<PAGE> 1
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Information Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)(2))
/X/ Definitive Information Statement
</TABLE>
ZANART ENTERTAINMENT INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant As Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
INFORMATION STATEMENT
PURSUANT TO SECTION 14(f)
OF THE
SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
ZANART ENTERTAINMENT INCORPORATED
---------------------------------
(Exact name of Registrant as specified in its Charter)
Florida 59-2716063
------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7641 Burnet Avenue, Van Nuys, California 91405
-----------------------------------------------
(Address of principal executive offices)
(818) 904-9797
------------------------------------------------
(Issuer's telephone number, including area code)
<PAGE> 3
ZANART ENTERTAINMENT INCORPORATED
7641 BURNET AVENUE
VAN NUYS, CALIFORNIA 91405
(818) 904-9797
---------------------
INFORMATION STATEMENT
---------------------
This Information Statement is being mailed on or about August 27, 1996 to
holders of shares of the common stock (the "Common Stock") of Zanart
Entertainment Incorporated, a Florida corporation, (the "Company"), pursuant to
Section 14(f) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") and Rule 14f-1 promulgated thereunder.
On August 9, 1996, the Company entered into an Agreement and Plan of
Merger (the "Agreement") with Continucare Corporation ("Continucare").
Pursuant to the Agreement, Zanart Subsidiary, Inc., a wholly-owned subsidiary
of the Company, will merge with and into Continucare (the "Merger") and each
issued and outstanding share of Continucare common stock (which, as a condition
to closing, will not exceed 8,300,000 shares) will be converted into the right
to receive one share of the Company's common stock. Thereafter, the present
shareholders of Continucare will own a majority of the issued and outstanding
common stock of the Company and will, therefore, be able to control the
election of the Board of Directors of the Company. Immediately upon the
effectiveness of the Merger, the present members of the Board of Directors of
the Company will be required to resign and will be replaced by the designees of
Continucare.
NO ACTION IS REQUIRED BY THE SHAREHOLDERS OF THE COMPANY IN CONNECTION
WITH THE MERGER OR THE RESULTING CHANGE IN THE COMPANY'S BOARD OF DIRECTORS.
However, Section 14(f) of the Exchange Act requires that the Company mail this
Information Statement to its present shareholders prior to the change in the
majority of the Company's directors required by the Agreement.
The information contained in this Information Statement concerning
Continucare and its designees for directors and officers of the Company after
the effectiveness of the Merger has been furnished to the Company by
Continucare and such designees, and the Company assumes no responsibility for
the accuracy or completeness of such information.
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<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, with respect to the beneficial
ownership of the Company's Common Stock as of August 22, 1996 by (i) each
current shareholder of the Company who is known to be the beneficial owner of
more than 5% of its outstanding Common Stock; (ii) each current director of the
Company; (iii) each current executive officer of the Company; and (iv) all
current directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership (1) Common Stock (2)
------------------- ------------------------ ----------------
<S> <C> <C>
Thomas Zotos 258,125 8.9%
7641 Burnet Avenue
Van Nuys, CA 91405
Robert A. Stein (3) 241,250 8.3%
7641 Burnet Avenue
Van Nuys, CA 91405
Steven B. Adelman (4) 282,875 9.7%
7641 Burnet Avenue
Van Nuys, CA 91405
Todd B. Slayton (4) 36,667 1.3%
7641 Burnet Avenue
Van Nuys, CA 91405
Gary D. Culpepper (4) 10,000 *
101 Callan Avenue, 3rd Floor
San Lerando, CA 94577
Frost Nevada 533,333 18.4%
Limited Partnership (4)(5)
3500 Lakeside Court
Suite 200
Reno, NV 89509
Richard B. Frost 206,000 7.1%
7700 W. Camino Real
Boca Raton, FL 33143
Mark J. Hanna 207,000 7.1%
7700 W. Camino Real
Boca Raton, FL 33143
</TABLE>
3
<PAGE> 5
<TABLE>
<S> <C> <C>
All directors and executive 828,917 28.6%
officers and as a group (5)
persons
</TABLE>
* Less than one percent
(1) For purposes of this table, beneficial ownership is computed pursuant to
Rule 13d-3 under the Exchange Act; the inclusion of shares a beneficially
owned should not be construed as an admission that such shares are
beneficially owned for purposes of the Exchange Act. Under the rules of
the Commission, a person is deemed to be a "beneficial owner" of a
security if he or she has or shares the power to vote or direct the voting
of such security or the power to dispose of or direct the disposition of
such security. Accordingly, more than one person may be deemed to be a
beneficial owner of the same security. Shares of Common Stock subject to
options held by executive officers and directors that are exercisable
within 60 days are deemed beneficially owned by such person and
outstanding for the purpose of computing such executive officer's or
director's beneficial ownership and the beneficial ownership of all
executive officers and directors as a group. According to Fidelity
Transfer Company, the transfer agent for the Company's Common Stock,
2,902,983 shares of the Common Stock were outstanding as of the close of
business on August 22, 1996.
(2) Assumes no exercise of the Underwriter Purchase Options issued to
affiliates of First Equity Corporation, the Company's underwriter of its
public offering which closed in May 1995 (the "May 1995 Public Offering")
or the Series A Warrants sold in the May Public Offering.
(3) Does not include shares of Common Stock owned by Eric Stein or Ronald M.
Stein, Robert A. Stein's father and brother, respectively, of which Robert
A. Stein disclaims beneficial ownership.
(4) Includes shares of Common Stock underlying stock options granted or
to be granted which are exercisable within 60 days.
(5) Includes 250,000 shares of the Company's Common Stock underlying a
warrant sold to Frost Nevada Limited Partnership in February 1994 ("Frost
Nevada") entitling the holder thereof to purchase 250,000 shares of the
Company's Common Stock at a purchase price of $4.00 per share at any time
and from time to time through February 1999.
The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock which will exist immediately upon the
effectiveness of the Merger by (i) each shareholder of the Company who will
then be a beneficial owner of more than 5% of the Company's outstanding Common
Stock; (ii) each person presently designated by Continucare to become a
director of the Company; (iii) each person presently designated by Continucare
to become an executive officer of the Company; and (iv) all persons presently
designated by Continucare to become directors and executive offices of the
Company as a group.
<TABLE>
<CAPTION>
Name & Address of Amount & Nature of Percent of
Beneficial Owner Beneficial Ownership(1) Common Stock(2)
----------------- ----------------------- ---------------
<S> <C> <C>
Charles M. Fernandez 1,666,667 14.9%
3333 West Commercial Blvd.
Suite 105
Ft. Lauderdale, FL 33309
Arthur Goldberg 1,000,000 8.9%
380 Middlesex Avenue
Carteret, NJ 70080
</TABLE>
4
<PAGE> 6
<TABLE>
<S> <C> <C>
Dr. Phillip Frost 1,533,333(3) 13.7%
4400 Biscayne Blvd.
Miami, FL 33137
Michael C. Piercey 0 0
3333 West Commercial Blvd.
Suite 105
Ft. Lauderdale, FL 33309
Richard B. Frost 355,000 3.2%
7700 W. Camino Real
Boca Raton, FL 33433
Mark J. Hanna 350,000 3.1%
7700 W. Camino Real
Boca Raton, FL 33433
Frost Nevada Limited Partnership (4) 1,533,333 13.7%
3500 Lakeside Court
Suite 200
Reno, NV 89509
Douglas Miller 1,666,667 14.9%
3333 West Commercial Blvd.
Suite 105
Ft. Lauderdale, FL 33309
Barry Goldstein 1,666,667 14.9%
3333 West Commercial Blvd.
Suite 105
Ft. Lauderdale, FL 33309
Susan Tarbe 0 0
3333 West Commercial Blvd.
Suite 105
Ft. Lauderdale, FL 33309
All directors and executive 8,238,334 73.5%
officers as a group (9 persons)
</TABLE>
* less than one percent
(1) For purposes of this table, beneficial ownership is computed pursuant to
Rule 13d-3 under the Exchange Act; the inclusion of shares as beneficially
owned should not be construed as an admission that such shares are
beneficially owned for purposes of the Exchange Act. Under the rules of
the Securities and Exchange Commission, a person is deemed to be a
"beneficial owner" of a security he or she has or shares the power to vote
or direct the voting of such security or the power to dispose of or direct
the disposition of such security. Accordingly, more than one person may
be deemed to be a beneficial owner of the same security. Accordingly, to
Fidelity Transfer Company, the transfer agent for the Company's Common
Stock, 2,902,983 shares of Common Stock were issued and outstanding as of
August 22, 1996. When coupled with the 8,300,000 shares which are to be
issued in connection with the Merger, the total shares outstanding upon
the effectiveness of the Merger will be 11,202,983 shares. Beneficial
ownership figures reflected in this table, therefore, assume that
11,202,983 shares will be issued and outstanding.
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<PAGE> 7
(2) Assumes no exercise of the Underwriter Purchaser Options issued to
affiliates of First Equity Corporation, the Company's underwriter of its
public offering which closed in May 1995 or their Series A Warrants sold
in the May 1995 public offering.
(3) All of the shares owned beneficially by Dr. Phillip Frost are owned of
record by Frost Nevada Limited Partnership.
(4) Includes shares of Common Stock underlying options granted which are
exercisable within 60 days.
CHANGE IN CONTROL
Upon the effectiveness of the Merger, the current shareholders of
Continucare will acquire shares of Common Stock of the Company in exchange for
their shares of common stock of Continucare.
In addition, in connection with the Merger, all of the current members of
the Board of Directors of the Company will resign, and the following persons
have been designated by Continucare to become members of the Board of Directors
of the Company (one (1) additional member will be designated by Continucare
after the effectiveness of the Merger):
Charles M. Fernandez Dr. Phillip Frost
Arthur Goldberg Michael C. Piercey
Richard B. Frost Mark J. Hanna
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding the Company's
current directors and executive officers, each of whom will be replaced
immediately upon the effectiveness of the Merger.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Thomas Zotos 48 President and Chairman of the Board
Robert A. Stein 40 Executive Vice President and Director
Steve Adelman 40 Director
Gary Culpepper 46 Director
Todd Slayton 34 Chief Financial Officer and Treasurer
</TABLE>
Mr. Zotos has been the President and member of the Board since 1990.
From 1986 through 1990, Mr. Zotos was Vice President and co-founder of Art One
Images, an affiliate of OSP Publishing, a firm engaged in the publishing of art
prints, where his responsibilities included the development of animation art
products based on entertainment properties licensed from television and motion
picture studios.
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<PAGE> 8
Mr. Stein has been the Executive Vice President and a member of the
Board since 1990. From 1986 to 1989, Mr. Stein was a record producer and
songwriter. Mr. Stein is a graduate of Southwestern University College of Law
and is a member of the Hawaii Bar Association.
Mr. Adelman has been a member of the Board since 1990. From 1990 to July 1994,
Mr. Adelman served as the Vice President and Chief Financial Officer of the
Company. Mr. Adelman is a graduate of Southwestern University College of Law
and has been practicing law in California since 1981.
Mr. Culpepper has been a member of the Board since July 1996. During 1995 and
1996 Mr. Culpepper served as outside counsel and consultant to several
companies including Sega of America and Crystal Dynamics. From 1994 to 1995,
he served as Senior Counsel to Columbia/Tristar Home Video in Los Angeles,
California. From 1991 to 1994, Mr. Culpepper was a solo practitioner
specializing in music and entertainment law. Mr. Culpepper is a graduate of
Southwestern University College of Law and has been practicing law in
California since 1976.
Mr. Slayton has been Chief Financial Officer of the Company since October 1994.
Mr. Slayton was a senior accountant/consultant with Deloitte & Touche LLP, Los
Angeles, California from August 1991 through September 1994. From September
1989 through May 1991, Mr. Slayton attended the University of Southern
California, Business School, where he eared his Masters of Business
Administration degree in May 1991. Mr. Slayton has been a certified public
accountant in California since January 1994.
The following table sets forth certain information regarding designees of
Continucare, who will become directors and executive officers of the Company
immediately upon the effectiveness of the Merger.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Charles M. Fernandez 34 Chairman, President and Chief Executive Officer
Arthur Goldberg 54 Director
Dr. Phillip Frost 60 Director
Michael C. Piercey 51 Director
Richard B. Frost 47 Director
Mark J. Hanna 47 Director
Douglas Miller 34 Executive Vice President
Barry Goldstein 51 Executive Vice President
Susan Tarbe 41 Senior Vice President and General Counsel
</TABLE>
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<PAGE> 9
Mr. Fernandez co-founded Continucare in February of 1996 and has been involved
in all aspects of its operations since that time serving as its Chairman of the
Board, President and Chief Executive Officer. Prior to founding Continucare,
Mr. Fernandez was the Chief Executive Officer and Chief Operating Officer of
Heftel Broadcasting Corporation, a public company owning a network of radio
stations, since 1985.
Mr. Goldberg for the past five years has been Chairman of the Board of
Directors, Chief Executive Officer and President of Bally Entertainment Corp.,
Chairman of the Board of Directors, President and Chief Executive Officer of
Bally's Casino Holdings, Inc., Chairman of the Board of Directors and Chief
Executive Officer of Bally's Park Place, Inc., GNOC, CORP., Bally's Grand, Inc.
and Bally Total Fitness Holding Corporation. Mr. Goldberg is also the Chairman
of the Board of Directors, President and Chief Executive Officer of Di Georgio
Corporation and Managing Partner of Arveron Investments L.P. Mr. Goldberg is
also a director of First Union Corporation, a financial services company.
Dr. Phillip Frost has served, since 1987, as Chairman of the Board of Directors
and Chief Executive Officer of IVAX Corporation, a Florida corporation ("IVAX"),
the world's largest generic pharmaceutical manufacturer. He served as IVAX's
President from July 1991 until January 1995. He was the Chairman of the
Department of Dermatology at Mt. Sinai Medical Center of Greater Miami, Miami
Beach, Florida from 1990 to 1992. Dr. Frost was Chairman of the Board of
Directors of Key Pharmaceutical, Inc. from 1972 to 1986. He is Vice Chairman
of the Board of Directors of North America Vaccine, Inc. ("NAC"), and a
Director of American Exploration Company, which is engaged in oil and gas
exploration and production, NaPro BioTherapeutics, Inc., a biopharmaceutical
research and development firm ("NaPro"), Whitman Education Group, which is
engaged in proprietary education ("Whitman") and Northrup Grumman. He is a
trustee of the University of Miami and a member of the Board of Governors of
the American Stock Exchange. Dr. Frost is the uncle of Richard Frost.
Dr. Piercey has been a Board Member, Executive Vice President and Medical
Director of Healthcare America, Inc., a healthcare management company which
owns and operates acute care hospitals, long-term rehabilitation hospitals,
psychiatric hospitals, community living programs, and a full array of partial
hospital and outpatient services in Texas, Colorado, Florida, Oklahoma,
Tennessee, and Virginia, since 1994. Since 1992, Dr. Piercey has been an
Officer and Director of DHP, Inc. which operates the Rock Creek Center, a
psychiatric hospital and outpatient service system in the Southwestern Chicago
suburbs. He was the Clinical Director at Four Winds, Inc., a psychiatric
hospital company with affiliates in Saratoga Springs, New York and Chicago from
1978 to 1992, and in 1986 he assumed the additional responsibilities of
Executive Director and Chief Executive Officer.
Mr. Richard Frost has been Chief Executive Officer and Chairman of the Board of
Directors of Frost Hanna Mergers Group, Inc. since its formation in October
1993. Since June 1992, Mr. Frost has been the Chief Executive Officer and
Chairman of the Board of Directors of Frost Hanna Acquisition and Frost Hanna
Halpryn, both of which are "blank check" companies. Mr. Frost is the Chief
Executive Officer and Chairman of the Board of Directors of FHR Consulting
Group, Inc., a financial consulting firm wholly owned by Messrs. Frost, Mark
J. Hanna and Marshal E. Rosenberg ("FHR"). From February 1992 through May 1992,
Mr. Frost was Regional Director with GKN Securities Corp., a broker-dealer
("GKN") where his responsibilities included the recruitment and training of GKN
brokerage personnel located or to be located in Florida. From May 1982 through
February 1992, Mr. Frost was Vice President and Branch Manager of Dean Witter
Reynolds, a broker-dealer, where his responsibilities included the management
and day-to-day operations of the West Boca Raton and Lighthouse Point, Florida
branch offices of the brokerage firm. Mr. Frost is the nephew of Dr. Phillip
Frost.
Mr. Hanna has been President and a member of the Board of Directors of Frost
Hanna Mergers Group, Inc. since its formation in October 1993. Since June 1992,
Mr. Hanna has been the President and a member of the Board of Directors of
Frost Hanna Acquisition and Frost Hanna Halpryn, both of which are "blank
check" companies. Mr. Hanna is the President and a member of the Board of
Directors of FHR. From February 1992 through May 1992, Mr. Hanna was a
registered representative of GKN. From January 1992 through February 1992, Mr.
Hanna was a registered representative with Barron Chase Securities, Inc. From
September 1990 through January 1992, Mr. Hanna was a registered representative
with Prudential Bache Securities, Inc. From August 1982 through June 1985, Mr.
Hanna was First Vice President, Investments at the Fort Lauderdale office of
Drexel Burnham Lambert Incorporated. From July 1985 through September 1990, Mr.
Hanna was Chief Executive Officer and principal shareholder of GGH Consulting,
Inc., a firm engaged in providing financial consulting services. From September
1985 though December 1988, Mr. Hanna was a director of Biocontrol Technology,
Inc. (f/k/a Coratomic, Inc.), a public company engaged at that time in the
manufacture and sale of cardiac pacemakers and heart valves ("Biocontrol"). From
September 1986 through March 1987, Mr. Hanna was the Chief Operating Officer of
Biocontrol.
Mr. Miller has been with Continucare since its formation in February 1996
serving as its Executive Vice President. Immediately prior to joining
Continucare and since 1992, Mr. Miller served as the Chief Executive Officer of
Community Behavioral Services, Inc., a provider of health care services, and as
President of Recovery Management Corp., a provider of health care
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<PAGE> 10
services. From 1990 to 1992, Mr. Miller served as the Chief Operating Officer
of Mediplex Group, Inc., a public company that provides physical
rehabilitation, psychiatric and long term health care services.
Mr. Goldstein has been with Continucare since its formation in February 1996
serving as its Executive Vice President. Immediately prior to joining
Continucare and since 1994, Mr. Goldstein served as Vice President of
Neuro-Retoration Program, Inc., a healthcare services provider. From early
1991 to 1994, Mr. Goldstein served as Vice President of Recovery Management
Corp., an inpatient psychiatric management company.
Ms. Tarbe has been an Assistant United States Attorney for the Southern
District of Florida since September 1985. During her employment with the
United States Attorney's Office, Ms. Tarbe specialized in the area of
white-collar criminal offenses, and since May of 1994 was the Chief of the
Economic Crimes Unit.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
equity securities, to file with the Commission initial reports of ownership and
reports of changes in ownership of common stock and other equity securities of
the Company. Directors, executive officers and greater than 10% shareholder
are required by Commission regulations to furnish to the Company copies of all
Section 16(a) forms which they file.
The Company did not receive any Section 16(a) reports of ownership and
reports of changes in ownership of common stock and other equity securities of
the Company during the last fiscal year.
9
