EXHIBIT 99.1
NEWS RELEASE
NASDAQ SYMBOL: MRGO
FOR IMMEDIATE RELEASE
CONTACTS: Alfonso Ortega
(787) 883-2570, Ext. 33
MARGO CARIBE, INC.
ENTERS INTO AGREEMENT TO SELL ITS SUBSIDIARIES
Vega Alta, Puerto Rico, July 7, 2000 - Margo Caribe, Inc. ("Margo")
(NASDAQ Symbol: MRGO) announced that it has entered into an agreement, dated as
of June 30, 2000, to sell all of the shares of common stock owned by Margo in
its subsidiaries (except for the shares of iTract, Inc.) and certain proprietary
rights to Empresas Margo, Inc. ("Empresas Margo"). Under the agreement, Empresas
Margo will pay to Margo $5,000,000 and assume the outstanding debt of Margo
(after application of the cash collateral securing this debt). As of May 31,
2000, the outstanding principal amount of the debt to be assumed was
approximately $800,000.
As previously announced, Margo has entered into an agreement to merge
with iTract, LLC ("iTract"), a privately held early-stage internet company.
Under the merger agreement, Margo would first reincorporate as a Delaware
corporation pursuant to a merger with iTract, Inc., a newly-formed Delaware
corporation. The sale of Margo's existing nursery and other subsidiaries is a
condition to the consummation of the merger with iTract. It is also a condition
to the merger with iTract that Margo have at least $5,000,000 in cash and not be
subject to liabilities exceeding $10,000 in the aggregate at the effective time
of the merger. The sale to Empresas Margo is designed to satisfy these
conditions to the iTract merger.
Empresas Margo is a newly organized Puerto Rico corporation. Michael J.
Spector, the Chairman of the Board, Chief Executive Officer and President of
Margo, owns all of the outstanding capital stock of Empresas Margo and will act
as its Chief Executive Officer.
The sale of the subsidiaries is expected to close during the third
quarter of 2000, immediately prior to Margo's proposed merger with iTract, Inc.
and the merger of a subsidiary of iTract, Inc. with iTract. The sale of the
subsidiaries is subject to the satisfaction of various other conditions,
including the approval by the majority of Margo's shareholders and the
satisfaction of the conditions to the merger with iTract. Michael J. Spector
intends to vote his Margo shares, representing approximately 66% of Margo's
outstanding common stock, in favor of the proposed sale of the
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subsidiaries to Empresas Margo. No assurance can be given that the parties will
be able to satisfy the conditions to the sale of the subsidiaries.
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 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 Registration Statement filed by iTract, Inc. with the
Securities and Exchange Commission and 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 sale of the subsidiaries to Empresas Margo and
the iTract merger. iTract, Inc. has filed a Registration Statement on SEC Form
S-4 on July 3, 2000 in connection therewith but the Registration Statement has
not yet become effective. The securities covered by the Registration Statement
may not be sold nor offers to buy be accepted prior to the time the Registration
Statement becomes effective. This news release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state.
Investors and security holders are advised to read the Registration
Statement and the proxy statement/prospectus when it becomes available, because
they will contain important information about iTract, Margo, the proposed
transactions 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 and iTract, Inc. 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 Margo Caribe, Inc., Investor Relations
Dept., P.O. Box 706, Dorado, P.R. 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 proposed transactions. A description of any
interest that Margo's directors and executive officers have in these
transactions will be available in the proxy statement/prospectus.
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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
