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): September 30, 2005
ORION HEALTHCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 001-16587 58-1597246
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification
Incorporation) Number)
1805 Old Alabama Road, Suite 350
Roswell, GA 30076
(Address of Principal Executive Offices) (Zip Code)
(678) 832-1800
(Registrant's Telephone Number, Including Area Code)
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 (see General Instruction A.2. below):
|_| 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))
Section 1 Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
On September 30, 2005, Orion HealthCorp, Inc. ("Orion") executed a Purchase
Agreement (the "TASC Agreement") by and among Tuscarawas Ambulatory Surgery
Center, L.L.C. ("TASC"), each of the individuals holding a minority equity
interest in TASC (the "TASC Selling Investors" and together with Orion, the
"TASC Sellers") and Union Hospital ("Union"). The consummation of the
transactions contemplated by the TASC Agreement (the "TASC Closing") occurred
concurrently with the execution of the TASC Agreement, as amended by the Closing
Distribution Agreement, which was deemed to be effective as of 12:01 a.m. on
October 1, 2005 (the "TASC Closing Date").
Prior to the execution of the TASC Agreement, the TASC Sellers owned units
in TASC, which is organized as an Ohio limited liability corporation. Under the
TASC Agreement, the TASC Selling Investors agreed to sell 19.5 ownership units
(the "TASC Units") to Union and Orion agreed to sell 54 TASC Units, which
represents 100% of Orion's equity interests in TASC, to Union, such that upon
the TASC Closing Date, Union would own 70% of the TASC Units.
As consideration for the purchase of these TASC Units, Union paid a price
of $12,666.67 per TASC Unit for a total purchase price of $950,000. The purchase
price, less $82,632.47 in closing costs, was paid to the TASC Sellers as follows
on the TASC Closing Date:
(i) Payment to Orion of $208,823.73 in immediately available funds;
(ii) Retention by Orion of the $250,000 escrow closing deposit previously
paid by Union;
(iii) As a portion of the single note payable from Union to Orion due on or
before March 30, 2006 in the gross amount of $530,547.37 (the
"Note")[which relates to all three transactions described herein], the
amount of $196,638.75; and
(iv) Payment of 100% of the net purchase price to the TASC Selling
Investors (collectively, $230,117.92), such amount to be by cashier's
or certified check.
Additionally, as part of the TASC Agreement, Orion executed a management
services agreement (the "TASC MSA) with TASC for a period of two years from the
TASC Closing Date.
A copy of the TASC Agreement, as amended, is attached hereto as Exhibit
2.1.
On September 30, 2005 and concurrent with the execution of the TASC
Agreement, Union and TASC Anesthesia, L.L.C. ("TASC Anesthesia"), an Ohio
limited liability company whose sole member is TASC, executed an Asset Purchase
Agreement (the "TASC Anesthesia Agreement") to purchase certain assets of TASC
Anesthesia for the purchase price of $77,524.00, payable to the TASC Sellers on
a pro rata basis, determined by the TASC Units that were owned by each TASC
Seller immediately prior to the execution of the TASC Agreement. The
consummation of the transactions contemplated by the TASC Anesthesia Agreement
(the "TASC Anesthesia Closing") occurred concurrently with the execution of the
TASC Anesthesia Agreement, as amended by the Closing Distribution Agreement,
which was deemed to be effective as of 12:01 a.m. on October 1, 2005 (the "TASC
Anesthesia Closing Date"). The consideration for the TASC Anesthesia Agreement
was paid to TASC and then distributed to the TASC Sellers as follows as of the
TASC Anesthesia Closing Date:
(i) Payment to Orion of $27,908.64 in immediately available funds;
(ii) As a portion of the Note, the amount of $11,960.85; and
(iii) Payment of 100% of the purchase price to the TASC Selling Investors
(collectively, $37,986.76), such amount to be by cashier's or
certified check.
A copy of the TASC Anesthesia Agreement, as amended, is attached hereto as
Exhibit 2.2.
On September 30, 2005, Orion executed a Purchase Agreement (the "TOM
Agreement") by and among Tuscarawas Open MRI, L.P. ("TOM"), each of the
individuals holding a minority equity interest in TOM (the "TOM Selling
Investors" and together with Orion, the "TOM Sellers") and Union. The
consummation of the transactions contemplated by the TOM Agreement (the "TOM
Closing") occurred concurrently with the execution of the TOM Agreement, as
amended by the Closing Distribution Agreement, which was deemed to be effective
as of 12:01 a.m. on October 1, 2005 (the "TOM Closing Date").
Prior to the execution of the TOM Agreement, the TOM Sellers owned general
or limited partnership interests in TOM (together, the "Interests"), which is
organized as an Ohio limited partnership. Under the TOM Agreement, the TOM
Selling Investors agreed to sell 29% of the Interests (the "TOM Interests") to
Union and Orion agreed to sell 41% of the TOM Interests, which represents 100%
of Orion's equity interests in TOM, to Union, such that upon the TOM Closing
Date, Union will own 70% of the TOM Interests.
As consideration for the purchase of these TOM Interests, Union paid a
price of $26,640.34 per TOM Interest for a total purchase price of
$2,188,237.35. The purchase price, less $82,632.47 in closing costs, was paid to
the TOM Sellers as follows as of the TOM Closing Date:
(i) Payment to Orion of $486,426.85 in immediately available funds;
(ii) Retention by Orion of the $250,000 escrow closing deposit previously
paid by Union;
(iii) As a portion of the Note, the amount of $321,947.77; and
(iv) Payment of 100% of the net purchase price to the TASC Selling
Investors (collectively, $1,047,230.43), such amount to be by
cashier's or certified check.
Additionally, as part of the TOM Agreement, Orion executed a management
services agreement (the "TOM MSA") with TOM for a period of two years from the
TOM Closing Date.
A copy of the TOM Agreement, as amended, is attached hereto as Exhibit 2.3.
Section 2 Financial Information
Item 2.01 Completion of Acquisition or Disposition of Assets
The information required by this item is included in Item 1.01 and is
incorporated herein by reference.
Section 8 Other Events
Item 8.01 Other Events
On October 3, 2005, the Company issued a press release announcing that it
has successfully completed the previously announced sale of its equity interests
in an ambulatory surgery center, an MRI facility and an anesthesia management
business in Dover, Ohio to a local hospital. A copy of the press release is
attached herein as Exhibit 99.1.
Section 9 Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(c) Exhibits - The following exhibits are furnished as part of this current
report:
Exhibit Description
------- ------------
2.1 Purchase Agreement, dated as of September 30, 2005, by and among
Tuscarawas Ambulatory Surgery Center, L.L.C., Orion HealthCorp, Inc.,
each of the individuals holding a minority equity interest in
Tuscarawas Ambulatory Surgery Center, L.L.C., and Union Hospital
2.2 Asset Purchase Agreement, dated as of September 30, 2005, by and
between Union Hospital and TASC Anesthesia, L.L.C.
2.3 Purchase Agreement, dated as of September 30, 2005, by and among
Tuscarawas Open MRI, L.P., Orion HealthCorp, Inc., each of the
individuals holding a minority equity interest in Tuscarawas Open MRI,
L.P., and Union Hospital
99.1 Copy of press release issued by the Company on October 3, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ORION HEALTHCORP, INC.
By: /s/ Stephen H. Murdock
----------------------------------
Stephen H. Murdock
Chief Financial Officer
Date: October 7, 2005
Exhibit Description
------- -----------
2.1 Purchase Agreement, dated as of September 30, 2005, by and among
Tuscarawas Ambulatory Surgery Center, L.L.C., Orion HealthCorp, Inc.,
each of the individuals holding a minority equity interest in
Tuscarawas Ambulatory Surgery Center, L.L.C., and Union Hospital
2.2 Asset Purchase Agreement, dated as of September 30, 2005, by and
between Union Hospital and TASC Anesthesia, L.L.C.
2.3 Purchase Agreement, dated as of September 30, 2005, by and among
Tuscarawas Open MRI, L.P., Orion HealthCorp, Inc., each of the
individuals holding a minority equity interest in Tuscarawas Open MRI,
L.P., and Union Hospital
99.1 Copy of press release issued by the Company on October 3, 2005.