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): January 1, 2000
METROPOLITAN HEALTH NETWORKS, INC.
----------------------------------
(Exact name of registrant as specified in its charter)
Florida 333-5884-A 65-0635748
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
5100 Town Center Circle, Boca Raton, Florida
33486 (Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (561) 416-9484
--------------
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
------------
1. Failure to Timely File Financial Statements and Reports
The Company has not filed its annual report on Form 10-K for
the fiscal year ended June 3, 1999 nor quarterly reports on Form 10-QSB for
quarters ending September 30, 1999 and December 31, 1999, due primarily to a
change in accounting management and insufficient cash flows. The Company has
elected to change its fiscal year end from June 30 to December 31 and it has
been determined that it would be in the Company's best interest to have the
audits for the year ended June 30, 1999 and the six months ended December 31,
1999 performed simultaneously. The Company anticipates that its certifying
accountant should complete both audits within the next 60 days, at which time
annual reports on Form 10-KSB will be filed, along with the quarterly report on
Form 10- QSB for the quarter ended March 31, 2000.
2. Directors of Registrant
Subsequent to January 1, 2000, the Company has accepted the
resignations of Dr. Walter Fox and Noel Guillama as directors of the Company. In
addition, Mr. Guillama resigned as President and CEO, effective February 1,
2000.
On February 4, 2000, Michael Cahr was elected as a member of
the Board of Directors. Mr. Cahr is currently the Chief Executive Officer of
IKEDEGA, a video service technology company. Prior to IKEDEGA, Mr. Cahr was
Chairman of AllScripts, Inc., a publicly traded prescription management company.
On February 9, 2000 the Board appointed Fred Sternberg as
President and CEO of the Company. Mr. Sternberg was also elected as a member of
the Board of Directors. For more than the past five years, Mr. Sternberg has
been a consultant to various companies in the healthcare industry, including
physician and dental management companies.
In addition, on March 2, 2000, Marvin Heiman was elected to
the Board of Directors of the Company. Heiman is currently President and
Chairman of the Board of Sussex Financial Group, Inc. and Sussex Insurance Group
in Deerfield, Illinois, an asset money manager for physician and group health
plans. From 1982 until 1986 Mr. Heiman was President of Professional Real Estate
Securities Company, a registered broker-dealer. Mr. Heiman is also a partner of
the Chicago White Sox baseball team.
As of the date hereof, the Board of Directors of the Company consists
of the following persons:
Fred Sternberg Paul Preste, M.D.
Marvin Heiman Michael Cahr
2
<PAGE>
Mark Gerstenfeld Karl Sachs
3. Key Employees
On February 9, 2000, David Gartner, C.P.A., was named by the
Board of Directors to the position of Chief Financial Officer. For the past two
years, Mr. Gartner served as Chief Financial Officer of Medical Specialists of
the Palm Beaches, Inc., a multi- specialty group of physicians. From 1991 to
1998, Mr. Gartner held the position of Chief Financial Officer at National
Consulting Group, Inc., a treatment center licensed for 140 in- patient beds in
New York and Florida.
On the same date, the Board of Directors also named Deborah A.
Finnel to the post of Vice President and Chief Operating Officer. Ms. Finnel has
over 18 years of healthcare experience. Prior to her association with the
Company, Ms. Finnel was President of Advanced Healthcare Consultants, Inc., a
company which managed physician practices as well as providing turn around
consulting to managed care providers, MSO's and hospitals.
4. Litigation
In January 2000, the Company reached settlement in three law
suits which has previously been described in reports on Form 8-K.
A settlement was reached with respect to a claim instituted by
Primedica Healthcare, Inc. ("Primedica") in the amount of $4,700,000. The matter
was settled with payment to Primedica of $2,000,000 to be payable over one year.
As of this date, payments to Primedica have been made in the amount of
approximately $600,000.
The Company also settled a law suit instituted by Mr. Michael
Goldstein, a former director and officer of the Company. While the terms of
settlement are confidential, the Company did not incur any liabilities in
connection with the settlement of the litigation.
A series of law suits with Dr. Robert L. Kagan, a former
officer and director of the Company, were also settled wherein control and
operating assets of the MRI Scan Center were returned to Dr. Kagan effective
December 19, 1999 as part of a global settlement agreement. In connection with
the settlement, Dr. Kagan forgave debt and accrued compensation owed to him by
the Company in excess of $500,000.
5. Business
On January 1, 2000, the Company sold its billing subsidiary,
Metbilling Group, Inc. for $250,000 cash, one half of which was paid at closing
and the balance is to be paid pursuant to a promissory note.
3
<PAGE>
With the disposition of the diagnostic imaging (see above) and
billing business, the Company intends to concentrate on the expanding activity
in its MSO (management services organization) business. As such, its focus will
be as an Internet provider of technology, together with solutions and services.
Currently the Company has a revenue run rate in excess of $100,000,000 as
compared to $18,000,000 for 1999 and anticipates further increases in revenue.
Consistent with this change of focus, the Company on March 20,
2000, entered into a strategic alliance with Cyber-Care (Nasdaq: CYBR). The
strategic alliance provides for the Company to utilize Cyber-Care's Electronic
House System units for its provider network and patient base. The system is a
patented Internet-based technology that provides remote monitoring of
individuals for healthcare purposes such as blood pressure, pulse, heart rate
and other vital signs.
In addition, the Company, on March 28, 2000, entered into a
five-year agreement with Neoforma.com (Nasdaq: NEOF), an online marketplace for
medical equipment and supplies, whereby the Company's physicians agree to
purchase medical supplies and equipment on Metcare's forthcoming Internet
website through a joint development whereby the Company's physicians can access
Neoforma.com.
4
<PAGE>
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.
METROPOLITAN HEALTH NETWORKS, INC.
By: \s\ Fred Sternberg
-------------------
President & CEO
Dated: April 5, 2000
5
