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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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) June 15,1999
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REXX Environmental Corporation
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(Exact Name of Registrant as Specified in Charter)
New York 0-5613 13-2625545
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
350 Park Avenue, New York, NY 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 212-750-7755
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Page 1 of 4 (including exhibit)
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Item 5. Other Events.
On June 15, 1999, the registrant announced that it had signed an
agreement to sell its wholly owned subsidiary, Watkins Contracting, Inc. See
press release, dated June 15, 1999, issued by the registrant, filed herewith as
Exhibit 1.
Item 7. Exhibit.
Press release, dated June 15, 1999, issued by the registrant on said
date is filed herewith as Exhibit 1.
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.
Date: June 23, 1999 REXX ENVIRONMENTAL CORPORATION
By: /s/ Arthur L. Asch
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Arthur L. Asch
Chairman of the Board
Page 2 of 4 (including exhibit)
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Exhibit 1
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FOR IMMEDIATE RELEASE:
JUNE 15, 1999
FOR FURTHER INFORMATION:
Mr. Arthur L. Asch
Mr. Michael A. Asch
(212) 750-7755
(New York, New York, June 15, 1999) REXX Environmental Corporation (American
Stock Exchange: REX) announced that it has signed a definitive agreement to sell
its wholly owned and sole operating subsidiary, Watkins Contracting, Inc. to
Greg Watkins and Daren Barone for $1,300,000 in cash and 125,000 shares of REXX
Environmental Corporation common stock. Messrs. Watkins and Barone sold Watkins
Contracting, Inc. to REXX Environmental Corporation in October 1997. The Company
plans to prepare a proxy statement, which will be filed with the Securities and
Exchange Commission, for a shareholder vote to act on the Board's recommendation
to approve this transaction. Based on preliminary estimates, if the shareholders
approve the transaction, on its closing the Company will record a loss on the
sale of Watkins Contracting, Inc. of approximately $2,500,000 which represents
the difference between the price that it will receive and the combined value of
the investment and goodwill that is recorded on REXX Environmental Corporation's
books. This preliminary estimate is subject to further review and valuations at
the time the transaction closes.
Watkins Contracting, Inc. has signed an amendment to its secured lending
agreement with its bank which adjusts the financial covenants and increases the
interest rate to 2% over the prime rate. The bank has verbally notified the
Company that additional borrowing above the current level is subject to receipt
and review by the bank of the definitive agreement to sell Watkins Contracting,
Inc. to Messrs. Watkins and Barone.
The Company previously announced that it reached a preliminary understanding to
acquire a company which will operate a health, fitness, and nutritional products
and services discount card membership program and several health, fitness, and
nutrition related e-commerce sites. That company has recently been undergoing
various changes in its business plan, personnel, corporate structure and
financing. While the Company has continued its discussions and negotiations with
this entity, final decisions relating to structure, pricing and documentation
have gone slower than anticipated. As a result, REXX Environmental Corporation's
management has had discussions with other entities regarding business
combinations.
Page 3 of 4 (including exhibit)
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There is no assurance that the sale Of Watkins Contracting, Inc. as described
above will be completed or that REXX Environmental Corporation will
consummate a business combination with another entity.
The statements contained in this release may contain forward looking statements
relating to such matters as amendments with its bank, the sale of Watkins
Contracting, Inc., the amount of the loss to the Company on the sale, the
acquisition of another business, shareholder approval, and similar matters. The
Private Securities Reform Act of 1995 provides a safe harbor for forward looking
statements. In order to comply with the terms of the safe harbor, the Company
notes that a variety of factors could cause the Company's actual results to
differ materially from the anticipated results expressed in the Company's
forward looking statements, such as intensified competition and/or operating
problems in its operating business projects and their impact on revenues and
profit margins, the unavailability or reduction of its credit line, the impact
of a potential sale on its operating business, the possibility that a sale of
the operating business will not take place, and the possibility that a business
combination with another entity will not take place or additional factors as
described in prior filings.
Page 4 of 4 (including exhibit)
