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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
March 23, 2000
Date of Report
(Date of Earliest Event Reported)
CAPITAL GROWTH, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada 33-24138-D 87-0463772
(State or other juris- (Commission File No.) (IRS Employer
diction of incorporation) I.D. No.)
55 West 200 North
Provo, Utah 84601
(Address of Principal Executive Offices)
(801) 377-1758
Registrant's Telephone Number
Item 1. Changes in Control of Registrant.
See Item 7, Exhibits.
Item 2. Acquisition or Disposition of Assets.
See Item 7, Exhibits.
Item 3. Bankruptcy or Receivership.
None; not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
None; not applicable.
Item 5. Other Events.
On March 21, 2000, the Company signed a Letter of Intent providing
for the execution and consummation of a formal agreement (the "Plan") between
the Company and Imagenetix, Inc. ("Imagenetix") pursuant to which the Company
will acquire 100% of the issued and outstanding common stock of Imagenetix in
exchange for 7,975,000 shares of "unregistered" and "restricted" shares of the
Company's common stock.
No assurance can be given that the Plan will be completed as
contemplated.
Item 6. Resignations of Registrant's Directors.
None; not applicable.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
2 Letter of Intent signed as of March 21, 2000,
regarding proposed reorganization
99 Press Release regarding same dated March 22,
2000
Item 8. Change in Fiscal Year.
None; not applicable.
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.
CAPITAL GROWTH, INC.
Date: 3/23/2000 By:/s/ David N. Nemelka
--------------------------------------
David N. Nemelka
Sole Officer and Director
CAPITAL GROWTH, INC.
55 West 200 North
Provo, Utah 84601
Phone 801-377-1758
Fax 801-377-1773
March 17, 2000
Mr. Bill Spencer, President
Imagenetix, Inc.
16935 W. Bernardo Drive
Suite 101
San Diego, CA 92127
Phone: 858-674-8455
Fax: 858-674-8460
RE: Proposed Exchange of shares of Capital Growth, Inc.
("Acquiror") for all of the outstanding shares of
Imagenetix, Inc. ("Acquiree")
Dear Mr. Spencer:
This letter will confirm the recent discussions we have had with you
relative to the proposed exchange of shares of the common stock of Capital
Growth, Inc. ("Acquiror") for all of the issued and outstanding common stock
of Imagenetix, Inc. (Acquiree). The objective of our discussions has been the
execution and consummation, as soon as feasible, of a formal agreement between
Acquiror and Acquiree (the "Exchange Agreement") which, among other things,
would provide for the various matters set forth below.
Acquiror will acquire all of the issued and outstanding common stock of
Acquiree from the shareholders of Acquiree (which will include existing
shareholders, shareholders from a private placement raise, and certain
consultants) in exchange for a maximum of 7,975,000 shares of the common stock
of Acquiror ("Common Stock") which will be delivered upon the closing of this
transaction (the "Closing Date"). You will need to provide us with the names
and addresses of the shareholders as soon as possible. This transaction is
intended to qualify as a tax-free reorganization under Section 368 of the
Internal Revenue Code such that the shares of Acquiror received by the
shareholders of Acquiree will be received on a tax-free basis. The shares to
be issued by Acquiror will be "restricted securities" as defined in Rule 144
under the Securities Act of 1933, and an appropriate legend will be placed on
the certificates representing such shares, and stop transfer orders placed
against them. Also, at Closing, options or warrants of Acquiree will be
exchanged for a like amount of options or warrants of Acquiror. Such new
option pricing, terms, and conditions will mirror those of Acquiree after
adjusting for any stock splits. Additionally, a maximum of 375,000 options,
300,000 employee stock options, and 375,000 warrants of Acquiree will be
exchanged for a like amount of options and warrants of Acquiror.
Prior to or simultaneously with the closing, Acquiree will have completed a
Private Placement offering for a minimum of $750,000 and a maximum of
$5,000,000 in equity which funds shall be escrowed until the minimum is
raised.
At closing, Acquiror will be reorganized so that there will be 2,575,000
shares of Acquiror Common Stock outstanding. After the closing of this
transaction, there will be a maximum of 10,550,000 shares outstanding. If the
maximum is raised, the Closing ownership will be:
IMAGENETIX, INC. SHAREHOLDERS 5,475,000 Shares
PRIVATE PLACEMENT SHAREHOLDERS 2,500,000 Shares
From completion of a maximum $5,000,000
equity funding.
PUBLIC CO. SHAREHOLDERS 2,575,000 Shares
TOTAL 10,550,000 Shares
IMAGENETIX, INC. WARRANTHOLDERS
(Maximum warrants to CCRI) 375,000 Warrants
TOTAL 375,000 Warrants
IMAGENETIX, INC. OPTIONHOLDERS 375,000 Options
Total 375,000 Options
EMPLOYEE STOCK OPTIONS 300,000 Options
The 375,000 warrants will be non-cancelable and non-callable and exercisable
at $2.00 per share. The warrants will expire 5 years from the date of this
Closing. The 375,000 options will be non-cancelable and non-callable and
exercisable at $1.00 per share. The options will expire 5 years from the
date of this Closing and will carry a cashless exercise provision. The
employee stock options will be exercisable at $2.00 per share.
Simultaneously with the closing, the authorized common shares shall be
50,000,000 shares.
The current officers and directors of Acquiror will submit their resignation
as officers and directors effective on the Closing Date.
On the Closing Date, Acquiror will have $0 liabilities and $0 assets except as
set forth in its 12/31/99 Audited Financial Statements and/or interim
Financial Statements.
Other terms of the Exchange Agreement will include:
Acquiror shall be in good standing in its state of domicile and shall not be
in violation of any Federal or State securities or other laws governing
it.
Acquiror will be current in all of its filing requirements as to all tax,
securities or other reports required under laws to which it is subject,
and shall deliver copies of these reports to Acquiree along with copies
of its past and current audited financial statements.
Acquiror shall, at closing, be able to make customary representations,
including but not limited to, representations and warranties that it has
no liabilities and that it is not a party to any litigation.
There shall be no change in the current outstanding capital structure of
Acquiror including outstanding shares, options, warrants or related
matters, except referred to herein.
Acquiree shall be in good standing in its state of domicile and shall be duly
qualified to do business as a foreign corporation in those jurisdictions,
which require such qualification. Acquiree shall be free from any
material pending or threatened litigation, claims, or contingent
liabilities.
Acquiree shall be current and in good standing with respect to all material
contracts to which it is a party.
The proposed transaction shall not violate any contract, agreement or
arrangement to which Acquiree is a party.
Acquiree shall designate all persons to be elected to the Board of Directors
of Acquiror at closing subject to the Acquirors shareholders' approval,
and the name of Acquiror will be changed to a name selected by mutual
consent of Acquiror and Acquiree.
No officer, director or controlling shareholder of Acquiree shall have a
criminal record, bankruptcy, SEC censure, disbarment, loss of his/her
professional license or be under investigation for any of the above.
Acquiror's Legal Counsel will prepare updated information at closing for
submission to Standard & Poors ("S & P") for an S & P Listing for Blue-
Sky purposes or to update the existing listing.
Acquiror's Legal Counsel will prepare 15C211 materials immediately following
the closing of this transaction.
Acquiree will immediately engage legal counsel to assist in expediting the
closing of this transaction.
Acquiree agrees to cooperate in providing and explaining information with
respect to the transaction contemplated herein. The information to be
provided shall be sufficient to allow Acquiror to apprise its shareholders
of the business of Acquiree in compliance with the requirements of the
Federal Securities laws, as applicable.
Prior to closing, Acquiree shall provide audited financial statements and
interim GAAP financial statements as required since inception which have
been prepared in accordance with generally accepted accounting principles
("GAAP") and in compliance with Regulation S-X as promulgated by the
Securities and Exchange Commission.
As a condition to the Closing Acquiror will obtain majority shareholder
approval for the transaction.
As soon as practical after the execution hereof, Acquiror with Acquirees'
prior approval shall notify its shareholders of the proposed transaction.
Subsequent thereto, no party hereto shall release any information to the
public or the media without the consent of all other parties. Acquiror shall
submit to Acquiree, in advance of release, any proposed press release for its
reasonable prior approval.
After the closing of the Exchange Agreement:
Acquiree agrees to submit a timely completed Registration to the SEC and to
include shares, warrants, and options for resale of those shareholders,
warrant holders, and option-holders as agreed to between the Acquiror and
Acquiree. Acquiree will use its best efforts to keep the company and
such registration current for a period of no less than 12 months.
Acquiree agrees to update Market-Makers by submitting updated 15C211
information to them following the Closing.
Acquiree will submit the appropriate paperwork and fees to Standard & Poors in
order for the company's stock to be Blue-Skied for trading or updated for
continual trading.
Acquiree agrees that it will engage a financial public relations firm by the
closing date of this transaction who is mutually satisfactory to Acquiree
and the now existing Board of Directors of Acquiror. Such firm, or an
acceptable substitute firm, shall be continuously engaged for a minimum
of eighteen (18) months.
The parties hereto hereby agree to conduct their business in accordance with
the ordinary, usual and normal course of business heretofore conducted by
them. Thus, there may be no material adverse changes in the business of
any of the companies from the date hereof through the closing of this
transaction.
Acquiror has not engaged any brokers or finders with respect to this
transaction, and if Acquiree has or intends to use any broker or finder
other than those referred to in paragraph #3, Acquiree agrees to notify
Acquiror in writing and Acquiree agrees to be responsible for any fees or
other expenses of such broker or finder.
All parties hereto agree to take whatever reasonable steps are required to
facilitate the consummation of the transaction contemplated herein,
including providing of information regarding the corporate parties hereto.
Upon the signing of this Letter of Intent, Acquiror and Acquiree will provide
to each other full access to their books and records and will furnish
financial and operating data and such other information with respect to
their business and assets as may reasonably be requested from time to time.
If the proposed transaction is not consummated, all parties shall keep
confidential any information (unless ascertainable from public findings or
published information) obtained concerning the other's operations, assets
and business.
Upon the execution by you and return to us of this Letter of Intent, counsel
for Acquiror and Acquiree will prepare an Exchange Agreement, which shall
contain provisions in accord with this letter together with such further
appropriate terms and conditions as legal counsel and the parties may
mutually determine. The Exchange Agreement shall be subject to the
approval of the respective shareholders and boards of directors of Acquiror
and Acquiree.
It is understood that the terms set forth in this letter may not constitute
all of the major terms which will be included in the Exchange Agreement;
and that the terms set forth herein are subject to further discussion and
negotiation. This letter is non-binding. This Letter of Intent will be
null and void, if the proposed transaction has not been closed by May 31,
2000 or extended by both parties in writing.
If the foregoing accurately reflects our discussions, please execute and
return the undersigned one copy of this letter.
ACCEPTED AND AGREED TO MARCH 21, 2000
CAPITAL GROWTH, INC. IMAGENETIX, INC.
By: /s/ David Nemelka By: /s/ Bill Spencer
David Nemelka, President Bill Spencer, President
FOR IMMEDIATE RELEASE
CONTACT: Bill Spencer Jeff Ploen
Imagenetix J. Paul Consulting Corp.
(858) 674-8455 (303) 713-1629
www.imagenetix.net [email protected]
CAPITAL GROWTH, INC. ENTERS INTO LETTER OF INTENT
TO ACQUIRE IMAGENETIX, INC.
Provo, Utah - March 23, 2000 - Capital Growth, Inc. (OTCBB:CGTH) today
announced that it has entered into a letter of intent to acquire 100% of the
outstanding stock of Imagenetix, Inc. in exchange for newly issued stock of
Capital Growth. The proposed transaction, structured to qualify as a tax-free
reorganization, is subject to completion of a definitive agreement and will
require approval of the companies' respective boards of directors and
shareholders. A closing date is anticipated in mid-to-late May.
About Imagenetix, Inc.
Imagenetix, Inc. offers unique, competitively-priced and specifically
formulated nutrient-enriched products. Formed in January, 1999, Imagenetix has
acquired such top-tier domestic and international clients as Nikken, Noevir,
Rexall Showcase, Natrol, Nature's Way, Heritage Health, Natural Victory, and
others. Committed to the proposition that fully serving the client's needs
will ultimately pay top dividends, Imagenetix not only develops and formulates
a nutritional product, but also provides its clients with a commitment of
support throughout all phases of the life of the nutritional product line.
From the initial development of the product itself, to providing exclusive
formulas, to designing labels and brochures, Imagenetix paves the way. In
addition, the company will produce audio and video tapes in multiple
languages, assist in regulatory compliance, and assume the responsibility of
registering products to be sold internationally. Imagenetix also has the
capability of providing top-notch scientific and marketing personnel to serve
as speakers at client conventions to assist in the marketing of the products,
and in all ways to help assure the success of the client's product launch and
continued sales.
Imagenetix, Inc. is rapidly developing Globestar , its exclusive and
proprietary multi-media, global interlinking B to B commerce system.
Globestar will enable business clients to process orders and access real time
tracking information on their product orders. When fully functional,
Globestar will also permit clients, manufacturers, and scientists from around
the world to enter into select and confidential regions of the Globestar
system to input product information, such as unique products and technologies.
Globestar will serve as a global reference resource and will provide
information on the hard-to-find or breakthrough ingredients in the
nutraceutical industry as well as "the story" behind the development of
particular products or compounds. Additional features of Globestar will
allow for rapid registration of products in foreign countries on behalf of our
clients.
About Capital Growth, Inc.
Capital Growth, Inc. shareholders will be asked to approve a 1 for 2 reverse
split of Capital Growth stock simultaneously with the closing. The majority
shareholder of Capital Growth will cancel shares at closing, and the total
shares outstanding immediately following the closing is anticipated to be a
maximum of 10,550,000 shares.
Further details of the letter of intent can be reviewed by accessing the
Capital Growth 8K which can be viewed on the Edgar System at www.sec.gov.
Risk Disclosure
ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO
BE COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (THE "1995 ACT").
SHAREHOLDERS AND PROSPECTIVE SHAREHOLDERS SHOULD UNDERSTAND THAT SEVERAL
FACTORS GOVERN WHETHER ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN WILL BE
OR CAN BE ACHIEVED. ANY ONE OF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE PROJECTED HEREIN. THESE FORWARD-LOOKING
STATEMENTS INCLUDE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS,
INCLUDING PLANS AND OBJECTIVES RELATING TO THE PRODUCTS AND THE FUTURE
ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS RELATING TO THE FOREGOING
INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC,
COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS, AND THE TIME AND
MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS, ALL OF WHICH ARE
DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE BEYOND THE
CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE ASSUMPTIONS
UNDERLYING THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE REASONABLE, ANY
OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE, THERE CAN BE NO
ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE FORWARD-LOOKING
STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL EXPERIENCE AND
BUSINESS DEVELOPMENTS, THE IMPACT OF WHICH MAY CAUSE THE COMPANY TO ALTER ITS
MARKETING, CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN
AFFECT THE COMPANY'S RESULTS OF OPERATIONS IN LIGHT OF THE SIGNIFICANT
UNCERTAINTIES INHERENT IN THE FORWARD-LOOKING STATEMENTS INCLUDED HEREIN, THE
INCLUSION OF ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY
THE COMPANY OR ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY
WILL BE ACHIEVED.
