currently engaged in the business of growing and
distributing a wide range of both indoor and outdoor tropical foliage and
flowering plants in Vega Alta and Barranquitas, Puerto Rico. The Company is also
engaged in the sale of lawn and garden products, the provision of landscaping
services and maintenance throughout Puerto Rico and the Caribbean and the
manufacture of potting soils and other lawn and garden bag goods under the Rain
Forest trade name.
About iTract
Founded by its Chairman, Henry Kauftheil, iTract is a privately-held
developmental-stage company that will seek to address the needs of businesses
that desire more efficient, expedient and cost-effective ways to promote and
communicate products and services to their target audiences. iTract will target
small to medium sized businesses that want to reach potential customers at a
lower cost than traditional direct marketing. iTract's system is designed to
allow users to send out faxes, e-mails and postal mail in volume from the same
document directly off the computer at the same time. iTract is also building a
permission-based fax and e-mail list that is demographically organized and can
be custom configured to meet the client's marketing needs. To date, iTract has
not earned any significant revenues.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995. Such statements are based on the current expectations and
beliefs of the management of Margo and are subject to a number of
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3
factors and uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements.
For a detailed discussion of these and other cautionary statements,
please refer to the proxy statement/prospectus to be filed by Margo as described
below, as well as Margo's filings with the Securities and Exchange Commission.
Where You Can Find Additional Information
Margo expects to mail a proxy statement/prospectus to its stockholders
containing information about the Transaction, and the new Delaware corporation
plans to file a Registration Statement on SEC Form S-4 in connection therewith.
Investors and security holders are advised to read the Registration Statement
and the proxy statement/prospectus regarding the Transaction when they become
available, because they will contain important information about iTract, Margo,
the Transaction and related matters. Investors and security holders may obtain a
free copy of the Registration Statement and the proxy statement/prospectus (when
available) and other documents filed by Margo at the Securities and Exchange
Commission's web site at HTTP://WWW.SEC.GOV. Free copies of the proxy
statement/prospectus and such other documents may also be obtained from Margo by
directing such requests to the following address: Margo Caribe, Inc., Investor
Relations, P.O. Box 706, Dorado, Puerto Rico 00646.
Margo, its directors, executive officers and certain other members of
management and employees may be soliciting proxies from Margo stockholders in
favor of the adoption of the Transaction. A description of any interest that
Margo's directors and executive officers have in the Transaction will be
available in the proxy statement/prospectus.
Filed by Margo Caribe, Inc. pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange
Act of 1934.
Subject Company: Margo Caribe, Inc. Commission File No. 0-15336
