SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
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 1, 1997
SPECIALTY CARE NETWORK, INC.
(Exact Name of Registrant Specified in Charter)
Delaware 0-22019 62-1623449
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(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
44 Union Boulevard, Suite 600
Lakewood, Colorado 80228
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (303) 716-0041
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(Former Name or Former Address, if Changed Since Last Report)
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This amendment to the Company's Form 8-K filed with the Securities and
Exchange Commission on July 16, 1997, amends and modifies Item 2 to the Form
8-K to amend and restate Item 2 in its entirety.
Item 2. Acquisition or Disposition of Assets.
On July 1, 1997, Specialty Care Network, Inc. (the "Company") acquired,
through merger, substantially all of the assets and certain liabilities (the
"SNG Merger") of Southeastern Neurology Group, P.C., a Virginia professional
corporation ("SNG"), pursuant to the terms of a Merger Agreement, dated June 30,
1997, among the Company, SNG, Robert B. Hansen, M.D., Vernon H. Kirk, Jr., M.D.
and Arthur R. Sonberg, M.D. (the "SNG Merger Agreement"). SNG was a 16 physician
neurology/physiatry group with its headquarters in Portsmouth, Virginia and five
additional offices in the Portsmouth, Virginia area. In connection with the SNG
Merger, the common stock of SNG was exchanged for aggregate consideration of
approximately $3,421,000 consisting of approximately $1,995,000 in cash and
120,155 shares of Company Common Stock, valued at $11.2125 per share pursuant to
the terms of the SNG Merger Agreement. In addition to the consideration paid to
the SNG shareholders, the Company also paid $69,000 in cash and issued 4,102
shares of Company Common Stock to an administrator to the practice as
consideration for services rendered to SNG by such administrator in connection
with the SNG Merger. The Company used its available funds to pay the cash
portion of the consideration paid for the assets pursuant to the SNG Merger
Agreement. The assets acquired from SNG pursuant to the SNG Merger include
certain equipment used by SNG in the practice of medicine. In connection with
the SNG Merger, the Company entered into a service agreement with Southeastern
Neurology Group II, P.C., a new practice formed by the former shareholders of
SNG, pursuant to which the Company has agreed to provide management,
administrative and development services to the new practice. The Company will
make available to the new practice the equipment it acquired in the SNG Merger.
On July 1, 1997, the Company acquired, through merger, substantially
all of the assets and certain liabilities (the "OSL Merger") of Orthopaedic
Surgery, Ltd., a Virginia professional corporation ("OSL"), pursuant to the
terms of a Merger Agreement, dated June 30, 1997, among the Company, OSL, J.C.P.
Collier, Jr., M.D., Richard D. Knauft, M.D., Wayne T. Johnson, M.D., Ernesto
Luciano-Perez, M.D. and Mark B. Kerner, M.D. (the "OSL Merger Agreement"). OSL
was an orthopaedic practice located in Portsmouth, Virginia. In connection with
the OSL Merger, the common stock of OSL was exchanged for aggregate
consideration of approximately $6,194,000 consisting of approximately $2,158,000
in cash and 339,839 shares of Company Common Stock, valued at $11.2125 per share
pursuant to the terms of the OSL Merger Agreement. In addition to the
consideration paid to the OSL shareholders, the Company also paid $120,000 in
cash and issued 6,920 shares of Company Common Stock to an administrator to the
practice as consideration for services rendered to OSL by such administrator in
connection with the OSL Merger. In connection with the OSL Merger, the Company
granted one physician associated with OSL the right, until June 30, 1998, to
require the Company to purchase 74,844 of the 159,643 shares of Company Common
Stock issued to such physician as consideration for the OSL Merger at a purchase
price equal to $11.2125 per share. The Company used its available funds to pay
the cash portion of the consideration paid for assets pursuant to the OSL Merger
Agreement. The assets acquired from OSL pursuant to the OSL Merger include
certain equipment used by OSL on the practice of orthopaedic medicine. In
connection with the OSL Merger, the Company entered into a service agreement
with Orthopaedic Surgery Centers, P.C. II, a new orthopaedic practice formed by
the former shareholders of OSL, pursuant to which the Company has agreed to
provide management, administrative and development services to the
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new practice. The Company will make available to the new practice the equipment
it acquired in the OSL Merger.
On July 3, 1997, the Company acquired: (i) substantially all of the
assets and certain liabilities (the "NCS&A Merger") of Neal C. Small, M.D. &
Associates, P.A., a Texas professional association ("NCS&A"), pursuant to the
terms of a Merger Agreement, dated July 3, 1997, among the Company, NCS&A, Neal
C. Small, M.D. ("Dr. Small") and Alexander I. Glogau, M.D. ("Dr. Glogau") (the
"NCS&A Merger Agreement"); (ii) substantially all of the assets and certain
liabilities (the "NCS Merger") of Neal C. Small, M.D., P.A., a Texas
professional association ("NCS"), pursuant to the terms of a Merger Agreement,
dated July 3, 1997, among the Company, NCS and Dr. Small ("NCS Merger
Agreement"); and (iii) substantially all of the assets and certain liabilities
(the "AIG Merger") of Alexander I. Glogau, M.D., P.A., a Texas professional
association ("AIG"), pursuant to the terms of a Merger Agreement, dated July 3,
1997, among the Company, AIG, and Dr. Glogau ("AIG Merger Agreement"). NCS&A was
a three physician orthopaedic and sports medicine group with its headquarters in
Plano, Texas. NCS was a one physician orthopaedic and sports medicine practice
with its headquarters in Plano, Texas. AIG was a one physician orthopaedic and
sports medicine practice with its headquarters in Plano, Texas. In the NCS&A
Merger, the aggregate consideration paid by the Company was approximately
$1,475,000 consisting of approximately $405,000 in cash and 90,780 shares of
Company Common Stock valued at $11.75 per share pursuant to the terms of the
NCS&A Merger Agreement. In the NCS Merger, the aggregate consideration paid by
the Company was approximately $1,070,000 consisting of 90,780 shares of Company
Common Stock valued at $11.75 per share pursuant to the terms of the NCS&A
Merger Agreement. In the AIG Merger, the aggregate consideration paid by the
Company was approximately $1,475,000 consisting of approximately $405,000 in
cash and 90,780 shares of Company Common Stock valued at $11.75 per share
pursuant to the terms of the AIG Merger Agreement. The Company used its
available funds to pay the cash portion of the consideration paid pursuant to
the NCS&A Merger Agreement, NCS Merger Agreement and AIG Merger Agreement. The
assets acquired from NCS&A, NCS and AIG include certain equipment used by NCS&A,
NCS and AIG, respectively, in the practice of orthopaedic and sports medicine.
In connection with the NSC&A Merger, NCS Merger and AIG Merger, the Company
entered in a service agreement with Associated Orthopaedics & Sports Medicine,
P.A., a new practice formed by Dr. Small and Dr. Glogau, pursuant to which the
Company has agreed to provide management, administrative and development
services to the new practice. The Company will make available to the new
practice the equipment acquired in the NCS&A Merger, NCS Merger and AIG Merger.
On July 3, 1997, the Company acquired substantially all of the assets
and certain liabilities (the "AAII Acquisition") of Associated Arthroscopy
Institute, Inc., a Texas corporation ("AAII"), pursuant to the terms of an Asset
Purchase Agreement, dated July 3, 1997, among the Company, AAII, Dr. Glogau and
Dr. Small (the "AAII Agreement"). AAII owned and operated an ambulatory surgery
center in Plano, Texas. Pursuant to the terms of the AAII Agreement, the Company
paid an aggregate consideration of approximately $2,220,000 in cash. The Company
used its available funds to pay for the assets. In connection with the AAII
Acquisition, the Company entered into a service agreement with AAII pursuant to
which the Company has agreed to provide management, administrative and
development services to AAII. The Company will make available to AAII the
equipment it acquired in the AAII Acquisition.
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On July 3, 1997, the Company acquired substantially all of the assets
and certain liabilities (the "APT Acquisition") of Access Medical Supply, Inc.
d/b/a Associated Physical Therapy, a Texas corporation ("APT"), pursuant to the
terms of an Asset Purchase Agreement, dated July 3, 1997, among the Company,
APT, Dr. Glogau and Dr. Small (the "APT Agreement"). APT owned and operated a
physical therapy center in Plano, Texas. Pursuant to the terms of the APT
Agreement, the Company paid an aggregate consideration of approximately
$1,510,000 in cash. The Company used its available funds to pay for the assets.
In connection with the APT Acquisition, the Company entered into a service
agreement with APT pursuant to which the Company has agreed to provide
management, administrative and development services to APT. The Company will
make available to APT the equipment it acquired in the APT Acquisition.
On July 3, 1997, the Company acquired substantially all of the assets
and certain liabilities (the "AOR Acquisition") of Allied Health Services, P.A.
d/b/a Associated Occupational Rehabilitation, a Texas professional association
("AOR"), pursuant to the terms of an Asset Purchase Agreement, dated July 3,
1997, among the Company, AOR and Dr. Small (the "AOR Agreement"). AOR owned and
operated an occupational therapy center in Plano, Texas. Pursuant to the terms
of the AOR Agreement, the Company paid an aggregate consideration of
approximately $430,000 in cash. The Company used its available funds to pay for
the assets. In connection with the AOR Acquisition, the Company entered into a
service agreement with AOR pursuant to which the Company has agreed to provide
management, administrative and development services to AOR. The Company will
make available to AOR the equipment it acquired in the AOR Acquisition.
On July 7, 1997, the Company acquired, by asset purchase, certain
assets (the "PPTC Purchase") of Ortho-Associates, P.A. d/b/a Park Place
Therapeutic Center, a Florida professional service corporation ("PPTC"),
pursuant to the terms of an Asset Purchase Agreement, dated July 7, 1997, by and
among the Company, PPTC, Martin E. Hale, M.D., Alan M. Lazar, M.D. and Martin M.
May, M.D. (the "PPTC Agreement"). PPTC is an orthopaedic practice with locations
in Plantation, Florida and Tamarac, Florida. In connection with the PPTC
Purchase, certain assets (excluding existing accounts receivable) were acquired
for aggregate consideration of approximately $16,525,000, consisting of
approximately $16,000,000 in cash and the balance consisting of warrants to
purchase, in the aggregate, 544,681 shares of Company Common Stock at an
exercise price of $14.6875 per share. In addition, the Company paid a finders
fee of $500,000 in connection with the PPTC Purchase. The Company used
approximately $2,300,000 of its available funds and $13,700,000 of its line of
credit to pay for the assets. The assets acquired from PPTC pursuant to the PPTC
Purchase include certain equipment used by PPTC in the practice of orthopaedic
medicine. In connection with the PPTC Purchase, the Company entered into a
Service Agreement with PPTC, pursuant to which the Company has agreed to provide
management, administrative and development services to the practice. The Company
will make available to the practice the equipment it acquired in the PPTC
Purchase.
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SIGNATURE
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.
SPECIALTY CARE NETWORK, INC.
(Registrant)
By: \s\ D. Paul Davis
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D. Paul Davis
Senior Vice President of
Finance/Controller
Dated: August 4, 1997
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