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SCHEDULE 14C INFORMATION STATEMENT
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[X] Preliminary Information Statement
[_] Confidential, for use of the Commission only (as permitted by Rule
14c-5(d)(21))
[_] Definitive Information Statement
Integrated Healthcare Holdings, Inc.
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(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing is calculated and state how it was determined.): ________
4) Proposed maximum aggregate value of transaction: ___________
5) Total Fee Paid: _________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: _________
2) Form, Schedule or Registration Statement No.: _________
3) Filing Party: _________
4) Dated Filed: _________
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INTEGRATED HEALTHCARE HOLDINGS, INC.
1301 NORTH TUSTIN AVENUE
SANTA ANA, CALIFORNIA 92705
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NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT
-----------------------------------
March _____, 2009
We are writing to advise you that Integrated Healthcare Holdings, Inc.
(the "Company") intends to amend and restate its Articles of Incorporation in
the form attached as Appendix A (the "Amended Articles") to increase the
Company's authorized shares of Common Stock, $.001 par value per share, from
400,000,000 to 500,000,000 shares.
This action was approved on January 20, 2009 by unanimous consent of
our Board of Directors. In addition, stockholders holding a majority of our
outstanding shares of Common Stock approved this action by written consent in
lieu of a meeting on or about February 27, 2009, in accordance with the relevant
sections of the Nevada Revised Statutes.
This action will not be effective until we file the Amended Articles
with the Nevada Secretary of State. We intend to file the Amended Articles 20
days after this Information Statement is first mailed to our stockholders.
Our primary purpose in increasing the number of authorized shares of
Common Stock is to provide sufficient authorized shares to fulfill our
obligations to issue Common Stock under equity instruments issued by the
Company. We also wish to better position the Company to take advantage of
possible future financing opportunities and other corporate purposes, as the
Board of Directors determines in its discretion to be in the best interests of
the Company.
No action is required by you. The accompanying Information Statement is
furnished only to inform our stockholders of the action described above before
it takes effect in accordance with Rule 14c-2 promulgated under the Securities
Act of 1934. This Information Statement is being mailed to you on or about March
_____, 2009.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
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Kenneth K. Westbrook
Chief Executive Officer
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INTEGRATED HEALTHCARE HOLDINGS, INC.
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INFORMATION STATEMENT
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INFORMATION CONCERNING ACTION BY WRITTEN CONSENT
This Information Statement is being mailed or furnished to the
stockholders of Integrated Healthcare Holdings, Inc. (the "Company") in
connection with the approval by the Company's Board of Directors on January 20,
2009 of the amendment and restatement of the Articles of Incorporation of the
Company in the form attached as Appendix A (the "Amended Articles"), and the
approval on or about February 27, 2009 of the Amended Articles by written
consent of the holders of a majority of the outstanding shares of Common Stock
of the Company. Accordingly, all necessary corporate approvals in connection
with the approval of the Amended Articles have been obtained and this
Information Statement is furnished solely for the purpose of informing the
stockholders of the Company, in the manner required under the Securities
Exchange Act of 1934, as amended, of these corporate actions before they take
effect.
This Information Statement is first being mailed or furnished to the
stockholders of record of the Company on or about February 27, 2009. The
Information Statement is being delivered only to inform you of the corporate
action described herein before it takes effect in accordance with Rule 14c-2
promulgated under the Securities Exchange Act of 1934, as amended.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The Nevada Revised Statutes require that, in order for us to amend our
Articles of Incorporation, such amendment must be approved by our Board of
Directors and approved by a majority or the outstanding shares entitled to vote
thereon. The Nevada Revised Statutes also provide than any action which may be
taken at a meeting of stockholders may be taken without a meeting and without
prior notice, if a consent in writing, setting forth the action so taken, shall
be signed by the holders of a majority of the outstanding shares entitled to
vote.
As of February 27, 2009, there were 195,307,262 shares of our Common
Stock outstanding. Stockholders holding a total of 107,749,832 outstanding
shares of Common Stock, constituting a majority of our outstanding shares
entitled to vote, approved the Amended Articles. There will not be a meeting of
stockholders and none is required under Nevada law because this action has been
approved by written consent of the holders of a majority of outstanding shares.
We have asked brokers and other custodians, nominees and fiduciaries to
forward this Information Statement to the beneficial owners of the Common Stock
held of record by such persons and we will reimburse such persons for
out-of-pocket expenses incurred in forwarding such material.
INTERESTS IN CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer or associate of any director or executive
officer has any substantial interest, direct or indirect, by security holdings
or otherwise, in the increase in number of shares of authorized Common Stock
which is not shared by all other stockholders of the Company.
EFFECTIVE DATE OF AMENDMENT
The amendment and restatement of our Articles of Incorporation will
become effective upon the filing, with the Nevada Secretary of State, of the
Amended Articles, a copy of which is attached hereto as Appendix A. We intend to
file the Amended Articles 20 days after this Information Statement is first
mailed to stockholders.
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INFORMATION STATEMENT COSTS
The cost of delivering this Information Statement, including the
preparation, assembly and mailing of the Information Statement, as well as the
cost of forwarding this material to the beneficial owners of our capital stock
will be borne by us. We may reimburse brokerage firms and others for expenses in
forwarding Information Statement materials to the beneficial owners of our
capital stock.
DISSENTERS' RIGHTS
The Nevada Revised Statutes do not provide for dissenters' right of
appraisal in connection with an increase in the authorized shares of Common
Stock.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information known to us with respect to
the beneficial ownership of our Common Stock as of February 27, 2009 by:
o each stockholder known to us to own beneficially more than 5%
of our Common Stock;
o each of our directors and executive officers; and
o all of our current directors and executive officers as a
group.
Except as otherwise noted below, the address of each person or entity
listed on the table is 1301 North Tustin Avenue, Santa Ana, California 92705.
The address of Dr. Kali Chaudhuri and William E. Thomas is 6800 Indiana Avenue,
Suite 130, Riverside, CA 92506.
BENEFICIAL PERCENTAGE
NAME OWNERSHIP (1) OF TOTAL (2)
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DIRECTORS AND EXECUTIVE OFFICERS
Ajay G. Meka, M.D. 233,333 (3) *
Maurice J. DeWald 350,000 (4) *
Hon. C. Robert Jameson 116,666 (5) *
Michael Metzler 116,666 (6) *
J. Fernando Niebla 350,000 (7) *
William E. Thomas 9,865,164 (8) 5.05%
Kenneth K. Westbrook 833,333 (9) *
Steven R. Blake 175,000 (10) *
Daniel J. Brothman 1,000,000 (11) *
Jeremiah R. Kanaly 100,000 (12) *
All current directors and executive
officers as a group (10 persons) 13,140,162 6.73%
PRINCIPAL STOCKHOLDERS (OTHER THAN THOSE NAMED ABOVE)
Orange County Physicians Investment
Network, LLC 59,098,430 30.26%
Kali P. Chaudhuri, M.D. 152,258,316 (13) 61.01%
Healthcare Financial Management
& Acquisitions, Inc. 145,883,814 (14) 42.76%
* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of Common Stock subject to options,
warrants and convertible instruments that are exercisable or convertible
currently or within 60 days of February 27, 2009 are deemed outstanding for
computing the percentage of the person holding such option, warrant or
convertible instrument, but are not deemed outstanding for computing the
percentage of any other person. Except as reflected in the footnotes or pursuant
to applicable community property laws, the persons named in the table have sole
voting and investment power with respect to all shares of Common Stock
beneficially owned.
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(2) Percentages are based on 195,307,262 shares of Common Stock outstanding as
of February 27, 2009, which does not include up to 15,866,271 shares of Common
Stock which may be issued under the Company's 2006 Stock Incentive Plan.
(3) Consists of a portion of a stock option award approved by the Board of
Directors which is exercisable within 60 days of February 27, 2009, pursuant to
the Company's 2006 Stock Incentive Plan. Dr. Meka is a member of Orange County
Physicians Investment Network, LLC ("OC-PIN") and disclaims beneficial ownership
of shares held by OC-PIN except to the extent of his pecuniary interest therein.
(4) Consists of a portion of a stock option award approved by the Board of
Directors which is exercisable within 60 days of February 27, 2009 pursuant to
the Company's 2006 Stock Incentive Plan.
(5) Consists of a portion of a stock option award approved by the Board of
Directors which is exercisable within 60 days of February 27, 2009 pursuant to
the Company's 2006 Stock Incentive Plan.
(6) Consists of a portion of a stock option award approved by the Board of
Directors which is exercisable within 60 days of February 27, 2009 pursuant to
the Company's 2006 Stock Incentive Plan.
(7) Consists of a portion of a stock option award approved by the Board of
Directors which is exercisable within 60 days of February 27, 2009 pursuant to
the Company's 2006 Stock Incentive Plan.
(8) Consists of 9,748,498 issued and outstanding shares and a portion of a stock
option award approved by the Board of Directors which is exercisable within 60
days of February 27, 2009 pursuant to the Company's 2006 Stock Incentive Plan.
(9) Consists of a portion of a stock option award approved by the Board of
Directors which is exercisable within 60 days of February 27, 2009 pursuant to
the Company's 2006 Stock Incentive Plan.
(10) Consists of a portion of a stock option award approved by the Board of
Directors which is exercisable within 60 days of February 27, 2009 pursuant to
the Company's 2006 Stock Incentive Plan.
(11) Consists of a portion of a stock option award approved by the Board of
Directors which is exercisable within 60 days of February 27, 2009 pursuant to
the Company's 2006 Stock Incentive Plan.
(12) Consists of a portion of a stock option award approved by the Board of
Directors which is exercisable within 60 days of February 27, 2009 pursuant to
the Company's 2006 Stock Incentive Plan.
(13) Consists of 98,001,334 issued and outstanding shares plus 54,256,982 shares
which may be acquired upon exercise of a warrant which expires in January 2010.
(14) Healthcare Financial Management & Acquisitions, Inc., which is affiliated
with the Company's principal lender, Medical Capital Corporation, holds two
warrants to acquire 31.09% and 4.95% of the outstanding shares of Common Stock
of the Company.
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PROPOSAL TO AMEND AND RESTATE THE ARTICLES OF INCORPORATION
On January 20, 2009, our Board of Directors approved the amendment and
restatement of the Articles of Incorporation of the Company in the form attached
as Appendix A (the "Amended Articles") to increase the Company's authorized
shares of Common Stock from 400,000,000 to 500,000,000 shares.
On or about February 27, 2009, the Amended Articles were approved by
written consent of the holders of a majority of the outstanding shares of Common
Stock of the Company. Accordingly, all necessary corporate approvals in
connection with the approval of the Amended Articles have been obtained.
Our Board of Directors approved the increase in authorized
shares of Common Stock to provide sufficient authorized shares to fulfill our
obligations to issue shares under equity instruments previously issued by the
Company to better position the Company to take advantage of possible future
financing opportunities and other corporate purposes, as the Board of Directors
determines in its discretion to be in the best interests of the Company.
The Company currently has outstanding warrants and convertible notes
which are exercisable or convertible for up to an aggregate of 204,102,757
shares of Common Stock. In addition, the Company has outstanding stock options
to acquire an aggregate of 9,335,000 shares, and an aggregate of 7,031,271
shares remain eligible for issuance under the Company's 2006 Stock Incentive
Plan (subject to annual increases as provided in the Plan). Therefore it is
necessary to increase our authorized shares to be able to fulfill our
commitments to issue all of these additional shares.
The following table summarizes our outstanding instruments and equity
plans under which we may be obligated to issue shares of Common Stock.
Common Stock Equivalents**
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Outstanding shares of common stock 195,307,262
Outstanding warrants:
Healthcare Financial Management & Acquisitions, Inc. (HFMA) 145,883,814
Kali P. Chaudhuri, M.D. 54,256,982
Outstanding options:
Stock options - employees and directors, granted or approved 9,335,000
Stock options - ungranted 7,031,271
Additional warrants issuable to HFMA if ungranted options are granted 3,961,961
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Common stock equivalents 415,776,290
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**Assumes all remaining shares eligible under the Company's stock option plan
are issued
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Except as set forth in the above table, the Company has no plans,
commitments, arrangements, understandings or agreements, either written or oral,
regarding the issuance of Common Stock following the proposed increase of
authorized shares to 500,000,000 shares described in this Information Statement.
In addition, the Company wishes to be able to take advantage of
possible future financing opportunities and other corporate purposes, as the
Board of Directors determines in its discretion to be in the best interests of
the Company. The additional shares could be used, among other things, for stock
dividends, acquisitions of other companies, public or private financings to
raise additional capital and stock-based employee benefit plans.
Under the Amended Articles, the newly authorized shares would be
unreserved and available for issuance by the Company without further stockholder
action, except as required by current agreements executed by the Company and
applicable laws and regulations. All of the additional shares resulting from the
proposed increase in our authorized shares of Common Stock would be of the same
class if and when they are issued, and holders would have the same rights and
privileges as holders of shares of Common Stock presently issued and
outstanding, including the same dividend, voting and liquidation rights.
The holders of our Common Stock generally do not have preemptive rights
to subscribe to additional securities that may be issued by the Company, which
means that current stockholders do not have a prior right to purchase any
additional shares in connection with a new issuance of capital stock of the
Company in order to maintain their proportionate ownership of our Common Stock.
Accordingly, if our Board of Directors elects to issue additional shares of
Common Stock, such issuance could have a dilutive effect on the earnings per
share, voting power and equity ownership of current stockholders.
The proposed increase in authorized number of shares of Common Stock
could have an anti-takeover effect. The availability for issuance of additional
shares of Common Stock could discourage, or make more difficult, efforts to
obtain control of the Company because such shares could be issued to dilute the
voting power of a person seeking control. For example, it may be possible for
our Board of Directors to delay or impede a merger, tender offer, or proxy
contest that it determines is not in the best interests of the Company and
stockholders by causing such additional authorized shares to be issued to
holders who might side with the board in opposing such a takeover or change in
control. By potentially discouraging unsolicited takeover attempts, the proposed
amendment may limit the opportunity for our stockholders to dispose of their
shares at the higher price generally available in takeover attempts or under a
merger proposal and may also have the effect of permitting our current
management, including the current Board of Directors, to retain its position and
resist changes that stockholders may wish to make if they are dissatisfied with
the conduct of our business.
ADDITIONAL INFORMATION
We are subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith file reports,
proxy statements and other information including annual and quarterly reports on
Form 10-K and Form 10-Q with the Securities and Exchange Commission. Reports and
other information filed by us can be inspected and copied at the public
reference facilities maintained at the Securities and Exchange Commission at
Room 1580, 100 F Street, NE, Washington, DC 20549. Copies of such material can
be obtained upon written request addressed to the Securities and Exchange
Commission, Public Reference Section, at Room 1580, 100 F Street, NE,
Washington, DC 20549, at prescribed rates. The Securities and Exchange
Commission also maintains a web site on the Internet (http://www.sec.gov) where
reports, proxy and information statements and other information regarding
issuers that file electronically with the Securities and Exchange Commission
through the Electronic Data Gathering, Analysis and Retrieval System may be
obtained free of charge.
By Order of the Board of Directors
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Kenneth K. Westbrook
Chief Executive Officer
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APPENDIX A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
INTEGRATED HEALTHCARE HOLDINGS, INC.
I, the undersigned Secretary of Integrated Healthcare Holdings, Inc., a
Nevada corporation, do hereby certify that:
1. The Articles of Incorporation of this Corporation are amended and
restated to read in full as follows:
ARTICLE I
NAME AND OFFICES
Section 1. NAME. The name of the Corporation is Integrated Healthcare
Holdings, Inc.
Section 2. OFFICES. The Corporation may maintain offices for the
transaction of any business at such places within or outside of the State of
Nevada as it may from time to time determine. Corporate business of every kind
and nature may be conducted, and meetings of directors and stockholders may be
held outside the State of Nevada with the same effect as if held in the State of
Nevada.
ARTICLE II
PURPOSE
The Corporation is organized for the purpose of engaging in any lawful
act or activity, within or outside of the State of Nevada, for which a
corporation may be organized under the Nevada Revised Statutes other than the
insurance, banking or trust company businesses.
ARTICLE III
CAPITAL STOCK
Section 1. NUMBER. The aggregate number of shares which the Corporation
shall have authorized is Five Hundred Million (500,000,000) shares of common
stock with par value of $0.001 per share.
Section 2. CLASSES AND SERIES OF STOCK. The shares of the Corporation are
not to be divided into classes. The Corporation is not authorized to issue
shares in series.
Section 3. STATED CAPITAL. The sum of the amount of consideration
received by the Corporation for all shares of the Corporation with par value of
$0.001 that have been issued, except such part of the consideration therefor as
may have been allocated to capital surplus in a manner permitted by law, shall
be the stated capital of the Corporation at any particular time.
Section 4. DIVIDENDS. The holders of the outstanding capital stock shall
be entitled to receive, when and as declared by the Board of Directors, solely
out of the unreserved and unrestricted earned surplus of the Corporation,
dividends payable either in cash, in property, or in shares of the capital stock
of the Corporation.
ARTICLE IV
REGULATION OF INTERNAL AFFAIRS
Section 1. MEETINGS OF STOCKHOLDERS. Meetings of the stockholders of the
Corporation may be held in such place, either within or without the State of
Nevada, as may be provided in the Bylaws. In the absence of any such provision,
all meetings shall be held at the registered office of the Corporation.
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Section 2. MEETINGS OF DIRECTORS. Meetings of the Board of Directors of
the Corporation, regular or special, may be held either within or without the
State of Nevada.
Section 3. BYLAWS. The Bylaws of the Corporation shall be adopted by its
Board of Directors. The power to alter, amend or repeal the Bylaws, or to adopt
new Bylaws, shall be vested in the Board of Directors, except that the Board of
Directors may not alter, amend or repeal Bylaws provisions that are specifically
authorized or approved by a vote of the stockholders of the Corporation. The
Bylaws may contain any provision for the regulation and management of the
affairs of the Corporation not inconsistent with the laws of Nevada or these
Articles of Incorporation.
Section 4. INTEREST OF DIRECTORS IN CONTRACTS. Any contract or other
action between the Corporation and one or more of its directors, or between the
Corporation and any firm of which one or more of its directors are members or
employees, or in which they are interested, or between the Corporation or
association of which one or more of its directors are stockholders, members,
directors, officers, or employees, or in which they are interested, shall be
valid for all purposes, notwithstanding the presence of such director or
directors at the meeting of the Board of Directors of the Corporation which acts
upon, or in reference to, such contract or transaction, and notwithstanding his
or their participation in such action, if the fact of such interest shall be
disclosed or known to the Board of Directors and the Board of Directors, shall,
nevertheless, authorize, approve and ratify such contract or transaction by a
vote of a majority of directors present, such interest of director or directors
to be counted in determining whether a quorum is present, but not to be counted
in calculating the majority necessary to carry such vote. This section shall not
be construed to invalidate any contract or any transaction which would otherwise
be valid under the common and statutory law applicable thereto.
Section 5. AMENDMENT TO ARTICLE OF INCORPORATION. The Corporation
reserves the right from time to time to amend, alter, or repeal, or to add any
provision to its Articles of Incorporation in the manner prescribed by the laws
of Nevada.
Section 6. COMPENSATION OF DIRECTORS. The Board of Directors is
authorized to make provision for reasonable compensation to its members when
their services as directors and to fix the basis and conditions upon which this
compensation shall be made. Any director may also serve in the Corporation in
any capacity and receive compensation therefor in any form.
Section 7. NUMBER OF DIRECTORS. The number of directors of the
Corporation shall be as set forth in the By Laws. Subject to this limitation,
the number of directors may be increased or decreased from time to time by
amendment of the Bylaws, but no decrease shall have the effect of shortening the
term of any incumbent director.
ARTICLE V
INDEMNIFICATION
Section 1. ELIMINATION OF LIABILITY. To the maximum extent permitted
under the Nevada Revised Statutes, a director or officer of the Corporation
shall not be personally liable to the Corporation or its stockholders for
damages arising as a result of any act or failure to act in his capacity as a
director or officer of the Corporation.
Section 2. MANDATORY INDEMNIFICATION. The Corporation shall, to the
maximum extent and in the manner permitted by Nevada law, indemnify each of its
directors and officers against expenses (including attorneys fees), judgments,
fines, settlements, and other amounts actually and reasonably incurred in
connection with any proceeding, arising by reason of the fact that such person
is or was an agent of the corporation. For purposes of this paragraph, a
director or officer of the corporation includes any person (i) who is or was a
director or officer of the corporation, (ii) who is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or (iii) who was a
director or officer of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.
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Section 3. INDEMNIFICATION; MANDATORY PAYMENT OF EXPENSES. The expenses
of officers and directors incurred in defending a civil or criminal action, suit
or proceeding must be paid by the Corporation as they are incurred and in
advance of the final disposition of the action, suit or proceeding, upon and
subject to the receipt by the Corporation of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he or she is not entitled to be indemnified
by the Corporation.
Section 4. EFFECT OF AMENDMENT OR REPEAL. Any amendment to or repeal of
any of the provisions in this Article V shall only be prospective and shall not
adversely affect any right or protection of a director or officer of the
Corporation for or with respect to any act or omission of such director or
officer occurring prior to such amendment or repeal.
* * * * *
2. The foregoing Amended and Restated Articles of Incorporation have been
duly approved by the Board of Directors.
3. The foregoing Amended and Restated Articles of Incorporation have been
duly approved by the required vote of stockholders in accordance with sections
78.390 and 78.403 of the Nevada Revised Statutes. The total number of
outstanding shares of Common Stock of the Corporation is ________________, of
which ______________ shares were voted in favor of the Amended and Restated
Articles of Incorporation. The number of shares voting in favor of the amendment
and restatement equaled or exceeded the vote required. The percentage vote
required under applicable law and the Articles of Incorporation in effect at the
time of this amendment was more than fifty percent (50%) of the outstanding
shares of Common Stock.
EXECUTED this ____ day of ______________, 2009.
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Name: ________________________
Title: Secretary
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