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 31, 1997

                     MEADOWBROOK REHABILITATION GROUP, INC.


             (Exact name of registrant as specified in its charter)

  Delaware                           0-19726                    94-3022377
(State or other                  (Commission File           (I.R.S.  Employer
jurisdiction of                       Number)             Identification Number)
incorporation)

               2200 Powell Street, Suite 800,  Emeryville,  CA 94608 (Address of
                  principal executive offices) (zip code)


               Registrant's telephone number, including area code:
                                 (510) 420-0900








<PAGE>



Item 2.  Acquisition or Disposition of Assets

     On August 31, 1997, a subsidiary of Meadowbrook Rehabilitation Group, Inc.,
a Delaware  corporation  (the  "Company"),  sold five outpatient  rehabilitation
clinics and certain other assets located in Florida and Georgia.  The outpatient
rehabilitation  clinics were located in St. Augustine,  Palatka, Palm Coast, and
Ormond Beach, Florida and in Moultrie,  Georgia. The Company sold the clinics in
two  separate  transactions.  The  purchaser  of the St.  Augustine  and Palatka
outpatient rehabilitation clinics and certain other assets, was Remlap Services,
Inc., and the purchaser of the Ormond Beach, Palm Coast, and Moultrie outpatient
rehabilitation  clinics was Titan Healthcare,  Inc. The aggregate sale price for
the outpatient rehabilitation clinics and other assets was $550,000. The Company
received  promissory notes from the purchasers for the aggregate  purchase price
($215,000 from Remlap Services, Inc. and $335,000 from Titan Healthcare,  Inc.).
The  promissory  notes are secured by the  acquired  assets and the Company also
received personal guarantees from the shareholders of Remlap Services,  Inc. and
Titan  Healthcare,  Inc. The purchasers  acquired all assets including  accounts
receivable  and are  responsible  for all accounts  payable and certain  payroll
liabilities.  As part of the  transaction,  the Company retained all liabilities
for amounts due to the former owners of the clinics. At closing, this amount was
$197,000.

     This transaction resulted in a loss of $2,046,000, primarily as a result of
the write-off of goodwill  associated with the Company's  acquisition of certain
of the clinics in 1994. The loss will be recorded as other operating  expense in
the Company's  financial  statements  for the twelve months ended June 30, 1997.
The selling price for the clinics and other assets sold was determined  based on
arms-length  negotiations  between the parties. Kim Palmer, the Company's former
Vice  President  of  outpatient  operations,  is a  shareholder  in both  Remlap
Services,  Inc.  and Titan  Healthcare,  Inc.  Otherwise,  there was no material
relationship  between  either of the  purchasers  and the  Company or any of its
affiliates,  any director or officer of the Company or any associate of any such
director or officer.




<PAGE>



Item  7.      Financial Statements and Exhibits.


         (b)  Pro Forma financial information required pursuant to Article 11 of
              Regulation S-X.

              The  following  Pro  Forma   financial   statements  are  included
              following the signature page to this Form 8-K:

              Introduction  to the Pro Forma  Condensed  Consolidated  financial
              information.

              Pro Forma  Condensed  Consolidated  Balance  Sheet as of March 31,
              1997 (unaudited).

              Pro Forma  Condensed  Consolidated  Statements  of Income  for the
              twelve  months  ended June 30, 1996 and for the nine months  ended
              March 31, 1997 (unaudited).

              Notes to Pro Forma Condensed  Consolidated  financial  information
              (unaudited).

         (c)  Exhibits:

     Exhibit 2.1 Agreement of Purchase and Sale, dated August 31, 1997,  between
Remlap  Services,  Inc.,  and Medbrook  Corp.  and the Agreement of Purchase and
Sale, dated August 31, 1997, between Titan Healthcare,  Inc., and Medbrook Corp.
The Registrant agrees to furnish to the Commission  supplementally a copy of the
omitted schedules.



<PAGE>


         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.

         Dated:   September 12, 1997.

                                           MEADOWBROOK REHABILITATION
                                           GROUP, INC.


                                           By:/s/Harvey Wm. Glasser, M.D.
                                           Harvey Wm. Glasser, M.D.
                                           President and Chief Executive Officer


<PAGE>



Item      7(b) Meadowbrook  Rehabilitation  Group,  Inc.  reflecting the sale of
          five  outpatient  rehabilitation  clinics  and  certain  other  assets
          located in Florida and Georgia.  Introduction  to unaudited  Pro Forma
          Condensed Consolidated Financial information.

     The  following   tables  set  forth  the  unaudited  Pro  Forma   Condensed
Consolidated  Balance  Sheet  of the  Company  as of  March  31,  1997,  and the
unaudited Pro Forma Condensed  Consolidated  Statements of Income of the Company
for the twelve  months  ended June 30, 1996 and the nine months  ended March 31,
1997.  The  Pro  Forma  Condensed  Consolidated  Statements  of  Income  include
adjustments  related to the sale of the five outpatient  rehabilitation  clinics
and certain  other  assets in Florida and Georgia  (the  "Assets"),  the sale of
Meadowbrook  Rehabilitation Group of Georgia, Inc. and the sale of the assets of
Meadowbrook  Neurocare-Kansas  City,  Inc.  The  closing  date  for the  sale of
Meadowbrook  Rehabilitation  Group of  Georgia,  Inc.  was  March  31,  1997 and
therefore the Condensed Consolidated Balance Sheet as of March 31, 1997 reflects
the disposition. The Pro Forma Condensed Consolidated Balance Sheet was prepared
assuming that the Company's disposition of the Assets and the sale of the assets
of Meadowbrook Neurocare-Kansas City, Inc. took place on March 31, 1997. The Pro
Forma Condensed  Consolidated  Statements of Income were prepared  assuming that
the  disposition  of  the  Assets,   the  sale  of  the  assets  of  Meadowbrook
Neurocare-Kansas  City, Inc. and the  disposition of Meadowbrook  Rehabilitation
Group of Georgia, Inc. took place as of the beginning of the twelve months ended
June 30,  1996 and at the  beginning  of the nine months  ended March 31,  1997,
respectively.

     The unaudited pro forma financial information furnished herein reflects all
adjustments  for the twelve months ended June 30, 1996 and the nine months ended
March 31, 1997,  respectively,  consisting only of normal recurring  adjustments
which, in the opinion of management, are necessary to fairly state the Company's
financial position and the results of its operations for the periods presented.

     The unaudited pro forma financial  information  does not purport to present
the consolidated  financial  position and consolidated  results of operations of
the Company had the Company's  disposition  of the Assets,  the  disposition  of
Meadowbrook  Neurocare-Kansas  City,  Inc. and the  disposition  of  Meadowbrook
Rehabilitation Group of Georgia,  Inc. actually occurred on the dates indicated;
nor does it purport to be  indicative  of results  that will be  attained in the
future.

     The pro forma financial  information should be read in conjunction with the
Company's  historical   Consolidated  Financial  Statements  and  Notes  thereto
contained  in the  Company's  From 10-K for the fiscal year ended June 30, 1996,
the Company's Form 8-K dated March 31, 1997, and the Company's Form 8-K dated
July 31, 1997.


<PAGE>


<TABLE>
<CAPTION>

                                                  PRO FORMA CONDENSED CONSOLIDATED
                                                            BALANCE SHEET

                                                                                As of March 31, 1997
                                            ----------------------------------------------------------------------------------------
                                                             Kansas Pro Forma               Florida Pro Forma
                                                               Adjustments                     Adjustments
                                                        -------------------------------------------------------------
                                             Actual      Debit          Credit     Ref      Debit        Credit    Ref   Pro Forma
                                          ------------------------------------------------------------------------------------------
<S>                                      <C>           <C>           <C>            <C> <C>           <C>          <C>   <C>
CURRENT ASSETS

       Cash and cash equivalents          $3,639,993   $1,500,000                   (B)                                   $5,139,993
       Net patient accounts receivable     5,122,109                                                    $361,695   (A)     4,760,414
       Due from intermediaries                 9,630                                       $40,369                 (A)        49,999
       Prepaid expenses and other assets   1,198,336                     $2,410     (B)    550,000       361,862   (A)     1,384,064
                                                                                                                         -----------
                                         -----------
       Total current assets                9,970,068                                                                      11,334,470
                                         -----------                                                                     -----------
 PROPERTY AND EQUIPMENT, (net)             1,188,669                    208,148     (B)                  263,104   (A)       717,417
 GOODWILL AND INTANGIBLE
 ASSETS                                    1,820,472                                                   1,468,673   (A)       351,799
                                         -----------                                                                     -----------
       TOTAL ASSETS                      $12,979,209                                                                     $12,403,686
                                         ===========                                                                     ===========
 CURRENT LIABILITIES                      $3,550,872                    146,000     (B)                  181,227   (A)    $3,878,099
 LONG-TERM LIABILITIES                       380,956                                                                         380,956
                                         -----------                                                                     -----------
       Total Liabilities                   3,931,828                                                                       4,259,055
                                         -----------                                                                     -----------
 MINORITY INTEREST                             --                                                                              --
 STOCKHOLDERS' EQUITY
       Common stock                           19,302                                                                          19,302
       Paid-in capital                    17,908,122                                                                      17,908,122
       Retained deficit                  (8,880,043)                  1,143,442     (B)  2,046,192                 (A)   (9,782,793)
                                         -----------                                                                     -----------
           Total stockholders' equity      9,047,381                                                                       8,144,631
                                         -----------   ----------    ----------         ----------    ----------         -----------
 TOTAL LIABILITIES
 AND STOCKHOLDERS' EQUITY                $12,979,209   $1,500,000    $1,500,000         $2,636,561    $2,636,561         $12,403,686
                                         ===========   ==========    ==========          =========    ==========         ===========
<FN>
 Footnotes on page 9.
</FN>
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                                  PRO FORMA CONDENSED CONSOLIDATED
                                                        STATEMENTS OF INCOME

                                                                Year Ended June 30, 1996
                           ----------------------------------------------------------------------------------------------
                                                  Georgia and Kansas              Florida Pro Forma
                                                 Pro Forma Adjustments              Adjustments
                                                -----------------------------------------------------------
                                  Actual         Debit         Credit    Ref     Debit       Credit     Ref    Pro Forma
                              -------------------------------------------------------------------------------------------
<S>                             <C>           <C>             <C>       <C>    <C>          <C>         <C>   <C>
OPERATING REVENUES:

   Net patient revenues         $23,622,560   $12,399,325     $184,000  (F,G)  $2,253,763               (C)    $9,153,472
                                -----------                                                                   -----------
       Net operating revenues    23,622,560                                                                     9,153,472

                                -----------                                                                   -----------
OPERATING EXPENSES:
    Salaries and employee        15,189,173                  7,591,751  (D,F)               $1,274,039  (C,D)   6,323,383
benefits
    Other operating expenses      9,108,509                  4,103,036  (D,F)                1,083,718  (C,D)   3,921,755
                                -----------                                                                   -----------
       Total operating expenses  24,297,682                                                                    10,245,138
                                -----------                                                                   -----------
       Loss from operations       (675,122)                                                                   (1,091,666)
                                -----------                                                                   -----------
OTHER (INCOME) EXPENSE:
    Gain on sale of assets           --                                                                             --
    Interest income               (113,834)                    140,000  (E)                     55,000  (E)     (308,834)
                                -----------                                                                   -----------
       Net other income           (113,834)                                                                     (308,834)
                                -----------                                                                   -----------
       Loss before income taxes   (561,288)                                                                     (782,832)
INCOME TAX PROVISION
  (BENEFIT)                          --                                                                             --
                                -----------                                                                   -----------
NET LOSS BEFORE
MINORITY INTEREST                 (561,288)                                                                     (782,832)
                                -----------                                                                   -----------
MINORITY INTEREST                    29,016                                                     29,016  (C)        --
                                -----------   -----------  -----------         ----------   ----------        -----------
NET LOSS                         ($590,304)   $12,399,325  $12,018,787         $2,253,763   $2,441,662         ($782,832)
                                ===========   ===========  ===========         ==========   ==========        ===========
NET LOSS PER SHARE
   (primary and fully diluted)      ($0.31)                                                                       ($0.41)
                                ===========                                                                   ===========
WEIGHTED AVERAGE COMMON
AND COMMON EQUIVALENT
SHARES OUTSTANDING
                                  1,930,349                                                                     1,930,349
                                ===========                                                                   ===========
<FN>
 Footnotes on page 9.
</FN>
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                                  PRO FORMA CONDENSED CONSOLIDATED
                                                        STATEMENTS OF INCOME

                                                                   Nine Months Ended March 31, 1997
                                      -------------------------------------------------------------------------------------------
                                                       Georgia and Kansas               Florida Pro Forma
                                                      Pro Forma Adjustments                Adjustments
                                                    ---------------------------------------------------------------
                                         Actual        Debit         Credit     Ref     Debit        Credit    Ref    Pro Forma
                                       -----------------------------------------------------------------------------------------

 <S>                                   <C>            <C>          <C>         <C>    <C>          <C>         <C>    <C>          
 OPERATING REVENUES:

      Net patient revenues              $17,013,035   $8,594,961     $138,000  (F,G)  $1,244,531               (C)    $7,311,543
                                       ------------                                                                   ----------
           Net operating revenues        17,013,035                                                                    7,311,543
                                       ------------                                                                   ----------
 OPERATING EXPENSES:
      Salaries and employee benefits     11,926,130                 5,924,265  (D,F)               $1,088,875  (C,D)   4,912,990
      Other operating expenses            6,668,417                 2,869,724  (D,F)                  761,999  (C,D)   3,036,694
                                       ------------                                                                   ----------
           Total operating expenses      18,594,547                                                                    7,949,684
                                       ------------                                                                   ----------
           Loss from operations         (1,581,512)                                                                    (638,141)
                                       ------------                                                                   ----------
 OTHER (INCOME) EXPENSE:
      Gain on sale of assets              (530,942)                                                                    (530,942)
      Interest income                      (38,184)                   105,000  (E)                     41,250  (E)     (184,434)
                                       ------------                                                                   ----------
           Net other income               (569,126)                                                                    (715,376)
                                       ------------                                                                   ----------
           Loss before income taxes     (1,012,386)                                                                       77,235
                                                                                                                      ----------
 INCOME TAX PROVISION
 (BENEFIT)                                 --                                                                              --
                                       ------------                                                                   ----------
 NET LOSS BEFORE MINORITY
 INTEREST                               (1,012,386)                                                                       77,235
                                       ------------                                                                   ----------
 MINORITY INTEREST                           26,660                                                    26,660  (C)         --
                                       ------------   ----------   ----------         ----------   ----------         ----------
 NET LOSS                              ($1,039,046)   $8,594,961   $9,036,989         $1,244,531   $1,918,784            $77,235
                                       ============   ==========   ==========         ==========   ==========         ==========
 NET LOSS PER SHARE
      (primary and fully diluted)           ($0.54)                                                                        $0.04
                                       ============                                                                   ==========
 WEIGHTED AVERAGE COMMON AND COMMON
 EQUIVALENT SHARES OUTSTANDING

                                          1,930,244                                                                    1,930,244
                                       ============                                                                   ==========

</TABLE>


<PAGE>


                     Meadowbrook Rehabilitation Group, Inc.
          Reflecting the Sale of Five Outpatient Rehabilitation Clinics
                       and Certain Other Assets in Florida

         Notes to Pro Forma Condensed Consolidated Financial Information

1.                The amounts  reflected  in these notes are based on  estimates
                  which  are  subject  to  change.   The   following  pro  forma
                  adjustments   were  made  to  the  March  31,  1997  Condensed
                  Consolidated  Balance  Sheet  to  reflect  the  sale  of  five
                  outpatient  rehabilitation clinics and certain other assets in
                  Florida.  The  Company  received  promissory  notes  from  the
                  purchasers for the aggregate purchase price of $550,000.

         (A)      To record the sale of five outpatient  rehabilitation  clinics
                  and  certain  other  assets in  Florida  and  Georgia  and the
                  assumption of certain liabilities by the purchasers.

         (B)      To  record   the  sale  of  certain   assets  of   Meadowbrook
                  Neurocare-Kansas  City,  Inc.  and the  assumption  of certain
                  liabilities by the purchaser.

2.                The following pro forma adjustments were made to the Condensed
                  Consolidated  Statements of Income for the twelve months ended
                  June 30, 1996 and the nine months ended March 31, 1997.

         (C)      Elimination of all operating revenue and expenses for the five
                  outpatient rehabilitation clinics in Florida and Georgia.

         (D)      Estimated  reduction  of corporate  office  salaries and wages
                  and operating expenses.

         (E)      Estimated increase in Meadowbrook Rehabilitation Group, Inc.'s
                  interest  income due to payments on promissory  notes received
                  in  connection  with the sale of five  outpatient  clinics and
                  certain other assets in Florida and Georgia.

         (F)      Elimination   of  all  operating   revenue  and  expenses  for
                  Meadowbrook  Neurocare-  Kansas  City,  Inc.  and  Meadowbrook
                  Rehabilitation Group of Georgia, Inc.

         (G)      Estimated  increase  in  revenue  due  to  increased  Medicare
                  reimbursement based on higher overall Medicare utilization.



<PAGE>