CliniCorp announces decision to pursue reorganization under Chapter 11 of the Federal Bankruptcy Code

Business Wire, June 20, 1996

WEST PALM BEACH, Fla.--(BUSINESS WIRE)--June 20, 1996--CliniCorp, Inc. (OTC:CLNI) announced Thursday that the board of directors voted unanimously to petition the Federal Court for protection under Chapter 11 of the United States Bankruptcy Code.

The decision to file for reorganization under Chapter 11 resulted, among other things, from extensive litigation and claims related to past history, the costs of defense related to a purported class action filed over two years ago, a decline in clinic productivity and doctor morale, and an inability to attract new capital under current circumstances.

The company also announced the execution of a contract to sell off all of its owned and operated healthcare clinics, together with all accounts receivable related to such clinics, to a Florida based clinic operator in exchange for (i) the assumption of approximately $2,500,000 of debt, (ii) cash in an amount which is the greater of $50,000 a month or 10% of collections from the sold units for 12 months, and (iii) preferred stock of the Buyer having a face value of $600,000. The Buyer also agreed to help secure satisfactory financing for the continued operation and expansion of Medical Diagnostic Imaging of America Inc. a wholly owned subsidiary of the company. Completion of the transaction is subject to due diligence and Buyer financing, and will need to be approved by the Bankruptcy Court.

The company intends to complete the divestiture of its owned/operated clinic line in order to devote its time, energy and working capital primarily to the continued development of its previously announced Integrated Healthcare Center ("IHC") strategy. Under that strategy, CliniCare Wellness Centers Inc., the company's wholly owned subsidiary, provides value added management services to independently owned IHCs which employ chiropractors, medical doctors and physical therapists to render healthcare services to patients at a common office site. The company intends to establish IHCs in geographically logical clusters in order to market their services to managed care plans.

CliniCorp is a clinic management company listed on the OTC Bulletin Board (symbol:CLNI) with corporate headquarters located at 1601 Belvedere Road, West Palm Beach, Fla. 33406. Telephone 407/684-2225.

CONTACT: CliniCorp, West Palm Beach

Chris Harkins, CFO

407/684-2225, ext. 18