SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934
May 21, 1999
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Date of Report (date of earliest event reported)
NEWCARE HEALTH CORPORATION
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Exact name of Registrant as Specified in its Charter
Nevada 0-24110 86-0594391
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State or Other Jurisdiction Commission File IRS Employer Identification
of Incorporation Number Number
6000 Lake Forrest Drive, Suite 200, Atlanta, Georgia 30328
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Address of Principal Executive Offices, Including Zip Code
(404) 255-7500
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Registrant's Telephone Number, Including Area Code
ITEM 5. OTHER EVENTS.
On May 21, 1999, NewCare Health Corporation (the "Company") entered into
a Management Services Agreement, a Corporate Management Agreement and a
Purchase Agreement (the "Agreements") with Lenox Healthcare, Inc. ("Lenox"), a
privately-held provider of long-term healthcare facilities headquartered in
Pittsfield, Massachusetts. Under the terms of the Agreements, effective June
1, 1999, Lenox will begin managing the Company's facilities and many of the
Company's corporate operations.
Lenox will receive a management fee for managing the Company's facilities
equal to a proportionate share (taking into account both the Company's
facilities and the other facilities operated or managed by Lenox) of the costs
incurred by Lenox in operating its headquarters during its last fiscal year.
In addition, Lenox will be reimbursed for its actual costs for providing
corporate management services.
Under the Agreements, Lenox will also purchase 500,000 shares of the
Company's Common Stock for $500,000 in cash and receive warrants to purchase
an additional 500,000 shares of Common Stock at $2.20 per share through June
1, 2004. The Company has granted Lenox certain demand and other registration
rights with respect to the shares of Common Stock to be issued initially and
issuable under the Warrants. The costs of such registration would be borne by
the Company.
The Agreements provide that the Company will immediately take measures to
appoint two persons designated by Lenox to serve as Directors of the Company.
The two persons selected to serve as new Directors are Thomas Clarke, the
President of Lenox and Linda M. Clarke, the Treasurer of Lenox. Harlan
Mathews and Mark Clein have agreed to resign as Directors of the Company to
facilitate this change.
Thomas M. Clarke (age 43) has been President of Lenox since 1991. Mr.
Clarke has over 19 years of experience in the healthcare industry. From May
1987 until the founding of Lenox in 1991, he was Treasurer and Chief Financial
Officer of Berkshire Health Systems, Inc. in Pittsfield, Massachusetts.
Linda M. Clarke (age 46) is the wife of Thomas M. Clarke and has been
Treasurer of Lenox since 1991. During a portion of this time she was also
employed by the Houlton Regional Hospital Development Office. She continues
to serve as treasurer of several privately-held health care companies.
Upon effectiveness of the Agreements, the Company intends to begin
immediate staff reductions at its corporate headquarters, including executive
officer positions. The Company may be required to make payments under
severance provisions of current employment agreements and incur other expenses
related to reducing its corporate activities.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) EXHIBITS.
EXHIBIT NO. DESCRIPTION LOCATION
Exhibit 10.1 Management Services Agreement Filed herewith
with Lenox Healthcare, Inc. electronically
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Exhibit 10.2 Corporate Management Agreement Filed herewith
with Lenox Healthcare, Inc. electronically
Exhibit 10.3 Purchase Agreement with Filed herewith
Lenox Healthcare, Inc. electronically
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.
NEWCARE HEALTH CORPORATION
Dated: June 4, 1999 By:/s/ Darrell C. Tucker
Darrell C. Tucker, President
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