================================================================================
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): JANUARY 13, 2010
INTEGRATED HEALTHCARE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
NEVADA 0-23511 87-0573331
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
1301 N. TUSTIN AVENUE, SANTA ANA, CALIFORNIA 92705
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (714) 953-3503
---------------------------------------------------------------------
(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 January 13, 2010, Integrated Healthcare Holdings, Inc. ("IHHI") and its
subsidiaries (collectively, the "BORROWERS") entered into an Amended and
Restated Memorandum of Understanding (the "MOU") with Dr. Kali P. Chaudhuri
("DR. CHAUDHURI") and KPC Resolution Company, LLC ("KPC"). The MOU amends and
restates the original Memorandum of Understanding entered into by IHHI and Dr.
Chaudhuri on or about August 12, 2009.
On or about August 3, 2009, IHHI's primary lenders, Medical Capital
Corporation and certain of its affiliates ("MEDCAP"), were placed into
receivership by the United States Securities and Exchange Commission.
Concurrently with entering into the MOU, KPC entered into a definitive loan
purchase agreement with the SEC-appointed receiver for MedCap (the "MEDCAP
RECEIVER") to purchase all of IHHI's credit facilities with MedCap (the "CREDIT
FACILITIES") and certain warrants to purchase common stock of IHHI that were
issued to MedCap (the "WARRANTS").
The MOU provides IHHI with certain benefits and obligations upon the
completion of the acquisition of the Credit Facilities and Warrants by KPC. The
following are the material terms of the MOU:
o The Borrowers will cooperate exclusively with the efforts of Dr.
Chaudhuri and KPC to acquire the Credit Facilities from the MedCap
Receiver.
o Dr. Chaudhuri will support, subject to the conditions and
limitations set forth in the MOU, the continuation through October
2011 of the rent abatement from IHHI's landlord, Pacific Coast
Holdings Investment, LLC.
o IHHI has asserted certain claims against the MedCap Receiver in
connection with a credit balance in favor of IHHI under the Credit
Facilities (the "CREDIT BALANCE"), and such claims have been refuted
by the MedCap Receiver. Under the MOU, (i) the Borrowers will
furnish to the MedCap Receiver a release of MedCap, its affiliates
and the MedCap Receiver from claims arising out of the Credit
Facilities and certain other claims, including a release of the
Credit Balance, and (ii) Dr. Chaudhuri will pay to the Borrowers an
amount equal to the value that such claims would have had as an
unsecured claim in the receivership estate of MedCap.
o The MedCap Receiver has asserted certain contractual claims against
IHHI in connection with the Credit Facilities. Under the MOU, (i)
the Borrowers will receive from the MedCap Receiver a limited
release of such claims, and (ii) KPC will waive any right to assert
such claims as the successor lender under the Credit Facilities
(including the right to any interest, penalties or fees under the
Credit Facilities for the period prior to KPC's acquisition of the
Credit Facilities).
o IHHI agreed to cooperate with Dr. Chaudhuri and KPC in good faith to
restructure the Credit Facilities in a mutually beneficial manner
upon completion of KPC's acquisition of the Credit Facilities. Among
other things, (i) the Borrowers will assist Dr. Chaudhuri and KPC in
modifying IHHI's $80,000,000 Credit Agreement and $10,700,000 Credit
Agreement to remove accounts receivable as security for those loans,
(ii) the $50,000,000 Revolving Credit Agreement, under which there
is no balance owing by IHHI, will automatically terminate, and (iii)
if requested by KPC, the Borrowers will extend the maturity date of
the $80,000,000 Credit Agreement and $10,700,000 Credit Agreement
for up to three years past their current maturity date of October 8,
2010.
- 1 -
o IHHI will issue a five-year warrant to Dr. Chaudhuri to acquire up
to 170,000,000 shares of IHHI common stock at an exercise price of
$0.05 per share.
The MOU is furnished as an exhibit to this Report. The preceding
description of the MOU is summary in nature and does not purport to be complete.
This summary should be read in connection with the exhibits hereto.
ITEM 3.02 UNREGISTERED SALE OF EQUITY SECURITIES.
As disclosed in Item 1.01 above, IHHI agreed to issue a five-year warrant
to Dr. Chaudhuri upon the acquisition of the Credit Facilities by KPC. The
disclosure regarding such warrant contained in Item 1.01 is incorporated into
this Item 3.02 by reference. The issuance of such warrant or the underlying
shares of common stock will not be registered under the Securities Act of 1933,
as amended (the "Act"), or any state securities laws, and will be sold in a
transaction exempt from registration pursuant to Section 4(2) of the Act and
Regulation D promulgated thereunder.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
99.1 Amended and Restated Memorandum of Understanding, dated as of
January 13, 2010, by and among the Registrant, WMC-A, Inc., WMC-SA,
Inc., Coastal Communities Hospital, Inc., Chapman Medical Center,
Inc., Dr. Kali P. Chaudhuri, and KPC Resolution Company, LLC.
(certain exhibits have been omitted but will be furnished to the
Commission supplementally upon request).
99.2 Press Release, dated January 20, 2010, issued by the Registrant.
- 2 -
SIGNATURE
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.
Integrated Healthcare Holdings, Inc.
By: /s/ Steven R. Blake
------------------------------
Name: Steven R. Blake
Title: Chief Financial Officer
Date: January 20, 2010
- 3 -