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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): May 14, 1999
ADVANCED HEALTH CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
005-48507 133893841
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(Commission File Number) (IRS Employer Identification No.)
555 White Plains Road, Tarrytown, NY 10591
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(Address of Principal Executive Offices) (Zip Code)
(914) 524-4705
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 14, 1999, Advanced Health Corporation d/b/a AHT Corporation
("AHT") completed the sale of its physician management services unit to
PractiCare, Inc., a wholly-owned subsidiary of Phoenix Home Life Mutual
Insurance Company, for $3.139 million in cash plus the assumption of certain
payables and capital leases associated with the unit, pursuant to an Asset
Purchase Agreement, dated as of May 14, 1999, by and among Advanced Health
Management Corporation and Integrated Medical Management, Inc. (subsidiaries of
AHT), AHT, and PractiCare, Inc.
A copy of AHT's press release, dated May 17, 1999, relating to the
above-described transaction is attached hereto as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) The following Pro Forma Consolidated Balance Sheet as of March 31,
1999 has been prepared to reflect the disposition transaction and the
adjustments described in the accompanying notes. The pro forma financial
information is based on the historical consolidated balance sheet of AHT
and its Subsidiaries (collectively, the "Company") and should be read in
conjunction with the notes and management assumptions with respect thereto. The
Pro Forma Consolidated Balance Sheet was prepared as if the disposition
transaction occurred on March 31, 1999. The pro forma financial information is
unaudited and not necessarily indicative of the consolidated results which
actually would have occurred if the disposition transaction had been
consummated at the beginning of the period presented, nor does it purport to
represent the future financial position and results of operations for future
periods.
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Advanced Health Corporation and Subsidiaries
Pro Forma Consolidated Balance Sheet (unaudited)
March 31, 1999 (dollars in thousands)
<TABLE>
<CAPTION>
Pro Forma Pro
Historical Adjustments Forma
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<S> <C> <C> <C>
ASSETS
Cash and cash equivalents 3,634 2,480(a) 6,114
Restricted Cash 3,230 450(a) 3,680
Investment in marketable securities 8,732 8,732
Accounts receivable, net 239 239
Other current assets 474 474
Net current assets from discontinued operations 1,097 (944)(b) 153
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Total current assets 17,406 1,986 19,392
PROPERTY AND EQUIPMENT, net 2,417 2,417
INTANGIBLE ASSETS, net 1,851 1,851
INVESTMENTS IN AFFILIATES 14,000 14,000
OTHER ASSETS 1,940 1,940
OTHER ASSETS FROM DISCONTINUED OPERATIONS 2,739 (1,830)(b) 909
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Total assets 40,353 156 40,509
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities 2,680 2,680
Other current liabilities 1,006 1,006
Other current liabilities from discontinued operations 7,873 (1,814)(b,c,d) 6,059
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Total current liabilities 11,559 (1,814) 9,745
DEFERRED REVENUE 523 523
NET LIABILITIES FROM DISCONTINUED OPERATIONS 221 (221)(b)
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Total liabilities 12,303 (2,035) 10,268
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COMMITMENTS
SHAREHOLDERS' EQUITY
Preferred Stock, $.01 par value, 5,000,000 shares
Authorized; 0 shares issued and outstanding
Common stock, $.01 par value; 15,000,000 shares
Authorized; 10,480,029 shares issued and outstanding 104 104
Additional paid-in capital 108,600 108,600
Accumulated deficit (80,267) 2,191 (a) (78,076)
Unrealized gain on marketable securities, net of deferred income tax 2 2
Less: Treasury stock, at cost (153,937 shares) (389) (389)
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Total shareholders' equity 28,050 2,191 30,241
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Total liabilities and shareholders' equity 40,353 156 40,509
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</TABLE>
The accompanying notes and management's assumptions to the pro forma
consolidated balance sheet are an integral part of the balance sheet.
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ADVANCED HEALTH CORPORATION
NOTES AND MANAGEMENT'S ASSUMPTIONS
TO PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
On May 14, 1999, the Company completed the sale of its physician
management services unit to PractiCare, Inc. for $3.139 million in cash plus the
assumption of certain payables and capital leases associated with the unit,
pursuant to a Asset Purchase Agreement, dated as of May 14, 1999, by and among
Advanced Health Management Corporation and Integrated Medical Management,
Inc.(subsidiaries of AHT), AHT, and PractiCare, Inc. (the "Asset Purchase
Agreement".)
The accompanying unaudited pro forma consolidated balance
sheet is presented as if the disposition transaction occurred on March 31, 1999.
This pro forma balance sheet should be read in conjunction
with the historical financial statements and notes thereto of the Company as of
March 31, 1999. In management's opinion, all material adjustments necessary to
reflect the effects of the disposition transaction by the Company have been
made.
The unaudited pro forma consolidated balance sheet is not
necessarily indicative of the actual financial position of the Company as of
March 31, 1999.
2. UNAUDITED PRO FORMA ADJUSTMENTS:
A description of the adjustments included in the unaudited pro forma
statements are as follows:
(a) To reflect the proceeds of the sale of the unit which includes $450,000
held in escrow and restricted by the terms of the escrow agreement
pending the determination, six months from the date of the agreement,
of the net realized assets transferred pursuant to the terms of the
Asset Purchase Agreement.
(b) To record assets and liabilities assumed by PractiCare, Inc.
(c) To adjust accrued liabilities assumed by PractiCare, Inc.
(d) To reflect the immediate liquidation of liabilities retained by the
Company out of the net cash proceeds from the sale of the unit based on
the terms of the Asset Purchase Agreement. In addition, the Company's
pro forma balance sheet does not include additional future payments to
be made in connection with the disposition transaction amounting to
$1,929,000.
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(c) Exhibits:
99 Press Release issued by AHT dated May 17, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADVANCED HEALTH CORPORATION,
d/b/a AHT CORPORATION
Date: June 1, 1999 By: /s/ Jeffrey M. Sauerhoff
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Jeffrey M. Sauerhoff
Chief Financial Officer
EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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99 Press Release issued by AHT dated May 17, 1999
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EXHIBIT 99
FOR IMMEDIATE RELEASE
Contact: Arthur Dague
(914) 524-4783
[email protected]
AHT CORPORATION ANNOUNCES SALE OF ITS
PHYSICIAN MANAGEMENT SERVICES UNIT
AHT'S BUSINESS NOW EXCLUSIVELY FOCUSED ON
INTERNET-BASED CLINICAL E-COMMERCE
TARRYTOWN, NY, MAY 17, 1999 - AHT Corporation (Nasdaq: AHTC) announced today the
sale of its physician management services unit to PractiCare, Inc., a
wholly-owned subsidiary of Phoenix Home Life Mutual Insurance Company, for
approximately $3.1 million in cash plus the assumption of certain payables and
capital leases associated with the unit. The sale of the physician management
services unit enables AHT to focus entirely on the growth of its Internet-based
clinical e-commerce business managing laboratory and prescription transactions.
"This marks an important turning point for AHT," said Jon Edelson, M.D,
Chairman, CEO and President. "All of our Company's resources can now be devoted
to capturing the significant opportunities before us that are being created by
the growth of the Internet and its emerging transformation of the healthcare
industry. We believe AHT is competitively positioned to benefit from this trend
by leveraging its clinical e-commerce products, prominent customer base, and
national distribution channels."
Commenting on the sale, Jeffrey Sauerhoff, Chief Financial Officer, stated,
"Hambrecht & Quist assisted us in a national search to identify the best buyer
for our physician management services unit. The transaction was structured as an
asset purchase sale, encompassing the unit's assets in Tarrytown, NY, Malvern,
PA, and Atlanta, GA. Although AHT will receive $3.1 million in cash for these
assets, we expect the transaction to be cash flow neutral as we retire certain
obligations created in connection with the unit's prior acquisition of
Integrated Medical Management, Inc."
Separately, AHT said that it had settled a previously announced dispute with Dr.
Jeffrey Moses, a former partner in Advanced Heart Physicians and Surgeons
Network, LLP, a practice with which the Company had a management services
contract. Terms of the settlement were not released.
AHT Corporation (Nasdaq: AHTC) participates in the growing healthcare e-commerce
market. The Company provides information technology enabling the electronic
management of laboratory and prescription transactions. AHT's goal is to be a
leading provider of Internet-based clinical e-commerce among physicians and
healthcare organizations. For more information, please visit AHT's website at
www.ahtech.com. (Effective February 1, 1999, Advanced Health Corporation changed
the name under which it is conducting business to AHT Corporation and changed
its Nasdaq stock symbol from ADVH to AHTC.)
This press release contains forward-looking information regarding AHT
Corporation. The forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements, including statements as to industry trends, future
economic performance, anticipated profitability, anticipated revenues and
expenses, and products or service line growth may be significantly impacted by
certain risks and uncertainties, including, but not limited to, failure of the
clinical e-commerce industry to develop at anticipated rates, failure of the
Company's clinical information technology products and services to gain
significant market acceptance, competition and other economic factors. No
assurances can be given as to the outcome of any pending
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lawsuits involving AHT. These forward-looking statements speak only as of the
date hereof, and the Company disclaims any intention or obligation to update
these forward-looking statements in the future. Additional risks and
uncertainties are described in AHT's public filings with the Securities and
Exchange Commission.
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