<PAGE> 1
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 8-K/A-1
CURRENT REPORT ON FORM 8-K
Pursuant to Section 13 OR 15(d) of The Securities Act of 1934
Date of Report (Date of earliest event reported) October 24, 1996
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NEWCARE HEALTH CORPORATION
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(Exact name of Registrant as specified in its charter)
NEVADA
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(State or other jurisdiction of incorporation or organization)
0-24110
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(Commission File Number)
86-0594391
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(IRS Employer Identification Number)
3600 OAK MANOR LANE, BLDG. 4, LARGO, FL 33774
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(Address of principal executive office)
(813) 586-4262
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(Registrant's phone number)
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Introduction
This Form 8-K/A-1 is an amendment to the Current Report on Form 8-K dated
October 24, 1996, and filed with the Commission on November 7, 1996. This
amendment is being filed to supplement such Form 8-K with Pro Forma financial
statements that were impracticable to provide at the time of such filing.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 24, 1996, NewCare Health Corporation ("NewCare") signed a definitive
agreement with NCS Healthcare of Florida, Inc. ("NCS") to sell all the operating
assets of NewCare's Spectrum Health Services, Inc. subsidiary for cash and the
assumption of certain Spectrum debt by NCS. Spectrum operates in the businesses
of institutional and correctional pharmacy, medical supply and equipment, home
infusion and I. V. services. The consideration paid by NCS was approximately
$10,167,000. Of this amount, approximately $7,646,000 was received in cash,
$680,000 was a "hold-back" pending the outcome of inventory, accounts
receivable, and certain other adjustments and approximately $1,841,000 was in
the form of liabilities assumed by NCS. In connection with the transaction
NewCare paid approximately $531,000 of the cash proceeds to retire certain
Spectrum obligations and borrowings that were not assumed by NCS and to pay
certain costs of the transaction. Spectrum's assets and liabilities as of
September 30, 1996, subject to certain adjustments, was used in determining the
consideration paid by NCS for Spectrum.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired - Not applicable
(b) Pro forma Financial Statements
The following unaudited pro forma condensed consolidated financial
statements are filed with this report:
Pro Forma Condensed Consolidated Balance Sheet at September 30, 1996:
Page F-1
Pro Forma Condensed Consolidated Statements of Operations:
Year ended December 31, 1995 Page F-2
Nine months ended September 30, 1996 Page F-3
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The Pro Forma Condensed Balance Sheet of registrant as of September 30,
1996 reflects the financial position of registrant after giving effect to the
disposition of certain assets and the assumption of the liabilities discussed in
Item 2 as well as the elimination of the excess of costs over net assets related
to the 1994 acquisition of Spectrum and assumes the disposition took place on
September 30, 1996.
The Pro Forma Condensed Consolidated Statements of Operations for the
year ended December 31, 1995 and the nine months ended September 30, 1996 assume
that the disposition occurred on January 1, 1995, and are based on the
operations of the registrant for the year ended December 31, 1995 and the nine
months ended September 30, 1996.
The unaudited pro forma condensed consolidated financial statements
have been prepared by the Registrant based upon assumptions deemed proper by it.
The unaudited pro forma condensed consolidated financial statements presented
herein are shown for illustrative purposes only and are not necessarily
indicative of the future financial position or future results of operations of
Registrant, or of the financial position or results of operations of Registrant
that would have actually occurred had the transaction been in effect as of the
date or for the periods presented. In addition, it should be noted that the
Registrant's financial statements will reflect the disposition only from October
24, 1996, the closing date.
The unaudited pro forma condensed consolidated financial statements
should be read in conjunction with the historical financial statements and
related notes of Registrant.
(c) Exhibits:
Exhibit
Number Description
- ------ -----------
2.1 Asset Purchase Agreement, dated October 24, 1996. **
99.1 Press Release on the NewCare's contract to sell the
operating assets of its subsidiary Spectrum Health
Services, Inc. dated October 24, 1996. **
** Previously filed with the Company's Current Report on Form 8-K filed
with the Commission on November 7, 1996.
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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.
NewCare Health Corporation
By: /s/ Henry H. Sherrill, Jr.
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Principal Financial and
Accounting Officer and
Authorized Signatory for
the Registrant
January 2, 1997
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Pro Forma Financial Information
NewCare Health Corporation and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet at September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Historical Spectrum (a) Pro Forma
---------- ------------ ---------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 426,091 $ 7,070,648 $ 7,496,739
Accounts receivable, net of allowance
for doubtful accounts 4,048,400 (2,070,800) 1,977,600
Inventory 982,821 (954,145) 28,676
Prepaid expenses 221,769 (78,300) 143,469
------------ ------------ -----------
Total current assets 5,679,081 3,967,403 9,646,484
Property and equipment, net 24,568,359 (1,277,188) 23,291,171
Excess of costs over net assets of businesses
acquired, net of accumulated amortization 5,075,968 (4,790,859) 285,109
Other assets, net 1,538,598 58,814 1,597,412
------------ ------------ -----------
Total assets $ 36,862,006 $ (2,041,830) $34,820,176
============ ============ ===========
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 6,637,227 $ (176,743) $ 6,460,484
Notes payable 1,811,557 (223,209) 1,588,348
Borrowings under line-of-credit 248,608 (248,608) 0
Accounts payable 2,374,570 (1,199,403) 1,175,167
Accrued liabilities 1,879,762 (29,245) 1,850,517
Deferred revenue 75,540 0 75,540
Estimated third-party payor settlements 58,775 58,775
------------ ------------ -----------
Total current liabilities 13,086,039 (1,877,208) 11,208,831
Estimated third-party payor settlements 141,337 0 141,337
Deferred interest payable 126,000 0 126,000
0
Long-term debt 16,819,057 (355,247) 16,463,810
------------ ------------ -----------
Total Liabilities 30,172,433 (2,232,455) 27,939,978
Shareowners' equity 6,689,573 190,625 6,880,198
------------ ------------ -----------
Total liabilities and shareowners' equity $ 36,862,006 $ (2,041,830) $34,820,176
============ ============ ===========
</TABLE>
(a) To eliminate certain assets and liabilities of Spectrum as of September
30, 1996, reflect net proceeds from sale of Spectrum , and eliminate
excess of costs over net assets of businesses related to 1994
acquisition of Spectrum.
F-1
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Pro Forma Financial Information
NewCare Health Corporation and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
For the year ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Historical Spectrum (a) Pro Forma
---------- ------------ ---------
<S> <C> <C> <C>
Net revenues $ 39,770,460 $ 17,190,797 $ 22,579,663
Costs and expenses:
Compensation and related 17,253,076 4,100,786 13,152,290
Operating and administrative 19,489,869 12,211,684 7,278,185
Interest 1,668,901 154,005 1,514,896
Depreciation and amortization 1,494,836 727,082(b) 767,754
------------ ------------ ------------
Total costs and expenses 39,906,682 17,193,557 22,713,125
------------ ------------ ------------
Income (loss) before income taxes (136,222) (2,760) (133,462)
Provision for income taxes 36,000 36,000
------------ ------------ ------------
Net income (loss) $ (172,222) $ (2,760) $ (169,462)
============ ============ ============
Earnings (loss) per share $ (0.02) $ (0.02)
============ ============
Weighted average number of
common shares outstanding 10,390,073 10,390,073
============ ============
</TABLE>
(a) To eliminate the profit and loss of Spectrum for the entire period.
(b) Includes $171,192 amortization of goodwill related to Spectrum.
F-2
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Pro Forma Financial Information
NewCare Health Corporation and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
For the nine months ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Historical Spectrum (a) Pro Forma
---------- ------------ ---------
<S> <C> <C> <C>
Net revenues $ 33,023,531 $ 11,866,577 $21,156,954
Costs and expenses:
Compensation and related 15,157,172 3,191,564 11,965,608
Operating and administrative 15,447,884 9,010,288 6,437,596
Interest 1,413,538 143,115 1,270,423
Depreciation and amortization 1,202,011 551,772(b) 650,239
------------ ------------ -----------
Total costs and expenses 33,220,605 12,896,739 20,323,866
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Income (loss) before loss on disposal of Spectrum (197,074) (1,030,162) 833,088
Estimated loss on disposal of Spectrum (1,700,000) (1,700,000) --
------------ ------------ -----------
Income (loss) before gain on restructuring of debt (1,897,074) (2,730,162) 833,088
Extraordinary item - gain on restructuring of debt 691,668 691,668
------------ ------------ -----------
Net income (loss) $ (1,205,406) $ (2,730,162) $ 1,524,756
============ ============ ===========
Per share of common stock
Income (loss) $ (0.17) $ 0.08
Gain on restructuring of debt 0.06 0.06
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Earnings (loss) per share $ (0.11) $ 0.14
============ ===========
Weighted average number of
common shares outstanding 10,797,525 10,797,525
============ ===========
</TABLE>
(a) To eliminate the profit and loss of Spectrum for the entire period.
(b) Includes $128,394 amortization of goodwill related to Spectrum.
F-3
