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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 8, 1999
CONTINUCARE CORPORATION
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(Exact Name of Registrant as Specified in Charter)
FLORIDA
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(State or Other Jurisdiction of Incorporation)
0-21910 59-2716023
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(Commission File Number) (Irs Employer Identification No.)
Continucare Corporation
100 Southeast 2nd Street, 36th Floor
Miami, Florida 33131
(Address of Principal Executive Office) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (305) 350-7515
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Effective April 8, 1999, Continucare Corporation, a Florida
corporation (the "Registrant"), sold substantially all the assets of its
rehabilitation subsidiaries, Rehab Management Systems, Inc., a Florida
corporation, IntegraCare, Inc., a Florida corporation, J.R. Rehab Associates, a
North Carolina corporation, and Continucare Occmed Services, Inc., a Florida
corporation (such subsidiaries being collectively referred to as the "Rehab
Companies"), to Kessler Rehabilitation of Florida, Inc., a Florida corporation
("Kessler"). The following summary of the transaction is qualified in its
entirety by the more detailed information contained in the copy of the Asset
Purchase Agreement (the "Agreement') attached as Exhibit 2.1 to this Report.
The Rehab Companies are collectively engaged in the business of
providing outpatient rehabilitation and contract rehabilitation services (the
"Business"). The assets of the Rehab Companies sold pursuant to the terms of
the Agreement primarily include managed care contracts and leases for
facilities where the Business is conducted, together with certain accounts
receivable, inventory and equipment associated with the Business.
In consideration for the assets of the Rehab Companies, Registrant
received approximately $5.5 million in cash, of which $4.0 million was used to
reduce the $5.0 million principal amount outstanding under the Registrant's
term loan with First Union National Bank of Florida. The amount of
consideration paid by Kessler to the Registrant for the assets of the Rehab
Companies was determined through arms' length negotiations between
representatives of the Registrant and Kessler. The Registrant anticipates that
it will recognize a loss of approximately $5.5 - $6.5 million as a result of
this transaction.
J. Kenneth Looloian, a member of Registrant's Board of Directors, also
serves as a member of the Board of Trustees of the Henry H. Kessler Foundation,
an affiliate of Kessler. Mr. Looloian abstained from voting on the terms of the
Agreement as a member of Registrant's Board of Directors.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
The unaudited pro forma financial information of the Registrant as of
December 31, 1998, reflecting the sale of the Rehab Companies is attached hereto
as Exhibit 7(b) and is incorporated herein by reference.
(c) EXHIBITS
2.1 Asset Purchase Agreement, dated as of April 7, 1999, by and among
Continucare Corporation, Rehab Management Systems, Inc., IntegraCare, Inc.,
J.R. Rehab Associates, Inc., Continucare Occmed Services, Inc., and Kessler
Rehabilitation of Florida, Inc.
7(b) Unaudited pro forma financial information of the Registrant as of
December 31, 1998, reflecting the sale of the Rehab Companies.
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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.
CONTINUCARE CORPORATION
Date: April 21, 1999 By: /s/ Charles M. Fernandez
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Charles M. Fernandez
Chairman, Chief Executive Officer and President
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EXHIBIT INDEX
2.1 Asset Purchase Agreement, dated as of April 7, 1999, by and among
Continucare Corporation, Rehab Management Systems, Inc., IntegraCare,
Inc., J.R. Rehab Associates, Inc., Continucare Occmed Services, Inc., and
Kessler Rehabilitation of Florida, Inc.
7(b) Unaudited pro forma financial information of the Registrant as of December
31, 1998, reflecting the sale of the Rehab Companies.