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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): OCTOBER 19, 1999
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SPECIALTY CARE NETWORK, INC.
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(Exact Name of Registrant Specified in Charter)
DELAWARE 0-22019 62-1623449
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(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification No.)
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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ITEM 5. OTHER EVENTS
On October 19, 1999, the Company issued a press release addressing certain
recent developments. A copy of the press release is attached hereto as exhibit
99.1 to this current report on Form 8-K and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibit.
99.1 Press Release dated October 19, 1999.
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/Chief Financial Officer
Dated: October 21, 1999
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EXHIBIT INDEX
Exhibit Number Description
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Exhibit 99.1 Press Release dated October 19, 1999
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT: PATRICK JAECKLE
EXECUTIVE VICE PRESIDENT
(303) 716-0041
SPECIALTY CARE NETWORK ADDRESSES
CERTAIN RECENT DEVELOPMENTS
LAKEWOOD, Colorado (October 19, 1999) C In response to a published report,
Specialty Care Network, Inc. (Nasdaq/NM:SCNI) is issuing the following statement
with regard to certain recent developments.
PREFERRED STOCK OFFERING. The Company is in negotiations with potential
investors with regard to an offering of Company preferred stock. The precise
terms of the offering remain subject to negotiation, and the Company cannot
assure that an offering will be completed. The Company is seeking to raise $4-8
million. The Company intends to use $4 million of the proceeds to increase its
ownership interest in HealthGrades.com, Inc. to 90 percent.
The securities will not be registered under the Securities Act of 1933,
as amended, and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
LITIGATION. The Company has been in settlement discussions with certain
of the practices with which it has been litigating. However, while the Company
is hopeful that it will be able to reach an amicable settlement with these
practices, it cannot assure that a settlement will be reached and cannot predict
with accuracy the terms of any such settlement.
BANKING RELATIONSHIP. As a result of agreements restructuring or
terminating the Company's arrangements with its affiliated practices and the
settlement of certain litigation, the Company has reduced indebtedness on its
credit facility to approximately $12.3 million as of October 1, 1999, and has
revised its credit facility to a term loan payable through November 21, 2000. As
a result of the revision of its credit facility, the Company is no longer in
default.
The Company has not requested any additional credit from its bank
lenders, and is unable to predict whether it would be able to borrow additional
amounts if it made such a request.
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TERMINATION AGREEMENTS. The Company has recently entered into
termination agreements with Greater Chesapeake Orthopaedic Associates, L.L.C.
("GCOA") and Orthopaedic and Sports Medicine Center, L.L.C. ("OSMC"). As a
result of these agreements, the Company is no longer providing management
services to the practices. Under its termination agreement with GCOA, the
Company will retain the $1,185,271 prepaid service fee and receive a percentage
of ancillary service revenues relating to bone densitometry and MRI equipment at
the practice through August 31, 2003 and April 30, 2003, respectively. With
respect to OSMC, the Company received $150,000 and a promissory note in the
amount of $1,073,777, which is payable through October 1, 2000.
The Company has discussed termination arrangements with three other
practices, but cannot predict whether it will enter into additional termination
arrangements.
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