Explanatory Note
This Amendment No. 2. (this “Second Amendment”) to the Current Report on Form8-K/A (i) amends the Current Report on Form8-K filed by Fuse Medical, Inc., a Delaware corporation (the “Company”), with the Securities and Exchange Commission (“SEC”) on August 3, 2018 (the “August Filing”), and hereinafter incorporated by reference, and (ii) amends and supersedes, in its entirety, the Amendment No. 1 to the August Filing filed by the Company with the SEC on October 15, 2018 (the “First Amendment”).
This Second Amendment corrects an error in the calculation of the number of shares of the Company’s common stock, par value $0.01, (“Common Stock”) issued in connection with the acquisition of Palm Springs Partners, LLC d/b/a Maxim Surgical (“Maxim”) by the Company (such transaction, the “Maxim Acquisition”). In the August Filing and the First Amendment, the Company reported that it issued an aggregate 4,311,169 shares of its Common Stock to the Sellers (as defined below) on the Closing Date (as defined below), however, due to a calculation error, that number is incorrect. The Company issued 4,210,526 shares of its Common Stock to the Sellers in connection on the Closing Date as explained inItem 2.01 in this Second Amendment.
| Item 2.01. | Completion of Acquisition or Disposition of Assets |
On August 1, 2018, the Company completed the Maxim Acquisition (the “Closing Date”) pursuant to that certain Securities Purchase Agreement, dated July 30, 2018 (the “Purchase Agreement”), by and between the Company, Maxim, Reeg Medical Industries, Inc., a Texas corporation (“RMI”), Mr. Amir David Tahernia, an individual (“Tahernia”, together with RMI, the “Sellers”), and Mr. Amir David Tahernia in his capacity as the representative of the Sellers (the “SellersRepresentative”), pursuant to which the Company agreed to purchase all of the outstanding equity securities of Maxim from the Sellers for aggregate consideration of $3,400,000.00 (the “Purchase Price”). As a portion of the Purchase Price, the Company issued to the Sellers an aggregate 4,210,526 shares of its Common Stock, at an agreed-upon value of $0.76 per share of Common Stock, which was equal to the30-day volume-weighted average price (“VWAP”) of the Common Stock as of three (3) business days prior to the Closing Date. The remaining 13,158 shares of Common Stock constituting the Purchase Price are to be issued at the direction of RMI.
On September 27, 2018, the Company and the Sellers Representative agreed that the payment due to Sellers in accordance with Section 1.4 (Post-Closing Adjustment) of the Purchase Agreement was $81,757.23 (the “Purchase Price Adjustment”). To pay the Purchase Price Adjustment, the Company issued an aggregate of 120,231 restricted shares of its Common Stock to the Sellers on October 4, 2018, at an agreed-upon value of $0.68 per share of Common Stock, which was equal to the30-day VWAP of the Common Stock as of October 1, 2018.
| Item 3.02. | Unregistered Sale of Equity Securities |
The information set forth inItem 2.01 regarding the issuance of shares of Common Stock as payment for the Purchase Price and the Purchase Price Adjustment is incorporated into thisItem 3.02 by reference. The offer and sale of such securities was made to the two purchasers, RMI and Tahernia, in an offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the exemption from the registration requirements provided by Rule 506(b) of Regulation D promulgated under the Securities Act and correlating provisions of state securities laws.
| Item 9.01 | Financial Statements and Exhibits |
| (a) | Financial Statements of Business Acquired. |
Filed asExhibit 99.1 and incorporated in thisItem 9.01 by reference are the historical audited financial statements of Maxim as of December 31, 2016, and December 31, 2017, and the related audited balance sheets, statements of operations, statements of changes in members’ equity, and statements of cash flows for each of the fiscal years ended December 31, 2016, and December 31, 2017, together with the notes thereto and the auditors’ reports thereon, and filed asExhibit 99.2 and incorporated in thisItem 9.01 are the unaudited financial statements of Maxim for the interim period ended June 30, 2018, and the related balance sheets, income statements, and cash flow statements, together with the notes thereto.
