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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 27, 2005
INTEGRATED HEALTHCARE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED
IN CHARTER)
NEVADA 0-23511 87-0412182
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (IRS EMPLOYER
INCORPORATION) NO.) IDENTIFICATION)
695 TOWN CENTER DRIVE, SUITE 260, COSTA MESA, CALIFORNIA 92626
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (714) 434-9191
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(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))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Rescission, Restructuring and Assignment Agreement
On January 27, 2005, Integrated Healthcare Holdings Inc. (the "Company")
entered into a Rescission, Restructuring and Assignment Agreement (the
"Restructuring Agreement") with Kali P. Chaudhuri, M.D., William E. Thomas, Anil
V. Shah, M.D., and Orange County Physicians Investment Network, LLC. The
Restructuring Agreement amends certain provisions of the Secured Convertible
Note Purchase Agreement, dated as of September 28, 2004, between the Company and
Kali P. Chaudhuri, M.D., as amended on November 16, 2004, pursuant to which Dr.
Chaudhuri was issued a $500,000 Secured Convertible Promissory Note, a
$10,000,000 Secured Promissory Note, and a Stock Option Agreement dated November
16, 2004. The following is a brief description of the material terms of the
Restructuring Agreement, which is qualified in its entirety by reference to
Exhibit 99.1 filed herewith:
o Upon the satisfaction of certain conditions, the aforementioned
$500,000 Secured Convertible Promissory Note, $10,000,000 Secured
Promissory Note, and Stock Option Agreement held by Kali P.
Chaudhuri, M.D. will each be rescinded and cancelled;
o OC-PIN will pay or cause the Company to pay to Kali P. Chaudhuri,
M.D., or will cause to be released from escrow back to Kali P.
Chaudhuri, M.D., $10,000,000 plus accrued interest;
o The Company will issue to Kali P. Chaudhuri, M.D. and William E.
Thomas (i) non-convertible secured promissory notes reflecting
amounts loaned to the Company by Dr. Chaudhuri as well as
expenditures made by Dr. Chaudhuri on the Company's behalf or for
the Company's benefit, plus accrued interest and (ii) warrants to
acquire up to 24.9% of the common stock of the Company exercisable
for a period of 18 months beginning 2 years after issuance of the
warrants;
o The Company will issue to Kali P. Chaudhuri, M.D. and William E.
Thomas a general pre-emptive right to participate in future sales of
equity securities by the Company up to 24.9%, and a tag-along right
relating to future issuances of stock to Dr. Shah or OC-PIN;
o OC-PIN and Kali P. Chaudhuri, M.D. will form a new real estate
holding company to own and operate certain real estate assets
acquired from Tenet, with Dr. Chaudhuri to own no more than 49% of
the holding company. The Company and the holding company will be
co-borrowers with respect to a proposed credit facility and will
enter into a mutually acceptable inter-borrower and cross-indemnity
agreement. The holding company will enter into a Triple Net Hospital
And Medical Office Building Lease with the Company in substantially
the form attached to the Restructuring Agreement.
Stock Purchase Agreement with OC-PIN
On January 28, 2005, the Company entered into a Stock Purchase Agreement
with Orange County Physicians Investment Network, LLC, pursuant to which OC-PIN
will invest $30,000,000 in the Company for an aggregate of 108,000,000 shares of
common stock of the Company (a portion of which shares will be acquired by an
affiliate of OC-PIN). In addition, the Purchase Option Agreement, dated November
16, 2004, between the Company and Dr. Anil V. Shah has been terminated. The
foregoing is qualified in its entirety by reference to Exhibit 99.2 filed
herewith.
Tenet Agreements
On January 28, 2005, the Company entered into a letter agreement with
subsidiaries of Tenet Healthcare Corporation ("Tenet") pursuant to which Tenet
agreed to extend the closing date of the Company's pending acquisition of four
hospital facilities from Tenet to February 28, 2005 from the original date of
December 31, 2004. In addition, the Company agreed to make non-refundable
$5,000,000 of its good-faith deposit. The foregoing is qualified in its entirety
by reference to Exhibit 99.3 filed herewith.
In addition, on January 28, 2005, the Company agreed with Tenet to amend
the pending Asset Sale Agreement, dated September 29, 2004, between the Company
and Tenet to substitute Dr. Anil V. Shah as guarantor of the Chapman Medical
Center Leases. The foregoing is qualified in its entirety by reference to
Exhibit 99.4 filed herewith.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
Reference is made to disclosures contained in Item 1.01 above involving
the unregistered sales of equity securities of the Company, which disclosure is
incorporated herein by reference. These sales of securities were made to
accredited investors pursuant to Regulation D of the Securities Act of 1933.
ITEM 5.01 CHANGE IN CONTROL OF REGISTRANT.
Pursuant to the transactions described above in Item 1.01, Dr. Anil V.
Shah, OC-PIN and their affiliates will acquire 108,000,000 shares of common
stock, constituting control of the Company. Based on the currently outstanding
shares of common stock of the Company (not including any outstanding options,
warrants or other instruments convertible into common stock), these shares when
fully issued would amount to approximately 84% of the outstanding shares of the
Company. Pursuant to this investment, Dr. Anil V. Shah was appointed a director
of the Company. The sources of funds used to make this investment are described
in Item 1.01 and the exhibits attached hereto, each of which is incorporated by
reference herein.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
Effective January 31, 2005, Dr. Anil V. Shah was appointed a member of the
board of directors of the Company, and elected Chairman of the Board.
There are a number of currently proposed transactions involving Dr. Shah,
all of which have been disclosed in this Report on Form 8-K, the Company's
Report on Form 8-K dated November 22, 2004, and the Company's Report on Form 8-K
dated October 5, 2004, each of which is hereby incorporated by reference herein.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 Rescission, Restructuring and Assignment Agreement, dated January 27,
2005, by and among the Registrant, Kali P. Chaudhuri, M.D., William E.
Thomas, Anil V. Shah, M.D., and Orange County Physicians Investment
Network, LLC
99.2 Stock Purchase Agreement, dated January 28, 2005, by and between the
Registrant and Orange County Physicians Investment Network, LLC
99.3 Letter Agreement, dated January 28, 2005, by and between the Registrant
and subsidiaries of Tenet Healthcare Corporation
99.4 First Amendment to Asset Sale Agreement, dated January 28, 2005, by and
between the Registrant and subsidiaries of Tenet Healthcare Corporation
99.5 Press Release issued by Registrant on January 28, 2005
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.
Integrated Healthcare Holdings, Inc.
By: /s/ Bruce Mogel
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Name: Bruce Mogel
Title: Chief Executive Officer
Date: February 2, 2005
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
NUMBER
99.1 Rescission, Restructuring and Assignment Agreement, dated January 27,
2005, by and among the Registrant, Kali P. Chaudhuri, M.D., William E.
Thomas, Anil V. Shah, M.D., and Orange County Physicians Investment
Network, LLC
99.2 Stock Purchase Agreement, dated January 28, 2005, by and between the
Registrant and Orange County Physicians Investment Network, LLC
99.3 Letter Agreement, dated January 28, 2005, by and between the Registrant
and subsidiaries of Tenet Healthcare Corporation
99.4 First Amendment to Asset Sale Agreement, dated January 28, 2005, by and
between the Registrant and subsidiaries of Tenet Healthcare Corporation
99.5 Press Release issued by Registrant on January 28, 2005