UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) July 24, 2008
MAGNA-LAB, INC.
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(Exact name of Registrant as Specified in its Charter)
New York 0-21320 11-3074326
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(State or Other Jurisdiction (Commission file Number) (IRS Employer
of Incorporation) Identification No.)
6800 Jericho Turnpike, Ste. 120W, Syosset, New York 11791
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (516) 393 5874
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 1 - Registrant's Business and Operations
Item 1.01 - Entry into a Material Definitive Agreement.
On July 24, 2008, we entered into an Agreement and Plan of Merger with
Belle Haven Partners, LLC under which a newly formed company ("IG Metals
Acquisition Corporation") formed by Belle Haven for the purpose of acquiring all
of the outstanding stock of Worldwide Equities, Inc., a Florida corporation
("WWE"), would be merged into a newly formed wholly owned subsidiary of our
company formed solely for the purpose of facilitating the merger. WWE, through
its wholly-owned subsidiary, International Global Metals, Inc., is focused on
scrap metal recycling, with an emphasis on reselling and processing ferrous and
non-ferrous scrap metal. The agreement is effective as of July 11, 2008.
If the merger is completed, the stockholders of IG Metals Acquisition
Corporation, who would be treated as the "acquiring company" for accounting and
financial reporting purposes," will own 96.5% of our outstanding shares on a
fully diluted basis. The ratio at which each share of IG Metals Acquisition
Corporation would convert into newly issued shares of our company has not yet
been fixed.
The merger is contingent upon a number of things including, with
limitation, IG Metals Acquisition Corporation raising $29 million in capital
(which is anticipated to be principally debt) to finance its acquisition of WWE
and consummation of that acquisition by September 30, 2008 (extendable to
November 29, 2008 under certain circumstances provided our transaction costs up
to $50,000 are reimbursed). The merger is also contingent on our company's
liabilities (other than liabilities assumed or indemnified as provided in
clauses (iii) and (iv) below) not exceeding $325,000, which will likely only be
achievable by (i) our company raising additional equity prior to closing, (ii)
our principal stockholder, who is also our principal debtholder, agreeing to
convert debt to equity, (iii) divesting our interest in certain residual MRI
technologies to our founder and assumption by our founder of associated
liabilities and (iv) obtaining indemnity from our principal stockholder for
certain liabilities, or some combination thereof. Issuance of additional equity
would be dilutive to existing stockholders. At May 31, 2008, we reported
liabilities of $416,000, roughly $100,000 of which is associated with the MRI
technologies referred to in the preceding clause (iii).
We have the right to terminate the agreement under certain circumstances,
some of which circumstances would entitle us to reimbursement of up to $50,000
in transaction costs. Among the events triggering our termination right is our
determination that based on our diligence investigation the transaction is not
in the best interests of our shareholders. Belle Haven and IG Metals Acquisition
Corporation have the right to terminate the agreement under certain
circumstances, such as breach by us of a representation, warranty or covenant,
some of which circumstances would entitle them to reimbursement of their
transaction costs up to a similar cap. Neither party is to have liability to the
other for a breach of, or failure to consummate the transactions contemplated
by, the agreement, except in circumstances requiring expense reimbursement and
then only to the extent of the $50,000 cap. To secure their expense
reimbursement obligations, Belle Haven and IG Metals Acquisition Corporation
have agreed to place $50,000 in escrow by August 11, 2008, or sooner if and when
an agreed amount of funds are raised.
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.
MAGNA-LAB, INC.
Date: July 25, 2008 By: /s/ Kenneth C. Riscica
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Kenneth C. Riscica
Treasurer and Secretary