| Item 1.03 | Bankruptcy or Receivership. |
On September 19, 2023 (the “Petition Date”), UpHealth Holdings, Inc., a Delaware corporation (“UpHealth Holdings” or the “Debtor”) and a wholly-owned direct subsidiary of UpHealth, Inc. (the “Company”), filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (the “Chapter 11 Case”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). Neither the Company nor any other direct or indirect subsidiary of the Company besides the Debtor has filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code. The Chapter 11 Case is being administered under the caption In re UpHealth Holdings, Inc., Case No. 23-11476. The Debtor will continue to operate its business as “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the U.S. Bankruptcy Code and orders of the Bankruptcy Court. To ensure its ability to continue ordinary course operations during the Chapter 11 Case, the Debtor will file with the Bankruptcy Court motions seeking a variety of customary “first-day” relief.
Cautionary Statements
A significant portion of the operations of the Company are conducted through UpHealth Holdings and UpHealth Holdings’ subsidiaries, and significant portion of the assets of the Company are held by UpHealth Holdings and UpHealth Holdings’ subsidiaries. The Company cautions its equity holders that trading in its securities during the pendency of the Chapter 11 Case may be highly speculative and may pose additional, substantial risks in addition to the various risks that the Company has previously disclosed in its press releases, registration statements filed under the Securities Act of 1933, as amended, and periodic reports and schedules filed under the Securities Exchange Act of 1934, as amended.
| Item 2.04 | Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement. |
The filing of the Chapter 11 Case on the Petition Date as described in Item 1.03 above constitutes an event of default that accelerated the Company’s obligations under the following debt instruments (the “Debt Instruments”):
| | • | | Indenture, dated June 9, 2021, by and between the Company and Wilmington Trust, National Association, a national banking association, in its capacity as trustee thereunder, governing the 6.25% Convertible Senior Notes due 2026 (the “2026 Notes”) which, subject to the event of default triggered by the Chapter 11 Case, mature on June 15, 2026. |
| | • | | Indenture, dated as of August 18, 2022, by and between the Company and Wilmington Trust, National Association, a national banking association, in its capacity as trustee and as collateral agent thereunder, governing the Variable Rate Convertible Senior Secured Notes due 2025 (the “2025 Notes”) which, subject to the event of default triggered by the Chapter 11 Case, mature on December 15, 2025. |
The Debt Instruments provide that upon the filing of the Chapter 11 Case, the principal and interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments against UpHealth Holdings are automatically stayed as a result of the filing of the Chapter 11 Case. As of August 31, 2023, the Company had approximately $57.2 million in aggregate principal amount of 2025 Notes and approximately $115 million in aggregate principal amount of 2026 Notes was issued and outstanding.
On September 19, 2023, the Company issued a press release announcing the filing of the Chapter 11 Case, a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of U.S. federal securities laws. Such forward-looking statements include, but are not limited to, the Ch. 11 bankruptcy process and the operations of the Company and its subsidiaries with UpHealth Holdings under the protection of the Bankruptcy Court, the prospects for an appeal of the summary judgment issued in favor of an opposing litigant, the projected operation and financial performance of the Company, its product offerings and developments and reception of its product by customers, and the Company’s expectations, hopes, beliefs, intentions, plans, prospects or strategies regarding the future revenue and the business plans of the Company’s management team. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence
