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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 1, 2006
ORION HEALTHCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 001-16587 58-1597246
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification 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))
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Section 1 Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
On February 8, 2006, SurgiCare Memorial Village, L.P. ("Memorial
Village") executed an Asset Purchase Agreement (the "Memorial Village
Agreement") for the sale of substantially all of its assets to First
Surgical Memorial Village, L.P. Memorial Village was approximately 49%
owned by Town & Country SurgiCare, Inc., a wholly-owned subsidiary of
Orion HealthCorp, Inc. ("Orion"). The Memorial Village Agreement was
deemed to be effective as of January 31, 2006. This transaction is
incorporated by reference to Orion's Current Report on Form 8-K filed
on February 14, 2006.
On March 1, 2006, San Jacinto Surgery Center, Ltd. ("San Jacinto")
executed an Asset Purchase Agreement (the "Agreement") for the sale of
substantially all of its assets to San Jacinto Methodist Hospital
("Purchaser"). San Jacinto is 10% owned by Baytown SurgiCare, Inc., a
wholly-owned subsidiary of Orion. The Agreement was deemed to be
effective as of March 1, 2006.
The property sold by San Jacinto to the Purchaser (hereinafter
collectively referred to as the "Acquired Assets"), included the
leasehold title to real property, together with all improvements,
buildings and fixtures, all major, minor or other equipment, all
computer equipment and hardware, vehicles, furniture and furnishings,
inventory and supplies, current financial, patient, credentialing and
personnel records, interest in all commitments, contracts, leases and
agreements outstanding in respect to San Jacinto, to the extent
assignable, all licenses and permits held by San Jacinto, all patents
and patent applications and all logos, names, trade names, trademarks
an service marks, all computer software, programs and similar systems
owned by or licensed to San Jacinto, goodwill and all interests in
property, real, personal and mixed, tangible and intangible acquired
by San Jacinto prior to March 1, 2006. The Acquired Assets did not
include any of the following: restricted and unrestricted cash and
cash equivalents, marketable securities, certificates of deposit, bank
accounts, temporary investments, accounts receivable, notes receivable
intercompany accounts of San Jacinto, and all commitments, contracts,
leases and agreements other than those expressly assumed by the
Purchaser in the Agreement.
As consideration for the Acquired Assets, San Jacinto received a total
purchase price of $5,500,000, of which Orion received a net amount of
approximately $598,000. The proceeds received by Orion consisted of
the following amounts:
i. Approximately $450,000 representing Orion's pro-rata share
of the net proceeds; and
ii. Approximately $148,000 representing the principal and
interest amounts of a note payable owed to Orion from San
Jacinto.
As part of the closing of the Agreement, Orion was obligated to make
payments, totaling $607,000, from its portion of the proceeds as
follows:
i. Approximately $357,000 representing distributions due to the
limited partners of San Jacinto for cash collections
previously received by Orion, and payment of accounts
payable and other expenses; and
ii. Approximately $250,000 to CIT Healthcare, LLC (f/k/a
Healthcare Business Credit Corporation) ("CIT") which
represents repayment of the obligations related to San
Jacinto under Orion's Loan and Security Agreement dated
December 15, 2004.
A copy of the Agreement is attached as Exhibit 2.1 to this current
report.
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.
In April 2005, the Company formally announced the initiation of a
strategic plan designed to accelerate the Company's growth and enhance
its future earnings potential. The plan was to focus on the Company's
strengths, which include providing billing, collections and
complementary business management services to physician practices in
addition to the provision of development and management services to
ambulatory surgery centers. As part of this strategic plan, the
Company announced that it would begin to divest certain non-strategic
assets. In addition, the Company announced it would cease investment
in business lines that do not complement the Company's strategic plan
and will redirect financial resources and company personnel to areas
that management believes enhances long-term growth potential. In the
third quarter of 2005, the Company successfully completed the
aforementioned consolidation of corporate functions into its Roswell,
Georgia facility. Consistent with its strategic plan, the Company also
completed a series of transactions involving the divestiture of
non-strategic assets in 2005. As a result of the sales of Orion's
interests in Memorial Village and San Jacinto, Orion no longer has an
ownership interest in any ambulatory surgery centers.
Section 7 Regulation FD
Item 7.01 Regulation FD Disclosure
On March 2, 2006, the Company issued a press release announcing that
it had completed the sale of its equity interests in two ambulatory
surgery centers in Houston, Texas. The press release is attached as
Exhibit 99.1 to this current report.
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
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2.1 Asset Purchase Agreement, dated as of March 1, 2006, by and between
San Jacinto Methodist Hospital and San Jacinto Surgery Center, Ltd.*
99.1 Copy of press release issued by the Company on March 2, 2006
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* Pursuant to Item 601(b)(2) of Regulation S-B, certain exhibits and schedules
have been omitted from this filing. The Company agrees to furnish to the
Securities and Exchange Commission on a supplemental basis a copy of any omitted
exhibit or schedule.
SIGNATURES
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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
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Stephen H. Murdock
Chief Financial Officer
Date: March 6, 2006
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
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2.1 Asset Purchase Agreement, dated as of March 1, 2006, by and between
San Jacinto Methodist Hospital and San Jacinto Surgery Center, Ltd.*
99.1 Copy of press release issued by the Company on March 2, 2006
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* Pursuant to Item 601(b)(2) of Regulation S-B, certain exhibits and schedules
have been omitted from this filing. The Company agrees to furnish to the
Securities and Exchange Commission on a supplemental basis a copy of any omitted
exhibit or schedule.