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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): MARCH 3, 2005
INTEGRATED HEALTHCARE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT
AS SPECIFIED IN CHARTER)
NEVADA 0-23511 87-0412182
(STATE OR OTHER (COMMISSION FILE (IRS EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION NO.)
INCORPORATION)
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
-----------------------
(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.
On March 8, 2005, Integrated Healthcare Holdings, Inc. (the "Company")
announced the completion of its $70-million acquisition (the "Hospital
Acquisition") of four Orange County, California hospitals and associated real
estate from subsidiaries of Tenet Healthcare Corporation ("Tenet"). The four
hospitals that were acquired are: (i) 282-bed Western Medical Center--Santa Ana,
CA; (ii) 188-bed Western Medical Center--Anaheim, CA; (iii) 178-bed Coastal
Communities Hospital in Santa Ana, CA; and (iv) 114-bed Chapman Medical Center
in Orange, CA (collectively, the "Hospitals"). The Hospitals were assigned to
four wholly-owned subsidiaries of the Company (the "Subsidiaries") formed for
the purpose of completing the Hospital Acquisition.
The Company also acquired the following real estate, leases and assets
associated with the Hospitals: (i) a fee interest in the Western Medical Center
at 1001 North Tustin Avenue, Santa Ana, CA 92705, a fee interest in the
administration building at 1301 North Tustin Avenue, Santa Ana, CA 92705,
certain rights to acquire condominium suites located in the medical office
building at 999 North Tustin Avenue, Santa Ana, CA, and the business known as
the West Coast Breast Cancer Center; (ii) a fee interest in the Western Medical
Center at 1025 South Anaheim Blvd., Anaheim, CA 92805; (iii) a fee interest in
the Coastal Communities Hospital at 2701 South Bristol Street, Santa Ana, CA
92704, and a fee interest in the medical office building at 1901 North College
Avenue, Santa Ana, CA; (iv) a lease for the Chapman Medical Center at 2601 East
Chapman Avenue, Orange, CA 92869, and a lease for the medical office building at
2617 East Chapman Avenue, Orange, CA; and (v) the furniture, fixtures and
contract rights associated with the Hospitals.
As part of the Company's previously announced agreement to obtain equity
financing and financing commitments of up to $30 million from Orange County
Physicians Investment Network, LLC ("OC-PIN"), at the closing of the Hospital
Acquisition the Company transferred all of the fee interests in real estate
described in the preceding paragraph (the "Transferred Properties") to Pacific
Coast Holdings Investments, LLC ("PCHI"). PCHI is 51% owned by West Coast
Holdings, LLC (owned in part by Dr. Anil Shah) and 49% by Ganesha Realty LLC
(owned in part by Dr. Kali Chaudhuri). The Company then entered into a triple
net lease under which it leased back from PCHI all of the real estate that it
transferred to PCHI.
OC-PIN is a majority shareholder of the Company and is managed by Dr. Anil
V. Shah. OC-PIN is owned by Dr. Shah and a number of physicians practicing at
the Hospitals.
The Company obtained borrowings to complete the Hospital Acquisition from
affiliates of Medical Capital Corporation of Anaheim, CA. The Company obtained a
$50 million acquisition loan and a working capital non-revolving line of credit
of up to $30 million from Medical Provider Financial Corporation II (the
"Lender"). Each of OC-PIN and PCHI guaranteed the Company's obligations under
these credit agreements, and PCHI subordinated to the Lender its rights to
receive payments from the Company. The Company also sold its accounts receivable
associated with the Hospitals to Medical Provider Financial Corporation I.
In connection with the transactions described above, the Company, OC-PIN
and/or PCHI entered into a number of material agreements as follows:
o Second Amendment to Asset Sale Agreement, effective as of January 1,
2005, between the Company and subsidiaries of Tenet Healthcare
Corporation.
o Third Amendment to Asset Sale Agreement, effective as of March 8,
2005, between the Company and subsidiaries of Tenet Healthcare
Corporation.
o Guaranty Agreement, dated as of March 3, 2005, by OC-PIN in favor of
the Lender.
o Guaranty Agreement, dated as of March 3, 2005, by PCHI in favor of
the Lender.
o Subordination Agreement, dated as of March 3, 2005, among the
Company, the Subsidiaries, PCHI and the Lender.
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o Credit Agreement, dated as of March 3, 2005, among the Company, the
Subsidiaries, PCHI, the members of PCHI, and the Lender.
o $50 million acquisition note by the Company and the Subsidiaries.
o $30 million line of credit note by the Company and the Subsidiaries.
o Leases for the properties at the Chapman Medical Center, assigned to
the Company by a subsidiary of Tenet Healthcare Corporation.
o Triple net leases for the Transferred Properties.
The forms of definitive agreements described above are furnished as
exhibits to this Report. The preceding descriptions of these agreements are
summary in nature and do not purport to be complete. This summary should be read
in connection with the exhibits hereto. A copy of the press release announcing
the Hospital Acquisition is also attached as an exhibit hereto.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
The disclosures under Item 1.01 of this Report are hereby incorporated
under this item by reference.
ITEM 8.01 OTHER EVENTS
Effective March 7, 2005, Milan Mehta, former HealthSouth Corporation vice
president of Managed Care Contracts, joined the Company as senior vice president
of Contracting. Effective March 1, 2005, Orange County-based corporate attorney
Hari S. Lal, Esq. joined the Company as executive vice president and general
counsel.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The financial statements required under this section will be filed by
amendment within the timeframe permitted under the requirements for this Form
8-K.
(b) Pro Forma Financial Information.
The financial information required under this section will be filed by
amendment within the timeframe permitted under the requirements for this Form
8-K.
(c) Exhibits.
EXHIBIT DESCRIPTION
NUMBER
99.1 Second Amendment to Asset Sale Agreement, effective as of January 1,
2005, between the Company and certain subsidiaries of Tenet
Healthcare Corporation.
99.2 Third Amendment to Asset Sale Agreement, effective as of March 8,
2005, between the Company and certain subsidiaries of Tenet
Healthcare Corporation.
99.3 Guaranty Agreement, dated as of March 3, 2005, by Orange County
Physicians Investment Network, LLC in favor of Medical Provider
Financial Corporation II.
99.4 Guaranty Agreement, dated as of March 3, 2005, by Pacific Coast
Holdings Investments, LLC in favor of Medical Provider Financial
Corporation II.
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99.5 Subordination Agreement, dated as of March 3, 2005, by and among the
Company and its subsidiaries, Pacific Coast Holdings Investments,
LLC, and Medical Provider Financial Corporation II.
99.6 Credit Agreement, dated as of March 3, 2005, by and among the
Company and its subsidiaries, Pacific Coast Holdings Investments,
LLC and its members, and Medical Provider Financial Corporation II.
99.7 Form of $50 million acquisition note by the Company and the
Subsidiaries.
99.8 Form of $30 million line of credit note by the Company and the
Subsidiaries.
99.9 Triple Net Hospital and Medical Office Building Lease dated March 7,
2005, as amended by Amendment No. 1 To Triple Net Hospital And
Medical Office Building Lease.
99.10 Press Release issued by the Company on March 8, 2005.
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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: March 14, 2005
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
NUMBER
99.1 Second Amendment to Asset Sale Agreement, effective as of January 1,
2005, between the Company and certain subsidiaries of Tenet
Healthcare Corporation.
99.2 Third Amendment to Asset Sale Agreement, effective as of March 8,
2005, between the Company and certain subsidiaries of Tenet
Healthcare Corporation.
99.3 Guaranty Agreement, dated as of March 3, 2005, by Orange County
Physicians Investment Network, LLC in favor of Medical Provider
Financial Corporation II.
99.4 Guaranty Agreement, dated as of March 3, 2005, by Pacific Coast
Holdings Investments, LLC in favor of Medical Provider Financial
Corporation II.
99.5 Subordination Agreement, dated as of March 3, 2005, by and among the
Company and its subsidiaries, Pacific Coast Holdings Investments,
LLC, and Medical Provider Financial Corporation II.
99.6 Credit Agreement, dated as of March 3, 2005, by and among the
Company and its subsidiaries, Pacific Coast Holdings Investments,
LLC and its members, and Medical Provider Financial Corporation II.
99.7 Form of $50 million acquisition note by the Company and the
Subsidiaries.
99.8 Form of $30 million line of credit note by the Company and the
Subsidiaries.
99.9 Triple Net Hospital and Medical Office Building Lease dated March 7,
2005, as amended by Amendment No. 1 To Triple Net Hospital And
Medical Office Building Lease.
99.10 Press Release issued by the Company on March 8, 2005.
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