Attached files
file | filename |
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EX-4.1 - EX-4.1 - UNITED AMERICAN HEALTHCARE CORP | k49372exv4w1.htm |
EX-4.2 - EX-4.2 - UNITED AMERICAN HEALTHCARE CORP | k49372exv4w2.htm |
EX-2.2 - EX-2.2 - UNITED AMERICAN HEALTHCARE CORP | k49372exv2w2.htm |
EX-2.3 - EX-2.3 - UNITED AMERICAN HEALTHCARE CORP | k49372exv2w3.htm |
EX-2.1 - EX-2.1 - UNITED AMERICAN HEALTHCARE CORP | k49372exv2w1.htm |
EX-10.3 - EX-10.3 - UNITED AMERICAN HEALTHCARE CORP | k49372exv10w3.htm |
EX-10.2 - EX-10.2 - UNITED AMERICAN HEALTHCARE CORP | k49372exv10w2.htm |
EX-10.1 - EX-10.1 - UNITED AMERICAN HEALTHCARE CORP | k49372exv10w1.htm |
EX-99.1 - EX-99.1 - UNITED AMERICAN HEALTHCARE CORP | k49372exv99w1.htm |
EX-10.4 - EX-10.4 - UNITED AMERICAN HEALTHCARE CORP | k49372exv10w4.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) June 18, 2010
UNITED AMERICAN HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
Michigan | 001-11638 | 38-2526913 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
300 River Place, Suite 4950, Detroit, Michigan | 48207 | |
(Address of principal executive offices) | (Zip code) |
Registrants telephone number, including area code (313) 393-4571
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
þ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On June 18, 2010, United American Healthcare Corporation (UAHC) acquired Pulse Systems, LLC
(Pulse Systems) for aggregate consideration of $15,608,381 (the Acquisition), which is net of cash
of $435,327 and subject to
adjustments described below, consisting of (A) $6,750,000 (consisting of cash, a promissory note
and, subject to shareholder approval, UAHC common stock), in exchange for all of the outstanding
common units and warrants to purchase common units of Pulse Systems, (B) $3,990,000 (consisting of
$1,750,000 at closing, with the remaining amounts to be paid out over two years), to redeem all of
the outstanding preferred units of Pulse Systems and (C) $5,303,708 of assumed debt, comprised of a term loan and capital leases. A description of the Acquisition and related
agreements is set forth below.
Securities Purchase Agreement
In connection with the Acquisition, UAHC entered into a Securities Purchase Agreement, dated June
18, 2010 (the Securities Purchase Agreement), with Chicago Venture Partners, L.P., Pulse Systems
Corporation, Demian Backs, Vince Barletta, Rodger Bell and Merrill Weber (collectively, the
Sellers), as well as John M. Fife, as the Seller Representative (as defined therein), Pulse
Sellers, LLC, Pulse Holdings, LLC, and Pulse Systems, under which UAHC acquired all of the common
units and certain warrants to purchase common units of Pulse Systems for an aggregate purchase
price of $5,918,797. Chicago Venture Partners, which owned 59% of the common units of Pulse
Systems prior to the transaction, is controlled by John M. Fife, who is the sole member of St. George
Investments, LLC (St. George). John M. Fife also served as Chairman of Pulse Systems prior to the transation. St. George is party to that certain Voting and Standstill
Agreement (the Standstill Agreement) with UAHC, as disclosed in UAHCs Current Report on Form 8-K
filed on March 22, 2010. The Standstill Agreement was amended on June 7, 2010 and a waiver was
granted on June 18, 2010; see Amendments and Waiver to Voting and Standstill Agreement below.
The purchase price consists of $2,568,797 in cash paid at closing, a promissory note in the
principal amount of $1,750,000 made by UAHC in favor of the Sellers with a maturity date of January
2, 2011 (the Seller Note), and, subject to shareholder approval, the issuance of 1,608,040 shares
of UAHC common stock (valued at $1,600,000). If shareholder approval of the share issuance is not
obtained by December 31, 2010, UAHC will, in lieu of the issuance of such shares, return to the
Sellers 1,313,945 common units of Pulse Systems, representing approximately 26% of the common units
outstanding as of June 18, 2010. The promissory note is non-interest bearing and secured by a
pledge of the common units of Pulse Systems acquired by UAHC, which pledge remains subordinate to
the pledge of such units under the Loan Agreement described below. The purchase price is subject to
standard post-closing adjustments based on targeted cash, working capital and closing debt numbers.
The Securities Purchase Agreement contains standard representations and warranties and indemnities
from the Sellers. To secure any downward post-closing adjustment to the purchase price and any
indemnity claims, $500,000 of the purchase price (cash and securities) will be placed into an
escrow account. At closing, $100,000 in cash was placed in escrow. If shareholder approval of the
UAHC share issuance is obtained, then 402,010 shares will be placed into escrow. If common units
of Pulse Systems are returned to the Sellers upon failure to receive shareholder approval, 366,535
common units will be placed in escrow.
Warrant Purchase Agreement
In connection with the Acquisition, UAHC also entered into a Warrant Purchase Agreement, dated June
18, 2010 (the Warrant Purchase Agreement), with Convergent Capital Partners I, L.P., Main Street
Equity Interests, Inc., Medallion Capital, Inc. and Pacific Mezzanine Fund, L.P., pursuant to which
UAHC acquired the remaining warrants to purchase common units of Pulse Systems for an aggregate
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purchase price of $831,203 paid in cash at closing. The Warrant Purchase Agreement contains
limited representations and warranties and indemnities from the warrant sellers.
Loan and Security Agreement and Pledge Agreement
In connection with the Acquisition, UAHC paid $750,000 to reduce the outstanding amount of Pulse
Systems debt under the Loan Agreement, defined below. Pulse Systems remains party to the Loan and
Security Agreement, as amended (the Loan Agreement), with Fifth Third Bank, which currently
relates to a revolving loan not to exceed $1,000,000, of which no amounts were outstanding as of the closing, and a
$5,000,000 term loan, with a remaining balance of $4,250,000. The revolving
loan matures June 30, 2011 and bears interest at prime plus 4% or, at the option of Pulse Systems,
Adjusted LIBOR (the greater of LIBOR or 3%) plus 4%. The term loan matures on March 31, 2014,
bears interest at Adjusted LIBOR plus 6.5% and requires quarterly principal payments of $265,625.
The loans are secured by a lien on all of the assets of Pulse Systems.
The Loan Agreement contains financial covenants. In connection with the Acquisition and the
execution of the Second Amendment to the Loan and Security Agreement (the Amendment), the lender
waived the existing defaults under the Loan Agreement arising from Pulse Systems failure to
satisfy (a) the Adjusted EBITDA (as defined therein) covenant as of December 31, 2009 and March 31,
2010, (b) the Funded Debt to Adjusted EBITDA covenant (as defined therein) as of March 31, 2010,
(c) the Fixed Charge Coverage Ratio (as defined therein) as of December 31, 2009 and March 31,
2010, and (d) to timely deliver audited financial statements for the fiscal year ended December 31,
2009. In addition, the Amendment modifies the definition of Adjusted EBITDA, to among other
things, add $750,000 to the calculation to reflect the $750,000 contribution to capital made by
UAHC to Pulse Systems at closing which was applied to reduce the amount of Pulse Systems debt.
In addition, UAHC has pledged its membership interests in Pulse Systems as additional security for
the loans, as set forth in the Membership Interest Pledge Agreement (the Pledge Agreement). The
Pledge Agreement restricts the ability of UAHC to incur additional indebtedness, other than the
Seller Note and up to $1,000,000 of unsecured working capital financing. The Pledge Agreement also
generally restricts the payments of dividends or distributions on, and redemptions of, UAHC common
stock, except as permitted under the Standstill Agreement, as amended.
Redemption Agreement
In connection with the Acquisition, Pulse Systems also entered into a Redemption Agreement, dated
June 18, 2010 (the Redemption Agreement), with Pulse Systems Corporation, the holder of all of
the outstanding preferred units in Pulse Systems. The aggregate redemption price is $3,990,000 for
the preferred units, including the accrued but unpaid return on such units, which reflects a
$826,000 reduction from the actual outstanding amount as of the date of the agreement. In
addition, the 14% dividend rate on the preferred units is eliminated, subject to reinstatement if
there is a default as explained in the next sentence. If Pulse Systems fails to pay the entire
$3,990,000 redemption price as required by the terms of the redemption agreement, the $826,000
discount is eliminated and the preferred units will be entitled to a 14% per annum cumulative (but
not compounded) return, consistent with the current terms of the preferred stock. Pulse Systems
Corporation has agreed to the redemption of its preferred units over a two-year period, commencing
with a cash payment made at closing of $1,750,000. Thereafter, Pulse Systems will redeem $40,000
of the preferred units on August 31, 2010 and each month for the next 21 months, with a final
payment of $1,360,000 in June 2012. The obligations of Pulse Systems under the redemption
agreement are subordinate to its obligations under the Loan Agreement and Pledge Agreement. In
addition, the redemption payments can be made only if the required funds are provided by UAHC to
Pulse Systems.
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Amendments and Waiver to Voting and Standstill Agreement
On June 4, 2010, with the consent of the Company as required by the Standstill Agreement, St.
George sold 1,603,647 shares to The Dove Foundation (the Trust), a charitable trust organized
under the laws of Illinois and intending to qualify as a 501(c)(3) organization under the Internal
Revenue Code. The Trust purchased the shares through the issuance of an unsecured promissory note
in the amount of $1,555,537.59. On and effective June 7, 2010, as required by the Standstill
Agreement, the Trust entered into an agreement to join the Standstill Agreement, as amended by the
Company and St. George (as described below), and to be bound by all of the terms and conditions,
benefits and restrictions, as applicable to St. George, other than the provisions relating to the
capital call described therein. In addition, on and effective June 7, 2010, the Company and St.
George agreed to amend the Standstill Agreement to, among other things, permit the Company to
replace the cash reserve supporting the Companys put obligation under the Standstill Agreement
with other collateral reasonably acceptable to St. George.
In connection with the Acquisition, St. George, The Dove Foundation and UAHC executed a waiver
which provides that the Acquisition would not constitute a Triggering Event within the meaning of
the Standstill Agreement. If a Triggering Event occurs, UAHCs right to call to purchase the
shares owned by The Dove Foundation and St. George terminates. In addition, the occurrence of a
Triggering Event modifies the calculation of the price for issuing preferred shares in the event
the Company exercises its option to have St. George invest an additional $600,000 by purchasing
preferred shares.
The foregoing descriptions of the Securities Purchase Agreement, Warrant Purchase Agreement, Loan
Agreement, Pledge Agreement, Redemption Agreement and the amendment, joinder and waiver of the
Standstill Agreement, as amended (collectively, the Transaction Agreements) and the transactions
consummated or contemplated thereby do not purport to be complete and are qualified in their
entirety by the terms and conditions of such agreements, which are filed as Exhibits 2.1, 2.2, 2.3,
4.1, 4.2, 10.2, 10.3 and 10.4 to this Current Report on Form 8-K.
The Transaction Agreements have been included as exhibits to this Current Report on Form 8-K to
provide you with information regarding their terms. The Transaction Agreements contain
representations and warranties that the parties thereto made to the other parties thereto as of
specific dates. The assertions embodied in the representations and warranties in the Transaction
Agreements were made solely for purposes of the contracts among the respective parties, and each
may be subject to important qualifications and limitations agreed to by the parties in connection
with negotiating the terms thereof. Moreover, some of those representations and warranties may not
be accurate or complete as of any specified date, may be subject to a contractual standard of
materiality different from those generally applicable to stockholders or may have been used for the
purpose of allocating risk among the parties rather than establishing matters as facts.
Items 2.01 Completion of Acquisition or Disposition of Assets.
The information regarding the Acquisition is set forth in Item 1.01 and is incorporated herein by
reference.
Items 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information regarding the Loan Agreement, Pledge Agreement and Redemption Agreement is set
forth in Item 1.01 and is incorporated herein by reference.
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Item 3.02 Unregistered Sale of Equity Securities.
The information regarding the Securities Purchase Agreement is set forth in Item 1.01 and is
incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Subsequent to the Acquisition, Herbert J. Bellucci, 60, will continue as the President and Chief
Executive Officer of Pulse Systems, LLC a role he has held since August 2007. Mr. Bellucci has
more than 25 years experience in the medical device industry. From August 2005 to July 2007, Mr.
Bellucci served as Vice President of Manufacturing and then Vice President of Manufacturing and
International of Alphatec Holdings (Nasdaq: ATEC) and its subsidiary Alphatec Spine, Inc., a
medical device company that designs, develops, manufactures and markets products for the surgical
treatment of spine disorders. From May 2003 to April 2005, he served as Senior Vice President of
Operations for Digirad Corporation (Nasdaq: DRAD), a publicly-held developer and manufacturer of
solid-state gamma cameras for nuclear cardiology and general nuclear medicine applications. Mr.
Bellucci holds a bachelor of science degree in engineering from Brown University and an MBA from
Stanford Graduate School of Business.
Bellucci is party to an employment agreement with Pulse Systems, dated July 24, 2007 (the
Employment Agreement), which is effective until terminated in accordance with its terms. Mr.
Bellucci is entitled to an annual base salary of $225,000, an annual performance bonus and standard
benefits available to all employees. The agreement may be terminated by Pulse Systems or Mr.
Bellucci at any time, with or without cause and with or without notice. If Pulse Systems
terminates Mr. Belluccis employment other than for disability or cause (defined therein), or if
Mr. Bellucci terminates his employment for good reason (defined therein), and if he executes a
general release, he is entitled to severance constituting six months of his base salary, subject to
set off.
The foregoing summary is qualified in its entirety by the Employment Agreement, a copy of which is
filed herewith as Exhibit 10.1 and which is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On June 18, 2010, UAHC issued a press release announcing the Acquisition and related transactions,
a copy of which is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
Additional Information
This Current Report on Form 8-K addresses the transaction between UAHC and Pulse Systems, which
includes a potential issuance of 1,608,040 shares of UAHC common stock having a value of $1,600,000
subject to the approval of the shareholders of UAHC. The share issuance will be voted upon by the
shareholders of UAHC at a special meeting of the shareholders, and not at the upcoming annual
meeting of shareholders to be held on June 29, 2010. The date of the special meeting of
shareholders and record date for shareholders eligible to vote at the meeting will be set and
announced by UAHC at a later date. In connection with the special meeting of shareholders, the
Company intends to file with the Securities and Exchange Commission (SEC) a proxy statement and
other relevant documents to be mailed to shareholders in connection with the potential share
issuance. SHAREHOLDERS ARE STRONGLY ADVISED TO READ THE PROXY STATEMENT ANY OTHER RELEVANT
DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders
will be able to obtain these materials (when they are available) and other documents filed by UAHC
at the SECs website at http://www.sec.gov. These materials (when available) may also be
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obtained free of charge by directing such request to Investor Relations, United American Healthcare
Corporation, 300 River Place Suite 4950, Detroit, Michigan, 48207, telephone: (313) 393-4571, or on
UAHCs website at www.uahc.com.
UAHC, its directors, executive officers and certain other members of its management and employees
and other third parties, may be deemed to be participants in the solicitation of proxies from
UAHCs shareholders in connection with the special meeting of shareholders. Information concerning
all of UAHCs participants in the solicitation will be included in the proxy statement relating to
the special meeting of shareholders when it becomes available.
Item 9.01 Financial Statements and Exhibits.
(a)
|
Financial Statements of Businesses Acquired | |
The financial statements with respect to the Acquisition reported in Item 1.01 will be filed by an amendment to this report within 71 calendar days after the date this report was required to be filed. | ||
(b)
|
Pro Forma Financial Information | |
The pro form financial statements with respect to the Acquisition reported in Item 1.01 will be filed by an amendment to this report within 71 calendar days after the date this report was required to be filed. | ||
(d)
|
Exhibits. |
Exhibit No. | Description | |
2.1
|
Securities Purchase Agreement, dated June 18, 2010, by and among United American Healthcare Corporation, John M. Fife, as the Seller Representative (as defined therein), Pulse Sellers, LLC, Pulse Holdings, LLC, Chicago Venture Partners, L.P., Pulse Systems Corporation, Demian Backs, Vince Barletta, Rodger Bell and Merrill Weber. | |
2.2
|
Warrant Purchase Agreement dated June 18, 2010 by and among United American Healthcare Corporation, Convergent Capital Partners I, L.P., Main Street Equity Interests, Inc., Medallion Capital, Inc. and Pacific Mezzanine Fund, L.P. | |
2.3
|
Redemption Agreement, dated June 18, 2010, by and between Pulse Systems, LLC and Pulse Systems Corporation. | |
4.1
|
Loan and Security Agreement, dated March 31, 2009, as amended by the First Amendment to the Loan and Security, dated September 23, 2009, and by the Second Amendment to the Loan and Security Agreement, dated June 18, 2010, each by and between Fifth Third Bank and Pulse Systems, LLC. | |
4.2
|
Membership Interest Pledge Agreement, dated June 18, 2010, delivered by United American Healthcare Corporation to Fifth Third Bank. | |
10.1
|
Employment Agreement, dated July 24, 2007, by and between Pulse Systems, LLC and Herbert J. Bellucci. | |
10.2
|
Amendment to Voting and Standstill Agreement, dated June 7, 2010, by and between |
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Exhibit No. | Description | |
United American Healthcare Corporation and St. George Investments, LLC. | ||
10.3
|
Agreement to Join the Voting and Standstill Agreement, dated June 7, 2010, by and among The Dove Foundation, United American Healthcare Corporation and St. George Investments, LLC. | |
10.4
|
Acknowledgment and Waiver of Certain Provisions of the Voting and Standstill Agreement, dated June 18, 2010, by and among United American Healthcare Corporation, St. George Investments, LLC and The Dove Foundation. | |
99.1
|
Press Release, dated June 18, 2010, titled United American Healthcare Corporation Announces Acquisition of Pulse Systems, LLC. |
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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.
Date: June 24, 2010 | UNITED AMERICAN HEALTHCARE CORPORATION |
|||
By: | /s/ William L. Dennis | |||
Name: | William L. Dennis | |||
Title: | Chief Financial Officer and Treasurer |
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Exhibit Index
Exhibit No. | Description | |
2.1
|
Securities Purchase Agreement, dated June 18, 2010, by and among United American Healthcare Corporation, John M. Fife, as the Seller Representative (as defined therein), Pulse Sellers, LLC, Pulse Holdings, LLC, Chicago Venture Partners, L.P., Pulse Systems Corporation, Demian Backs, Vince Barletta, Rodger Bell and Merrill Weber. | |
2.2
|
Warrant Purchase Agreement dated June 18, 2010 by and among United American Healthcare Corporation, Convergent Capital Partners I, L.P., Main Street Equity Interests, Inc., Medallion Capital, Inc. and Pacific Mezzanine Fund, L.P. | |
2.3
|
Redemption Agreement, dated June 18, 2010, by and between Pulse Systems, LLC and Pulse Systems Corporation. | |
4.1
|
Loan and Security Agreement, dated March 31, 2009, as amended by the First Amendment to the Loan and Security, dated September 23, 2009, and by the Second Amendment to the Loan and Security Agreement, dated June 18, 2010, each by and between Fifth Third Bank and Pulse Systems, LLC. | |
4.2
|
Membership Interest Pledge Agreement, dated June 18, 2010, delivered by United American Healthcare Corporation to Fifth Third Bank. | |
10.1
|
Employment Agreement, dated July 24, 2007, by and between Pulse Systems, LLC and Herbert J. Bellucci. | |
10.2
|
Amendment to Voting and Standstill Agreement, dated June 7, 2010, by and between United American Healthcare Corporation and St. George Investments, LLC. | |
10.3
|
Agreement to Join the Voting and Standstill Agreement, dated June 7, 2010, by and among The Dove Foundation, United American Healthcare Corporation and St. George Investments, LLC. | |
10.4
|
Acknowledgment and Waiver of Certain Provisions of the Voting and Standstill Agreement, dated June 18, 2010, by and among United American Healthcare Corporation, St. George Investments, LLC and The Dove Foundation. | |
99.1
|
Press Release, dated June 18, 2010, titled United American Healthcare Corporation Announces Acquisition of Pulse Systems, LLC. |
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