Attached files
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): December 30,
2009
MICROHELIX,
INC.
(Exact
name of Registrant as specified in its charter)
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Oregon
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001-16781
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91-1758621
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(State
or other jurisdiction
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(Commission
File No.)
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(IRS
Employer
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of
incorporation)
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Identification
No.)
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5300
Meadows Rd., Suite 400, Lake Oswego, Oregon
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97035
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: 503-419-3564
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 CFR240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement.
Effective December 30 and 31, 2009,
microHelix, Inc. ("microHelix" or the "Company") entered into agreements
pursuant to which it, with two other parties, formed a limited liability
company, WS Technologies LLC ("WS Technologies"), that acquired the right to
service and collect consumer receivables generated by hospitals on a recourse
basis with regard to the hospital ("Receivables"), together with certain
software that will be used to perform that service. WS Technologies
then redeemed all but half of one membership unit (a "Unit") held by the other
two parties, with the result that microHelix now owns 99% of WS
Technologies. The agreements are as follows:
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1.
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Contribution
Agreement (the "Aequitas Contribution Agreement") dated December 30, 2009
between WS Technologies and Aequitas Capital Management, Inc.
("Aequitas").
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Under the
Aequitas Contribution Agreement, Aequitas contributed the exclusive right to
service and receive compensation and origination fees for all receivables owned
and generated in the future by CarePayment, LLC ("Receivables"), together with
certain assets required to perform that service, including the CarePayment
proprietary accounting software system (the "Software"). In exchange for
that contribution, WS Technologies issued units representing a 28% ownership
interest in WS Technologies to Aequitas.
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2.
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Contribution
Agreement (the "CarePayment Contribution Agreement") dated
December 30, 2009 between WS Technologies and CarePayment, LLC
("Carepayment").
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Under the
CarePayment Contribution Agreement, CarePayment contributed the service marks
CarePayment® and CarePayment.com and the Internet domain name
"CarePayment.com." In exchange for that contribution, WS Technologies
issued units representing a 22% ownership interest in WS Technologies to
CarePayment. WS Technologies intends to use the CarePayment brand in
the ordinary course of its business and in connection with providing services to
its customers.
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3.
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Contribution
Agreement (the "microHelix Contribution Agreement") dated
December 30, 2009 between WS Technologies and the
Company.
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Under the
microHelix Contribution Agreement, the Company contributed 1 million shares of
its Series D Preferred Stock (the "Series D Preferred") and warrants to purchase
65,100,917 shares of Class B Common Stock of microHelix at an exercise price of
$0.001 per share (the "Warrants"). In exchange for that contribution,
WS Technologies issued units representing a 50% ownership interest in WS
Technologies to microHelix. The Warrants expire on December 31,
2014.
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4.
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Servicing
Agreement (the "Servicing Agreement") dated December 31, 2009 between
WS Technologies and CarePayment.
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Under the
Servicing Agreement, CarePayment grants WS Technologies the exclusive right to
collect, administer and service all Receivables purchased or controlled by
CarePayment. CarePayment also appoints WS Technologies as a
non-exclusive originator of Receivables purchased or controlled by CarePayment,
including negotiating with hospitals on behalf of CarePayment with respect to
such services.
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5.
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Royalty
Agreement ("Royalty Agreement") dated December 31, 2009 between WS
Technologies and Aequitas.
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Under the
Royalty Agreement, WS Technologies pays Aequitas a royalty based on new products
(the "Products") developed by WS Technologies or co-developed by WS Technologies
and Aequitas or its affiliates and that are based on or use the
Software. The royalty is equal to (i) 1.0% of the net revenue
received by WS Technologies and generated by the Products that utilize funding
provided by Aequitas or its affiliates and (ii) 7.0% of the face amount, or such
other percentage as the parties may agree, of receivables serviced by WS
Technologies that do not utilize such funding.
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6.
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Trademark
License Agreement ("Trademark License") dated December 31, 2009
between WS Technologies and Aequitas Holdings, LLC ("Aequitas
Holdings").
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Under the
Trademark License, WS Technologies grants the non-exclusive use of the
CarePayment name and service mark to Aequitas Holdings and its
affiliates. Aequitas Holdings may also sublicense the use of the
CarePayment name and trademark to its business partners that are involved in the
marketing and sale of Aequitas Holdings products or joint products with those
business partners.
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7.
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Administrative
Services Agreement dated December 31, 2009 (the "Administrative Services
Agreement") between Aequitas and WS
Technologies.
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Aequitas
provides WS Technologies management support services such as accounting,
financial services, human resources and information technology
services. The total fee for the services is approximately $65,100 per
month. The fees will increase by 3% on January 1 of each year,
beginning January 1, 2011. Either party may change the services
(including terminating a particular service) upon 180 days prior written notice
to the other party, and the Administrative Services Agreement is terminable by
either party on 180 days notice.
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8.
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Redemption
Agreement dated December 31, 2009 between WS Technologies and
Aequitas (the "Aequitas Redemption
Agreement").
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Under the
Aequitas Redemption Agreement, WS Technologies redeemed all but half of one Unit
of WS Technologies held by Aequitas in WS Technologies in exchange for 600,000
shares of Series D Preferred Stock of the Company.
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9.
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Redemption
Agreement dated December 31, 2009 between WS Technologies and
CarePayment (the "CarePayment Redemption
Agreement").
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Under the
CarePayment Redemption Agreement, WS Technologies redeemed all but half of one
Unit of WS Technologies held by CarePayment in WS Technologies for 400,000
shares of Series D Preferred Stock of the Company and the Warrants.
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10.
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Sublease
Agreement ("Sublease") dated December 31, 2009 between WS
Technologies and Aequitas.
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WS
Technologies leases certain office space and personal property from Aequitas
pursuant to the Sublease. The rent for the real property is $12,424
per month, and will increase by 3% each year beginning January 1,
2011. The rent for the personal property is $6,262 per month, and WS
Technologies also pays all personal property taxes related to the personal
property it uses under the Sublease. The term of the Sublease ends on
October 31, 2014.
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11.
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First
Amendment to the Third Amended and Restated Promissory Note (the "Note
Amendment") dated December 31, 2009 between microHelix, Moore
Electronics, Inc. and MH Financial Associates, LLC ("MH
Financial").
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Under the
terms of the Note Amendment, MH Financial agreed to extend the maturity date of
the Third Amended and Restated Promissory Note (the "Note") to December 31,
2011. In addition, the interest rate on the principal amounts
outstanding under the Note will be decreased from 20% to 8% per annum after the
Company makes a $400,000 payment of principal under the Note. The
Note, as amended by the Note Amendment, continues to be secured by substantially
all of the assets of the Company.
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12.
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First
Amendment to Multiple Advance Promissory Note (the "Amended Aequitas
Note") dated December 31, 2009 between microHelix, Moore Electronics,
Inc. and Aequitas.
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Under the
Amended Aequitas Note, the maximum principal amount microHelix may borrow is
increased to $360,000, and the maturity date is extended to March 31,
2010.
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13.
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Investor
Rights Agreement ("Investor Rights Agreement") dated December 31,
2009 between microHelix, Aequitas and
CarePayment.
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Under the
Investor Rights Agreement, microHelix agrees that, as long as Aequitas and
CarePayment or their affiliates own securities in microHelix, microHelix
will pay all expenses incurred by, or on behalf of Aequitas, and CarePayment in
connection with the preparation and filing with the Securities and Exchange
Commission, or other regulatory agencies, of reports or other documents related
to microHelix or any securities owned by Aequitas and CarePayment or their
affiliates in microHelix. In addition, if microHelix fails to redeem
the Series D Preferred Stock by January 31, 2013 in accordance with Section
4.1(b) of the Certificate of Designation for the Series D Preferred Stock,
(i) Aequitas (or its assignee) will have the right to exchange all of its
shares of Series D Preferred Stock for 55.5 Units of WS Technologies, and
(ii) CarePayment will have the right to exchange all of its shares of
Series D Preferred Stock for 42.5 Units, which could result in Aequitas and
CarePayment (or its assignee) together owning 99% of WS
Technologies.
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14.
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WS
Technologies LLC Operating Agreement dated December 30, 2009 ("Operating
Agreement").
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The
Operating Agreement designates the Company as the manager of WS
Technologies. After the transactions disclosed in this Form 8-K, the
Company owns 99% of the Units issued by WS Technologies pursuant to the
Operating Agreement.
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15.
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Amended
and Restated Advisory Services Agreement dated December 31, 2009 between
microHelix, Inc. and Aequitas Capital Management, Inc. ("Advisory
Agreement").
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Under the
Advisory Agreement, Aequitas provides strategy development, strategic planning,
marketing, corporate development and such other advisory services as the Company
reasonably requests from time to time. The Company pays Aequitas a
monthly fee of $15,000 in exchange for the services, and Aequitas will receive a
success fee in the event of certain transactions entered into by the
Company. The Agreement terminates on the earliest to occur of (a) a
Sale Transaction (defined below), (b) termination by Aequitas upon 30 days
written notice to the Company, or (c) the date that Aequitas or an affiliate of
Aequitas ceases to have a debt or equity investment in the Company (the
"Term"). "Sale Transaction" means (i) the sale (in one or a series of
related transactions) of all or substantially all of the Company's assets to a
person or a group of persons acting in concert, (ii) the sale or transfer (in
one or a series of related transactions) of a majority of the outstanding
capital stock of the Company, to one person or a group of persons acting in
concert, or (iii) the merger or consolidation of the Company with or into
another person that is not an affiliate of the Company.
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Aequitas
is an affiliate of MH Financial, one of the Company's largest
shareholders. The Company's two board members, Mr. Thomas Sidley and
Mr. Donald Megrath, are affiliates of Aequitas. CarePayment is a
wholly owned subsidiary of Aequitas Commercial Finance, LLC, which is a
subsidiary of Aequitas Holdings, LLC, an affiliate of Aequitas.
All of the above agreements are
exhibits to this Form 8-K.
Item
2.01 Completion of Acquisition or Disposition of Assets.
Pursuant to the agreements described in
Item 1.01 above, on
December 31, 2009, microHelix completed a series of transactions in which it
became the 99% owner of WS Technologies. WS Technologies purchased
the right to service the Receivables from Aequitas, and entered into the
Servicing Agreement with CarePayment, as described above. The Company
also acquired the Software from Aequitas and certain service marks from
CarePayment. WS Technologies will use the Software and the trademarks
to service the Receivables. Aequitas is an affiliate of MH Financial,
one of the Company's largest shareholders, and is also an affiliate of
CarePayment. microHelix issued 1,000,000 shares of Series D Preferred
Stock and the Warrants to WS Technologies pursuant to the microHelix
Contribution Agreement described above, and WS Technologies used the Series D
Preferred Stock and the Warrants as consideration under the Aequitas Redemption
Agreement and the CarePayment Redemption Agreement.
The Company does not consider the
assets acquired to be a "business" as defined in the instructions to Form
8-K. Rather, the Company completed the acquisition of disparate
assets from two different sources in an attempt to create a business under which
the Company can begin to operate again. Therefore, no financial
statements for those assets have been included with this Form 8-K.
Item
3.02 Unregistered Sale of Equity Securities.
microHelix issued 1,000,000 shares of
Series D Preferred Stock and the Warrants to WS Technologies pursuant to the
microHelix Contribution Agreement described in Item 1.01 above. The
Series D Preferred Stock is valued at $10 per share. Holders of the
Series D Preferred Stock receive a preferred dividend of $0.50 per share per
annum as, when and if declared by the Company’s Board of
Directors, and a liquidation preference of $10 per share, plus cumulative
unpaid dividends. The Company may redeem all of the Series D
Preferred Stock at any time upon ten days' prior written notice, and is required
to redeem all of the Series D Preferred Stock in January 2013 at a purchase
price equal to the liquidation preference in effect on January 1,
2013. If the Company is unable to redeem the Series D Preferred Stock
with cash or other immediately available funds for any reason, pursuant to the
Investor Rights Agreement, (i) Aequitas (or its assignee) will have
the right to exchange all of its shares of Series D Preferred Stock for 55.5
units of WS Technologies. and (ii) Care Payment (or its assignee) will have
the right to exchange all of its shares of Series D Preferred Stock for 42.5
units
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The
Warrant is exercisable at a price of $0.001 per share of Class B Common
Stock, and expires on December 31, 2014. The Company has agreed to use
commercially reasonable efforts to call as soon as possible a shareholders
meeting for the purpose of amending its Amended and Restated Articles of
Incorporation, as amended, to include enough authorized shares of Class B Common
Stock to permit exercise of the Warrant in full. The Warrant may not
be exercised until such an amendment has been completed. If, for
any reason, the Company does not authorize Class B Common Stock, then the
Warrant will be exercisable for shares of Common Stock. The
Company intends that new Class B Common Stock will have preferential voting
rights and the ability to elect a majority of the Company's Board of
Directors. Existing shareholders are expected to receive shares of
Class A Common Stock which the Company anticipates will have one vote per
share and will have the right to elect a minority of the Board of
Directors.
On
December 30, 2009, MH Financial Associates, LLC provided notice to the Company
that it elected on December 22, 2009 to convert all of its shares of Series C
Preferred Stock into 186,047 shares of Common Stock.
On
December 30, 2009, MH Financial Associates, LLC exercised a warrant to purchase
3,084,856 shares of Common Stock, Aequitas Capital Management, Inc. exercised a
warrant to purchase 1,066,667 shares of Common Stock, Aequitas Catalyst Fund,
LLC exercised warrants to purchase a total of 4,366,602 shares of Common Stock,
Thurman Holdings I, Limited Partnership exercised warrants to purchase a
total of 2,822,867 shares of Common Stock, and CTK Capital Corporation exercised
a warrant to purchase 332,384 shares of Common Stock.
The
issuance of the Series D Preferred Stock, the Warrants and the Common Stock upon
exercise of warrants described above was exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to
Regulation D promulgated under the Securities Act.
Item
3.03 Material Modification to Rights of Security
Holders.
microHelix amended its Amended and
Restated Articles of Incorporation, as amended, on December 30, 2009 by filing a
Certificate of Designation with the Oregon Secretary of State designating
1,200,000 shares of its Preferred Stock as Series D Preferred
Stock. One million shares of Series D Preferred Stock were
issued to WS Technologies on December 30, 2009. WS Technologies
transferred 600,000 shares of the Series D Preferred Stock to Aequitas pursuant
to the Aequitas Redemption Agreement, and 400,000 shares of the Series D
Preferred Stock to CarePayment pursuant to the CarePayment Redemption
Agreement. The rights of the holders of microHelix's Common Stock may
be materially limited by the issuance of Series D Preferred Stock in that the
Series D Preferred Stock holders have superior liquidation preferences over the
Common Stock holders in the event of any liquidation, dissolution or winding up
of microHelix, either voluntary or involuntary. In any such event,
the assets of microHelix would be distributed in the following
order:
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First,
to the holders of the Series D Preferred Stock until they receive an
amount equal to $10.00 per share (as adjusted for stock splits, stock
dividends, reclassification and the like), plus all cumulative but unpaid
dividends for each share of Series D Preferred Stock then held by
them. The holders of the Series D Preferred Stock will be
entitled to receive a cumulative annual dividend of $0.50 per
share.
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Second,
any remaining assets of microHelix would be distributed pro rata to the
holders of Common Stock based on the number of shares of Common Stock then
held by each holder.
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Item
5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On December 30, 2009, James E. Horswill
resigned as the President, Chief Financial Officer, Secretary and as a director
of the Company and its wholly owned subsidiary, Moore Electronics, Inc.
("Moore").
On December 30, 2009, Thomas Sidley,
53, was appointed President and Chief Executive Officer of the Company and
of Moore. Thomas Sidley is currently the Company's Chairman of the
Board, and has an extensive 20-year background in finance, banking, and asset
securitization. He has successfully started and built two financial
services companies, as well as managed the sale and divestiture of a large
national mortgage company. His corporate banking experience includes
senior and subordinated debt facilities, structured finance, and commercial real
estate. Mr. Sidley is currently a Senior Managing Director at
Aequitas Capital Management, Inc., which is the manager of a shareholder of the
Company. Mr. Sidley has a B.S. degree in Business Administration from
Portland State University and an M.B.A. with High Honors in Finance from Boston
University.
On December 30, 2009, Brian A. Oliver,
45, was appointed Secretary of the Company and of Moore. Brian
Oliver is the Executive Vice President of Aequitas Capital Management, Inc., and
spent over 15 years in corporate banking, prior to joining Aequitas in 1997,
with particular expertise in financing middle-market companies in a wide variety
of industries. His experience includes consulting and refinancing for distressed
or high-growth companies; structuring acquisition financing for leveraged
management buyouts, real estate transactions, and structuring working capital
and equipment loans. He became an Aequitas shareholder in 1999. Mr.
Oliver has a B.S. in Business from Oregon State University with an emphasis in
Finance and a minor in Economics. He serves on the boards of both the Austin
Entrepreneurship Program at Oregon State University, and Adelante Community
Development Corporation, a non-profit organization focused on affordable housing
development for the Latino and other low income communities.
On December 30, 2009, Patricia J.
Brown, 51, was appointed Chief Financial Officer of the Company and of
Moore. Ms. Brown is the Senior Vice President of Finance for Aequitas
Capital Management, Inc. Ms. Brown served 12 years with The Standard, most
recently as the Vice President of Information Technology. Prior to
The Standard, Ms. Brown spent 11 years at Deloitte &
Touche. She previously was appointed by the Governor of Oregon
and served on the Board of the Oregon Public Employees Retirement System for
seven years, where her final position was Vice Chair. Ms. Brown holds
a B.S. degree with honors in Business Administration from Oregon State
University, she is a Certified Public Accountant, and she is a Fellow of the
Life Management Institute.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in
Fiscal Year.
On December 30, 2009, the Company filed
an amendment to its Amended and Restated Articles of Incorporation, as amended,
to designate 1,200,000 shares of microHelix's authorized but unissued preferred
stock as Series D Preferred Stock.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits. The
following document is filed as an exhibit to this Form 8-K:
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3.1
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Articles
of Amendment effective December 30, 2009 to Amended and Restated Articles
of Incorporation, as amended, designating Series D Preferred
Stock
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10.1
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Contribution
Agreement dated December 30, 2009 between WS Technologies LLC and Aequitas
Capital Management, Inc.
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10.2
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Contribution
Agreement dated December 30, 2009 between WS Technologies LLC and
CarePayment, LLC
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10.3
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Contribution
Agreement dated December 30, 2009 between WS Technologies LLC and
microHelix, Inc.
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10.4
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Servicing
Agreement dated December 31, 2009 between WS Technologies LLC and
CarePayment, LLC
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10.5
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Royalty
Agreement dated December 31, 2009 between WS Technologies LLC and Aequitas
Capital Management, Inc.
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10.6
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Trademark
License Agreement dated December 31, 2009 between WS Technologies
LLC and Aequitas Holdings,
LLC
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10.7
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Administrative
Services Agreement dated December 31, 2009 between WS Technologies LLC and
Aequitas Capital Management,
Inc.
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10.8
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Redemption
Agreement dated December 31, 2009 between WS Technologies LLC and Aequitas
Capital Management, Inc.
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10.9
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Redemption
Agreement dated December 31, 2009 between WS Technologies LLC and
CarePayment, LLC
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10.10
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Sublease
Agreement dated December 31, 2009 between WS Technologies LLC and Aequitas
Capital Management, Inc.
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10.11
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First
Amendment to the Third Amended and Restated Promissory Note dated
December 31, 2009 between microHelix, Inc. and MH Financial
Associates, LLC
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10.12
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First
Amendment to Multiple Advance Promissory Note dated December 31,
2009 among microHelix, Inc., Moore Electronics, Inc. and Aequitas
Capital Management, Inc.
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10.13
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Investor
Rights Agreement dated December 31, 2009 between microHelix, Inc.,
Aequitas Capital Management, Inc. and CarePayment,
LLC
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10.14
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Form
of Warrant dated December 30, 2009 by microHelix, Inc. to WS Technologies,
LLC.
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10.15
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WS
Technologies LLC Operating Agreement dated December 30,
2009
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10.16
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Amended
and Restated Advisory Services Agreement dated December 31, 2009 between
microHelix, Inc. and Aequitas Capital Management,
Inc.
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8
SIGNATURES
Pursuant to the requirements of the
Securities and Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly
authorized.
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microHelix,
Inc.
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(Registrant)
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Date: January
6, 2010
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/s/
Thomas Sidley
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Thomas
Sidley
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President
and Chief Executive
Officer
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