UNITED STATES
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): February 21, 2007
-------------------
INTEGRATED HEALTHCARE HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
-------------------
NEVADA 0-23511 87-0412182
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
1301 NORTH TUSTIN AVENUE
SANTA ANA, CALIFORNIA 92705
(Address of Principal Executive Offices) (Zip Code)
(714) 953-3503
(Registrant's telephone number,
including area code)
(Former Name or Former Address, if Changed Since Last Report)
-------------------
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:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| 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 February 21, 2007, Integrated Healthcare Holdings, Inc. (the "COMPANY")
entered into a letter agreement (the "LETTER OF INTENT") with Medical Capital
Corporation proposing terms and conditions under which Medical Capital
Corporation or its affiliates (collectively, "MEDCAP") would make available to
the Company new credit facilities aggregating up to $140.7 million (the "NEW
CREDIT FACILITIES"). The New Credit Facilities would replace the Company's
existing indebtedness to MedCap, which matures on March 2, 2007. The closing of
the New Credit Facilities would be subject to the negotiation and execution of
definitive transaction documents and certain other customary closing conditions,
and would be expected to be completed by no later than March 8, 2007.
Under the Letter of Intent, the New Credit Facilities would consist of the
following instruments:
o A $45 million Term Loan bearing a fixed interest rate of 9.0% per
year, used to repay amounts owing under the Company's existing $50
million term loan from MedCap.
o A $35 million Non-Revolving Line of Credit bearing a fixed interest
rate of 9.25% per year, used to repay amounts owing under the
Company's existing $30 million line of credit from MedCap, pay the
origination fees on the other credit facilities and for working
capital.
o A $10.7 million Convertible Term Loan bearing a fixed interest rate
of 9.25% per year, used to repay amounts owing under the Company's
existing $10.7 million loan from MedCap.
o A $50 million Revolving Line of Credit Loan bearing a fixed interest
rate of 24.0% per year and an unused commitment fee of 0.50% per
year, used to finance the Company's accounts receivable.
Each of the above instruments would (i) require a 1.5% origination fee due at
funding, (ii) require monthly payments of interest and repayment of principal
upon maturity in three years, (iii) be collateralized by all of the assets of
the Company and its subsidiaries and the real estate underlying the Company's
hospital facilities (which are owned by Pacific Coast Holdings Investments, LLC
and leased to the Company), and (iv) be guaranteed by Ganesha Realty, LLC,
Orange County Physicians Investment Network, LLC, and West Coast Holdings, LLC.
Under the Letter of Intent, the Company would also issue to MedCap (i) a warrant
to purchase 4.95% of the Company's outstanding shares of common stock, and (ii)
a warrant to purchase $10.7 million of the Company's outstanding shares payable
by cancellation of the principal amount owing under the $10.7 million
Convertible Term Loan.
1
The Letter of Intent is furnished as an exhibit to this Report. The preceding
description of the Letter of Intent is summary in nature and does not purport to
be complete. This summary should be read in connection with the exhibit hereto.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
99.1 Letter of Intent, dated February 21, 2007, by and between the
Registrant and Medical Capital Corporation.
2
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: February 23, 2007
INTEGRATED HEALTHCARE HOLDINGS, INC.
By: /s/ Bruce Mogel
---------------------------------
Bruce Mogel
Chief Executive Officer
3