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): March 7, 2000
SIMIONE CENTRAL HOLDINGS, INC.
(Exact name of registrant as specified in charter)
Delaware 000-22162 22-3209241
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
6600 Powers Ferry Road
Atlanta, Georgia 30339
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (770) 644-6700
1084193v4
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
As reported below at Item 2, Simione completed a merger with MCS, Inc. on
March 7, 2000. The stockholders also approved the conversion of the Series A
Preferred Stock into common stock and a one-for-five reverse stock split.
Subsequent to the MCS merger, approximately 39% or 1,489,853 shares of the
outstanding common stock of Simione are owned by the former MCS stockholders.
One of the stockholders, John E. Reed, by virtue of the spin-off of MCS to
the stockholders of Mestek and the merger of MCS into Simione, controls
approximately 22% of the common stock on matters to be voted upon by
stockholders of Simione. The Series B Preferred Stock issued to Mestek has
voting rights equal to 2,240,000 shares of Simione common stock, or
approximately 36% of the total voting power. The Series C Preferred Stock,
issued to Mestek upon conversion of its promissory note at the closing of the
merger, has voting rights equal to 170,000 shares of Simione common stock, or
approximately 2.7% of the total voting power. Mr. Reed, through direct share
ownership and as trustee under various family trusts, controls approximately 57%
of the vote on matters to be voted upon by stockholders of Mestek. This voting
power at the Mestek level makes Mr. Reed capable of exercising voting power of
the Series B and Series C Preferred Stock at the Simione level. Accordingly, Mr.
Reed controls, through his direct and indirect control of 22% of Simione common
stock and his indirect control of the Series B and Series C Preferred Stock,
approximately 52% of the vote on matters to be voted upon by stockholders of
Simione.
Based upon a series of transactions, specifically the spin-off of MCS from
Mestek, the stockholder vote on the Simione/MCS merger, the purchase of the
Series B Preferred Stock and the promissory note that was converted into Series
C Preferred Stock, and the subsequent ownership structure, MCS, for accounting
purposes only, is considered the accounting acquirer. In addition, as a result
of these holdings, Mr. Reed was able to determine the composition of the MCS
board designees that were appointed to the Simione board, and Mr. Reed would be
able to select a 13th director to break a deadlock in the event that Simione's
board is unable to reach a decision on a vote on any matter in two consecutive
board meetings.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 6, 2000, MCS was spun off from its former parent company, Mestek,
Inc. On March 7, 2000, Simione completed the merger with MCS, Inc. Simione
issued approximately 1.5 million shares of common stock to MCS stockholders in
exchange for all of the outstanding shares of MCS common stock. This number of
shares has been adjusted to reflect a one-for-five reverse stock split that was
completed immediately prior to the merger. In connection with the closing of the
merger, Mestek invested $6 million in Simione in exchange for 5.6 million shares
of Series B preferred stock and warrants to purchase 400,000 shares of Simione
common stock. The $6 million investment consisted of the cancellation of $4
million face value of promissory notes, payment of interest accrued thereon, and
the remainder being paid in cash to Simione at the closing of the merger.
Additional information on the merger is included in Simione's press
release, a copy of which is attached hereto as Exhibit 99.1, and in Simione's
Registration Statement on Form S-4 (Registration No. 333-96529).
The consideration paid by Simione to acquire MCS was determined by
reference to a valuation report from an independent valuation firm and as a
result of arm's-length negotiations. The description of the MCS merger agreement
contained herein is qualified in its entirety by reference to the Second Amended
and Restated Agreement and Plan of Merger and Investment Agreement dated as of
October 25, 1999 by and among Simione, MCS, Mestek, Inc. and three major
stockholders of Mestek included as Exhibit 2.1 to Simione's Registration
Statement on Form S-4 (Registration No. 333-96529) and incorporated herein by
reference.
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ITEM 5. OTHER EVENTS.
On March 7, 2000, Simione effected a one-for-five reverse stock split for
its common stock. The reverse stock split was effective for stockholders of
record as of March 7, 2000. Trading on Nasdaq will reflect the reverse stock
split beginning March 8, 2000. If Simione remains listed on Nasdaq, for the next
20 trading days, the Simione common stock will trade under the symbol "SCHID".
Simione hereby incorporates by reference herein the information set forth in its
Press Release dated March 8, 2000, a copy of which is attached hereto as Exhibit
99.
Also on March 7, 2000, Simione stockholders approved the conversion on the
Series A Preferred Stock into common stock. The Series A Preferred Stock was
issued in connection with the merger agreement (the "CareCentric Agreement")
with CareCentric Solutions, Inc. The CareCentric merger was completed on August
12, 1999, for total consideration of $9,312,460. Under the CareCentric
Agreement, CareCentric merged into a wholly-owned subsidiary of Simione, and
Simione issued approximately 3,034,521 shares of Series A Preferred Stock to the
former preferred stockholders and noteholders of CareCentric and paid $3.00 per
share in cash to the former common stockholders of CareCentric (approximately
$200,000 in the aggregate). These shares of Series A Preferred Stock were
converted into 606,904 shares of Common Stock, on a post-reverse split basis, on
March 7, 2000 immediately prior to the consummation of the MCS merger. The
former CareCentric preferred stockholders and noteholders will receive
additional shares of Simione common stock (up to a maximum of 606,904 additional
shares) if the average closing market price of Simione common stock during the
fourth quarter of 2000 is less than $15.00 per share.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
It is currently impracticable for Simione to provide the audited financial
statements for MCS, Inc. Simione will file an amendment to this current report
on Form 8-K/A, to include the financial information, as soon as practicable but
not later than 60 days after the required filing date hereof..
(b) Pro Forma Financial Information.
It is currently impracticable for Simione to provide the pro forma
financial statements for Simione reflecting the merger with MCS, Inc. Simione
will file an amendment to this current report on Form 8-K/A, to include the
financial information, as soon as practicable but not later than 60 days after
the required filing date hereof.
(c) Exhibits.
Exhibit
Number Description
- ---------------------------------------------------
99 Press Release dated March 8, 2000
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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.
SIMIONE CENTRAL HOLDINGS, INC.
Date: March 8, 2000 By: /s/ George M. Hare
----------------------------------
George M. Hare
Chief Financial Officer
(Principal Financial and Accounting Officer)
EXHIBIT 99
NEWS RELEASE
FOR IMMEDIATE RELEASE Company Contacts:
- --------------------- -----------------
Barrett C. O'Donnell
Chairman of the Board
(770) 644-6700
R. Bruce Dewey
CEO and President
(770) 644-6700
Simione Central Holdings, Inc. Holds Stockholders' Meeting, Completes Merger
with MCS, Inc., Receives Investment from Mestek, Inc. for $2 Million of New
Capital and Effects Reverse Stock Split.
Atlanta, GA (March 8, 2000) Simione Central Holdings, Inc. (NASDAQ:SCHI and
SCHID) announced today that it held its stockholder meeting on March 7, 2000 and
received approval for and immediately closed on the merger with MCS, Inc.
(formerly a wholly-owned subsidiary of Mestek, Inc. (NYSE:MCC)). MCS was
spun-off to the stockholders of Mestek and, following approval of the merger at
a stockholder meeting of MCS on March 7, 2000, was merged with and into Simione
Central. Simione stockholders also approved a proposal to allow the Simione
Board to effect a reverse stock split. The Board effected a one-for-five reverse
stock split of the Simione common stock. The reverse stock split is effective as
of March 7, although trading on a post-split basis on Nasdaq will not begin
until March 8. The reverse split was necessary if the Simione common stock is to
continue to trade on Nasdaq or certain other exchanges. As previously announced,
Simione had a hearing with Nasdaq on March 3 to determine the status of its
Nasdaq listing. The results of that hearing have not been determined by Nasdaq
or communicated to Simione.
Upon the closing of the merger, an additional approximately $2 million was
contributed to Simione Central by Mestek and two short-term loans were canceled
(resulting in an aggregate investment of $6 million in Simione Central by
Mestek) in return for newly issued Series B Preferred Stock of Simione Central
with voting rights, following the reverse split, equivalent to 2.24 million
shares of Simione Central common stock and a warrant for 400,000 post-split
shares of Simione Central common stock. Also, Mestek converted its $850,000
promissory note into 850,000 shares of Series C Preferred Stock, with voting
rights equivalent to 170,000 shares of Simione common stock following the
reverse split.
The stockholders took several other actions, including:
* the election of six directors (Dr. David O. Ellis, James A. Gilbert, Daniel
J. Mitchell, Barrett C. O'Donnell, Jesse I. Treu, and William J. Simione,
Jr.);
* Approval of the conversion of the Series A Preferred stock issued in the
CareCentric merger into Simione common stock; and
* Approval of an increase in the number of shares authorized under Simione's
stock incentive plan.
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The MCS merger agreement provides for the expansion of the Simione Board to
twelve members and the appointment of six new directors designated by the MCS
stockholders. At the MCS stockholders meeting, John E. Reed, Stewart B. Reed,
Winston R. Hindle, Jr., David W. Hunter, Edward K. Wissing and R. Bruce Dewey
were selected as the MCS designees. The Simione Board immediately appointed
these designees to the Simione Board.
John E. Reed, Chairman and CEO of Mestek, stated, "For the last three or
four years Mestek has been searching for a way of maximizing the values inherent
in its proven software solutions for the home medical equipment and home health
agency services. This combination with Simione will not only result in achieving
efficiencies naturally gained through the combination of existing significant
customer bases but will provide the critical mass essential to accelerated
product development. This is particularly important at this time due to the
requirements of the federal government's new regulations relating to
reimbursement which will dramatically affect the home healthcare industry." R.
Bruce Dewey, President and CEO of Simione stated, "We are very pleased to
finally complete the merger with MCS, architect of HMExpress(tm), a
windows-based home medical equipment program, and MestaMed(tm), a comprehensive
solution for the integrated home health provider. We are excited about combining
the knowledge, experience and vision of the MCS, Simione, and CareCentric(tm)
groups to position the company as the largest information technology company
focused solely on serving the needs of home healthcare providers."
Simione Central provides information systems and consulting services to
hundreds of customers nationwide. Simione Central provides freestanding,
hospital-based and multi-office home health care providers (including certified,
private duty, staffing, HME, IV therapy and hospice) with complete information
solutions that address all aspects of home care operations. With offices
nationwide, the company is headquartered in Atlanta, Georgia.
Mestek, Inc., listed on the New York Stock Exchange (MCC), is a diversified
manufacturer of heating, ventilating and air conditioning equipment, metal hose
and hose products, aluminum extrusions, metal-forming machinery and vertically
integrated software systems and services, headquartered in Westfield,
Massachusetts.
Note regarding Private Securities Litigation Reform Act: Statements made in this
press release which are not historical facts, including projections, statements
of plans, objectives, expectations, or future economic performance, are forward
looking statements that involve risks and uncertainties and are subject to the
safe harbor created by the Private Securities Litigation Reform Act of 1995.
Simione's future financial performance could differ significantly from that set
forth herein, and from the expectations of management. Important factors that
could cause the Simione's financial performance to differ materially from past
results and from those expressed in any forward looking statements include,
without limitation, risks associated with integration following the MCS merger,
variability in quarterly operating results, customer concentration, product
acceptance, long sales cycles, long and varying delivery cycles, Simione's
dependence on business partners, emerging technological standards, risks
associated with acquisitions, and risk factors detailed from time to time in
Simione's periodic reports filed with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates.
