In a move that casts doubt on its future operations, Women's Health Centers of America said Thursday that it will sell its three women's health-care centers to San Jose-based Health Discovery Inc. for $50,000.
Health Discovery, which operates three women's health-care facilities in the Bay Area, also agreed to assume about $1.3 million in lease obligations. Two of the WHCA centers are located in San Diego and one in Vista.
The proposed sale, which must be approved by WHCA shareholders, "would leave us with a publicly traded parent company that consists mainly of liquid assets," according to President and Chief Executive Ronald F. Meadows, who declined to say what assets WHCA retained.
However, WHCA will "redeploy those assets in the way that makes sense for our shareholders," he added.
That redeployment could result in the dissolution of WHCA, according to an industry analyst who is familiar with the company. Meadows, however, maintained that WHCA probably would be repositioned as a health-care provider in a different segment of the market.
Health Discovery and WHCA were founded to provide comprehensive health-care services that are offered by predominantly female physicians in an environment that is attractive to women, according to company spokesmen.
Health Discovery, a private company that was founded in 1986, has signed a management contract to operate WHCA's three San Diego locations. WHCA's 20 employees in San Diego will be retained, Meadows said. Physicians who provide service at WHCA's three facilities are not WHCA employees, he added.
WHCA's public offering in 1986 generated $3.6 million. The stock that began trading at $6 in May, 1986, but lately has traded at less than $1.
WHCA has not reported a quarterly profit since its initial public offering. The company reported a $914,759 net loss and $644,235 in revenue for the first six months of its fiscal year ended Sept. 30.
WHCA had trimmed operating losses and boosted revenue during recent months, Meadows noted. But company executives "didn't feel that the capital required (to make those centers profitable) was something we wanted to try and obtain," he said.
Health Discovery "has the resources that will enable them to do more than we could do right now," Meadows said.