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CURRENT REPORT FOR ISSUERS SUBJECT TO THE
1934 ACT REPORTING REQUIREMENTS
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
JULY 1, 1997
(Date of Report)
FIRST CHOICE HEALTH NETWORK, INC.
(Name of Small Business Issuer as Specified in its Charter)
Commission File No. 0-23998
WASHINGTON 91-1272766
(State or Other Jurisdiction (I.R.S. employer
of Incorporation) identification number)
601 UNION STREET, SUITE 700
SEATTLE, WASHINGTON 98101
(Address of Principal Executive Offices,
Including Zip Code)
Registrant's Telephone Number, Including Area Code: (206) 667-8050
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Item 2. Acquisition of Assets
On July 1, 1997, First Choice Health Network, Inc. (FC Network), First Choice
Health Plan, Inc. (FC Plan), Health First Partners, Inc. (Health First) and
Health Washington, L.L.C. (Health WA) entered into a merger and asset
purchase agreement. The agreement between the four companies consisted of
three transactions as described in the paragraphs below.
First, FC Plan purchased substantially all of the assets of Health WA in
exchange for 36,428 shares of FC Plan Stock. These shares were issued to the
former shareholders of Health WA. The assets of Health WA consisted
primarily of Health WA's rights to various provider and group contracts in
addition to other intangible property including trademarks. The estimated
fair value of Health WA at the time of the merger was estimated to be $5.1
million. These shares represent approximately 13.4% ownership stake in FC
Plan.
Secondly, Health First merged with and into FC Plan with Health First ceasing
operations and FC Plan as the surviving corporation. FC Plan issued 33,572
shares of stock to the former shareholders of Health First for the net assets
of Health First as well as the rights to various provider and group
contracts. The net assets purchased included those assets and liabilities
that existed as of July 1, 1997 which had a book value of approximately $2.7
million. The total estimated fair value of Health First at the time of the
merger was estimated to be $4.7 million. These shares represent
approximately 12.2% ownership stake in FC Plan.
Third, FC Network, formerly the sole shareholder of FC Plan, became obligated
to contribute cash to FC Plan in exchange for 55,436 shares of FC Plan stock.
This is facilitated by a Contribution Agreement that states that FC Network
shall contribute a certain percentage of revenues over the next ten years in
exchange for those shares. FC Network's ownership in the subsidiary, FC
Plan, is now approximately 74.4%.
The fair market values of Health WA and Health First were determined by an
independent actuarial firm.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
FIRST CHOICE HEALTH NETWORK, INC.
Date: September 10, 1997
By: /s/ David Peel
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David Peel
Vice President of Finance
(Principal Financial and Accounting Officer
and Duly Authorized Officer)
