UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): June 13, 2007
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INTEGRATED HEALTHCARE HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
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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)
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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 June 18, 2007, Integrated Healthcare Holdings, Inc. (the "Company") entered
into an Agreement to Forbear (the "Forbearance Agreement") with Medical Provider
Financial Corporation II and Medical Provider Financial Corporation III (the
"Lenders"). Under the Forbearance Agreement, the Lenders agreed to forbear from
declaring a default, filing a judicial foreclosure action and charging default
interest on the $80 million Credit Agreement, dated as of March 3, 2005, with
the Company (including loans drawn on this Credit Agreement) and the $10.7
million Credit Agreement, dated as of December 12, 2005, with the Company
(including loans drawn on this Credit Agreement) (collectively, the
"Indebtedness"), both of which have matured. Under the Forbearance Agreement,
the Lenders will forbear from exercising certain of their rights and remedies
under the Indebtedness for a period of 90 days from the date of the Forbearance
Agreement. Also under the Forbearance Agreement, the Company and the other
borrowers and guarantors under the Credit Agreements granted certain releases
and waivers in favor of the Lenders and agreed not to sue the Lenders.
Also on June 18, 2007, the Company entered into Amendment No.1 to the
Forbearance Agreement with the Lenders (the "Amendment"). Under the Amendment,
effective July 1, 2007 the Lenders will waive their right to declare that an
Event of Default has occurred under Section 8.1(w) of the $80 Million Credit
Agreement and under Section 10.1(o) of the $10.7 Million Credit Agreement. These
sections provide for an Event of Default under the Credit Agreements if Larry
Anderson or Bruce Mogel are no longer employees of the Company and replacements
acceptable to the Lenders are not employed within 30 days. The Lenders also
agreed in the Amendment that if the Company appoints, nominates and/or elects a
person to become a member of its Board of Directors and such person is an
"independent director" (as defined in the Amendment), the Lenders will each
waive their right to declare that an Event of Default has occurred under the
Credit Agreements due to the occurrence of a Change of Control. Finally, the
Lenders agreed that if the Company elects to engage the services of one of the
outside consulting firms named in the Amendment to take over management and
control of the Company's hospital facilities, a Change of Control will not be
deemed to have occurred under the Credit Agreements, subject to certain
requirements set forth in the Amendment.
Should the Company be unable to obtain financing from another lender prior to
the expiration of the forbearance period under the Forbearance Agreement and the
Lenders exercise their full remedies under the current Credit Agreements, the
Company believes that it will be unable to continue as a going concern.
The Forbearance Agreement and Amendment are furnished as exhibits to this
Report. The preceding descriptions of the Forbearance Agreement and Amendment
are summary in nature and do not purport to be complete. This summary should be
read in conjunction with the exhibits attached hereto.
ITEM 1.02 Termination of a Material Definitive Agreement.
On June 13, 2007, the Company received a Notice of Default from Medical Provider
Financial Corporation II on the $80 million Credit Agreement dated as of March
3, 2005. The notice states that the total amount due and payable as of June 1,
2007 is $73,213,575.06. The Lender also stated that the line of credit was
suspended as to any additional advances and any additional advances will be at
the Lender's sole discretion.
Also on June 13, 2007, the Company received a Notice of Default from Medical
Provider Financial Corporation III on the $10.7 million Credit Agreement dated
as of December 12, 2005. The notice states that the total amount due and payable
as of June 1, 2007 is $10,809,052.05.
Also on June 13, 2007, the Company was notified that the letter dated February
21, 2007, titled Expression of Interest in Providing Credit Facilities, executed
by Medical Capital Corporation and the Company in connection with proposed
refinancing has been terminated due to the failure of the proposed Borrowers,
Credit Parties and Guarantors to timely execute and deliver loan documents to
complete the transaction.
ITEM 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement
See the discussion under Items 1.01 and 1.02 above, which are incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
99.1 Agreement to Forbear executed June 18, 2007
99.2 Amendment No. 1 to Forbearance Agreement executed June 18, 2007
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: June 19, 2007
INTEGRATED HEALTHCARE HOLDINGS, INC.
By: /s/ Steve Blake
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Steve Blake
Chief Financial Officer