8-K 1 f84453e8vk.txt FORM 8-K UNITED STATES 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) - AUGUST 30, 2002 COMMISSION FILE NUMBER 000-25313 AGEMARK CORPORATION (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER) NEVADA 94-32701689 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 2614 Telegraph Avenue, Berkeley, California 94704 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (510) 548-6600 AGEMARK CORPORATION FORM 8-K TABLE OF CONTENTS ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On August 30, 2002, Agemark Corporation (the "Company") completed the sale of certain assets and liabilities related to the ownership and operation of its 85-bed assisted living facility located in Cumberland, MD (the "Kensington Algonquin"). Previously, on July 1, 2002, the Company sold its interest in the CountryHouse, LLC joint venture, which operates a 22-bed Alzheimer's facility in Cumberland, MD. The members of the CountryHouse, LLC joint venture were the Company, Richard J. Westin and Jesse A. Pittore. The Company sold its 25% member interest in the CountryHouse, LLC joint venture to its joint venture co-members Richard J. Westin and Jesse A. Pittore for $200,000. Mr. Westin is the chief executive officer and a director of the Company and Mr. Pittore is an officer and director of the Company. The purchase price was paid in cash and the transaction closed July 1, 2002. Title to the Kensington Algonquin facility was transferred to Kensington Algonquin, LLC, a Nevada single member limited liability company, wholly owned by the Company in calendar year 2000 in anticipation of a financing transaction that was never consummated. Since that transfer the entity has been 100% owned by the Company. The form of the August 30, 2002 transaction was the sale of the Company's member interest to Richard J. Westin and Jesse A. Pittore for a price of $3,300,000. The Company received approximately $2,500,000 after credits for financing assumed and deferred maintenance, which funds were provided by a new first mortgage note secured by the facility. The funds received have since been used to repay secured debt, thereby extending the due date of the Company's secured indebtedness from September 30, 2002 to September 30, 2003. As indicated above, the purchasers in these two transactions are affiliates of the Company. Both Richard J. Westin and Jesse A. Pittore are officers and directors of the Company. Their offers for these property interests of $200,000 and $3,300,000 were tested in an auction process that took place during the month of May, 2002. The auction was advertised in the national edition of the Wall Street Journal and the Baltimore Sun. These advertisements produced approximately 30 responses for additional information. Each of the respondents to the advertisements was sent additional information regarding the property and the auction process. No further interest in the property was expressed by any of these respondents. None of the respondents pursued the auction further by visiting the property or bidding on the property. The auction was held on June 5, 2002. The only bids made on the property were those by Messrs Westin and Pittore. The properties were sold to Messrs Westin and Pittore. The purchase transaction consisted of the following elements: Sales price $ 3,300,000 Credit for repair of elevator and renovation of kitchen (200,000) Debt assumed (550,000) Taxes paid net of credits (50,000) ----------- Net proceeds $ 2,500,000 ===========

The dispositions are reflected in the Company's unaudited pro forma financial information filed as part of this report in Item 7. ITEM 7. FINANCIAL STATEMENTS & EXHIBITS The following exhibits are filed as part of this report: (a) Not applicable (b) Pro forma financial information (Schedule A) (c) Exhibits 10.9 Purchase Agreement dated May 1, 2002 by and between Jesse Pittore, Richard Westin and Agemark Corporation. 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 thereunto duly authorized. AGEMARK CORPORATION September 13, 2002 ________________________________________ Richard J. Westin, Chief Executive Officer September 13, 2002 ________________________________________ James P. Tolley, Chief Financial Officer and Principal Accounting Officer \ -SCHEDULE A- On August 30, 2002, Agemark Corporation (the "Company") completed the sale of certain assets and liabilities related to the ownership and operation of its Cumberland, MD facility (the "Kensington Algonquin"). Previously, on July 1, 2002, the Company sold its interest in the CountryHouse, LLC joint venture, which also operates a facility in Cumberland, MD. The Company sold its 25% member interest in the CountryHouse, LLC joint venture to its joint venture co-members Richard J. Westin and Jesse A. Pittore for $200,000. The purchase price was paid in cash and the transaction closed July 1, 2002. The Company sold its interest in the Kensington Algonquin for a price of $3,300,000. The Company received approximately $2,500,000 after credits for financing assumed and deferred maintenance, which funds were provided by a new first mortgage note secured by the facility. The funds received have since been used to repay secured debt, thereby extending the due date of the Company's indebtedness from September 30, 2002 to September 30, 2003. The purchase transaction consisted of the following elements: Sales price $ 3,300,000 Credit for repair of elevator and renovation of kitchen (200,000) Debt assumed (550,000) Taxes paid net of credits (50,000) ----------- Net proceeds $ 2,500,000 ===========

The following statements of operations for the year ended September 30, 2001 and the nine months ended June 30, 2002 give effect to the sale of the interests in the CountryHouse, LLC joint venture and the Kensington Algonquin, LLC as if the transaction had occurred at the beginning of fiscal 2001 and 2002, respectively. The pro forma balance sheet as of June 30, 2002 gives effect to the sale of the interests in the CountryHouse, LLC joint venture and the Kensington Algonquin, LLC as if the transaction had occurred as of that date and the proceeds had been used to pay secured indebtedness. The proforma financial data presented herein is based on management's estimate of the effects of the sales based on currently available information and certain assumptions the Company believes are reasonable. The Company does not expect the receipt of additional information regarding these transactions to have a material effect on the pro forma financial data. The pro forma statements of operations for the year ended September 30, 2001 and the nine months ended June 30, 2002 and the pro forma balance sheet as of June 30, 2002 are unaudited, but in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of operations and financial position for the periods presented. The pro forma statements of operations for the year ended September 30, 2001 and the nine months ended June 30, 2002, and the pro forma balance sheet as of June 30, 2002 are not necessarily indicative of the results of operations or financial position that actually would have been achieved had the transactions described been consummated as of the dates indicated, or that may be achieved in the future. AGEMARK CORPORATION PRO FORMA BALANCE SHEET JUNE 30, 2002 (IN THOUSANDS EXCEPT SHARE DATA)

AGEMARK CORPORATION PRO FORMA STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 2001 (IN THOUSANDS EXCEPT SHARE DATA)

AGEMARK CORPORATION PRO FORMA STATEMENT OF OPERATIONS Nine Months Ended June 30, 2002 (In thousands except share data)

Pro Forma Adjustments (1) Reflects the sale of the Company's interest in the Kensington Algonquin facility. (2) Reflects the sale of the Company's interest in the CountryHouse, LLC joint venture. (3) Reflects the payment of $2,500,000 to retire secured debt and accrued interest.

AGEMARK CORP 8-K