PRESS RELEASE
Filed by Moyco Technologies, Inc. pursuant to Rule 425 under the Securities Act
of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange
Act of 1934
Subject Company: Metropolitan Health Networks, Inc.
Commission File No.: 000-28456
Date: June 10, 2002
The following press release was jointly issued by Moyco Technologies,
Inc. and Metropolitan Health Networks, Inc.
Contact: Metropolitan Health Networks, Inc. Investor Relations
Andrew Sternberg Cameron Associates, Inc
561.805.8500 Lester Rosenkrantz
212.245.8800
lester@cameronassoc.com
MOYCO AND METROPOLITAN HEALTH NETWORKS SIGN
LETTER OF INTENT TO MERGE
MONTGOMERYVILLE, Pa and WEST PALM BEACH, Fla. -- Moyco Technologies, Inc.
(Nasdaq: MOYC), has signed a letter of intent to acquire and merge with
Metropolitan Health Networks, Inc. (OTC: MDPA), a provider of healthcare
services and a prescription drug business with $130 million in annual revenues
for its last fiscal year ended December 31, 2001. The letter of intent has been
unanimously approved by the independent directors of both companies. The
transaction will be structured as an exchange of stock whereby each share of
Metropolitan will be exchanged for one share of Moyco common stock. All
outstanding options and warrants will be exchanged on a similar basis.
The parties expect to execute definitive agreements by July 15th, 2002 and
anticipate closing the transaction on or before September 30, 2002. The closing
is subject to certain conditions including approval by the Board of Directors
and shareholders of both companies, receipt of all third party consents, and
continued listing of Moyco on Nasdaq or a new listing on the American Stock
Exchange.
Moyco, with over one hundred years of history as a manufacturer and distributor
of medical products predominantly in the dental market and a public company
since 1968, has decided to re-enter the multi-billion dollar health-care
industry after evaluating the market and Metropolitan's significant presence in
Florida, its growth plan, and potential to increase shareholder value. Until May
2001, Moyco was a manufacturer, marketer, and distributor of professional dental
supplies. Moyco was able to sell this business for about $20 million including
the assumption of certain liabilities. This transaction provided shareholders of
Moyco with a partial liquidating dividend of $1.45 per share. Moyco continues to
operate its precision abrasives business through its wholly owned subsidiary,
Moyco Precision Abrasives, Inc.
Once the merger is completed, Metropolitan shareholders will have the benefit of
aligning with a well-established NASDAQ company that has the ability to provide
access to the financial markets to continue to enhance the implementation of its
business plan. Metropolitan plans to expand its pharmacy division and its health
care services with the filing of its application to become its own HMO in
targeted underserved Medicare markets in FloridaMetropolitan is a provider of
health care services through its Provider Service Network (PSN) and prescription
drug business with estimated annualized revenues of $150 million for 2002. Its
PSN assumes the risk for and manages the provisions of health care services for
patients through contracts entered into with Health Maintenance Organizations.
Its pharmacy division, Metcare Rx, operates pharmacies in Florida, New York and
Maryland. For the fiscal year ended December 31, 2001 Metropolitan reported
revenues of $130 million and net income of $1 million or $0.04 per share. For
the first quarter ending March 31, 2002 Metropolitan reported revenues of $38
million and net income of $800,000 or $0.03 per share.
Commenting on the letter of intent, Moyco CEO and President, Marvin E. Sternberg
stated, "We are delighted to have this opportunity to combine our companies and
pursue an exciting business plan in a multi-billion dollar market that has
tremendous revenue and profit potential. We fully recognize Metcare's needs and
will use every available resource to support this growth."
In addition to the prior healthcare industry experience of Moyco management,
Marvin E. Sternberg, Chief Executive Officer and Chairman of the Board of Moyco
will provide the combined companies with significant financial and operational
expertise. Marvin Sternberg currently serves on the Board of Directors of
Pennsylvania Business Bank and the RBB Fund, a family of mutual funds. He is
also a Director of Cellucap Manufacturing Company, a private producer of
disposable headwear and garments used in the healthcare industry. Certain
members of Moyco's current Board of Directors will provide additional healthcare
and financial industry experience and it is expected that these individuals will
add depth of knowledge and abilities to the Board of Directors of the combined
companies.
After the merger, Marvin E. Sternberg, brother of Fred Sternberg, Chairman and
CEO of Metropolitan, will continue as the Chief Executive Officer and Chairman
of the Board of the combined entities. Fred Sternberg will continue as President
and CEO of Metropolitan and Debbie Finnel will continue as Chief Operating
Officer of Metropolitan. It's anticipated the combined company will have nine
members of the Board of Directors with five appointed by Moyco and four
appointed by Metropolitan of which at least five will be independent directors.
Metropolitan will continue to operate their businesses with the present
management teams in place as a wholly owned subsidiary of Moyco. Moyco's
precision abrasives subsidiary will likewise continue to operate with its
present management team as a wholly owned subsidiary of Moyco.
ABOUT METROPOLITAN HEALTH NETWORKS, INC.
METCARE is a growing healthcare organization in Florida. The Company currently
provides healthcare services for approximately 45,000 patients and is part of a
Network of physicians serving more than a million people from Miami to Daytona
Beach on Florida's East Coast. Metcare Rx Pharmacy Services provides
comprehensive pharmacy benefits management programs, specialty pharmacy and
services to medical groups managed care organizations, long-term care facilities
and outpatient hospital pharmacies. Metcare Rx's integrated approach is designed
to provide clients with programs and services that will allow them to deliver
quality pharmaceutical care in a cost-effective manner.
To learn more about Metropolitan Health Networks, Inc., please visit its website
at www.metcare.com.
ABOUT MOYCO TECHNOLOGIES, INC.
Moyco Technologies, Inc., through its wholly owned subsidiary, Moyco Precision
Abrasives, Inc., manufactures, markets, and distributes extremely uniform and
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fine abrasive films, commercial coated abrasives, slurries, polishing agents and
related products. Moyco also provides technical assistance to its customers to
optimize various polishing processes for the purpose of improving production
yields and finished product performance. Moyco polishing materials are used by
customers in various industries for a wide range of applications including, but
not limited to, fiber-optics, metallurgical, semiconductor, lapidary, automotive
parts, nail files, surgical and hobby. Until May 25, 2001, Moyco was also
engaged in the manufacturing and marketing of professional dental supplies.
METROPOLITAN HEALTH NETWORKS, INC. AND MOYCO TECH.
PROFORMA BALANCE SHEETS
MARCH 31, 2002
MDPA MOYCO COMBINED
---- ----- --------
TOTAL CURRENT ASSETS 18,322,343 4,189,018 22,511,361
TOTAL ASSETS 23,007,128 6,681,071 29,688,199
TOTAL CURRENT LIABILITIES 11,376,739 774,091 12,150,830
STOCKHOLDERS EQUITY 11,272,925 4,709,349 15,982,274
WORKING CAPITAL 6,945,604 3,414,927 10,360,531
To learn more about Moyco, please visit its website at www.moycotech.com.
Forward-Looking Statements
Statements in this news release that are not descriptions of historical facts
are forward-looking statements that are subject to risks and uncertainties.
Words such as "expect," "intends," "believes," "plans," "anticipates," and
"likely," also identify forward-looking statements. All forward-looking
statements are based on current facts and analysis. Actual results may differ
materially from those currently anticipated due to a number of factors
including, but not limited to, competition, future capital needs, the need for
market acceptance, dependence upon third parties, and disruption of vital
infrastructure intellectual property. All forward-looking statements are made
pursuant to the Securities Litigation Reform Act of 1995. Additional information
on factors that may affect the business and financial results of Moyco and
Metropolitan can be found in filings with the Securities and Exchange
Commission.
SOURCE: Moyco Technologies, Inc.
Note: The following notice is included to meet certain legal requirements:
FORWARDING-LOOKING STATEMENTS
The enclosed information contains forward-looking statements within the
meaning of the "safe harbor" provisions of the united States Private Securities
Litigation Reform Act of 1995. Investors are cautioned that such forward-looking
statements with respect to revenues, earnings, performance, strategies,
prospects and other aspects of the business of Moyco Technologies, Inc.
("Moyco") are based on current expectations that are subject to risks and
uncertainties. A number of factors could cause actual results or outcomes to
differ materially from those indicated by such forward-looking statements. These
factors include, but are not limited to, risks and uncertainties set forth in
Moyco's filings with the Securities and Exchange Commission ("SEC"), including
risks and uncertainties relating to: failure to obtain and retain expected
synergies from the proposed transaction with Metropolitan Health Networks, Inc.
("Metcare") relating to Metcare's operations, delays in obtaining, or adverse
conditions contained in, any regulatory approvals required for the proposed
transaction, changes in laws or regulations, availability and cost of capital
and other similar factors. Readers are referred to Moyco's and Metcare's most
recent reports filed with the SEC. Moyco and Metcare are under no obligation to
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(and expressly disclaim any such obligation to) update or alter their
forward-looking statements whether as a result of new information, future events
or otherwise.
ADDITIONAL INFORMATION
In connection with the proposed transaction, Moyco and Metcare will
file a joint proxy statement/prospectus with the SEC. INVESTORS AND SECURITY
HOLDERS ARE URGED TO CAREFULLY READ THE JOINT PROXY STATEMENT/PROSPECTUS
REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free
copy of the joint proxy statement/prospectus (when it is available) and other
documents containing information about Moyco and Metcare, without charge, at the
SEC's web site at http://www.sec.gov. Free copies of Moyco's filings may be
obtained by directing a request to Moyco Technologies, Inc.,200 Commerce Drive,
Montgomeryville, Pa. 18936 Attention: Secretary. Free copies of Metcare's
filings may be obtained by directing a request to Metropolitan Health Networks,
Inc., 500 Australian Avenue South, Suite 100, West Palm Beach, Florida 33401,
Attention: Secretary.
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