Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 11, 2011
American BioCare, Inc.
(Exact Name of Registrant As Specified In Charter)
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Nevada
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0-27775
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90-0263041
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(State or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(IRS Employee Identification No.)
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101 West Big Beaver Road
Suite 1400
Troy, MI 48084
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(Address of Principal Executive Offices)
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(248) 275-1440
(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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Section 2 – Financial Information
Item 2.01 Completion of Acquisition or Disposition of Assets.
In September, 2010, Registrant entered into an agreement to acquire all of the issued and outstanding stock of Care Centers of Tennessee, Inc. and Care Choices II, Inc. from its shareholders for total consideration of $3,750,000 payable in cash, notes and common stock of Registrant. The original agreement called for a closing on or before November 15, 2010. On December 28, 2010, Registrant and the shareholders of Care Centers of Tennessee, Inc. and Care Choices II, Inc. entered into a First Addendum to Share Purchase Agreement modifying the terms of payment under the agreement. In March, 2011, Registrant and the shareholders of Care Centers of Tennessee, Inc. and Care Choices II, Inc. entered into a Second Addendum to Share Purchase Agreement modifying the terms of payment under the agreement but otherwise continuing the material terms of the original agreement. On April 11, 2011, the Registrant completed the acquisition through its wholly-owned entity for the acquisition, CC Tennessee Holding, LLC, a Nevada limited liability company in which Registrant is the sole member. .
Care Centers of Tennessee, Inc. and Care Choices II, Inc. were established in 2005 and are based in the Knoxville, TN, area. Both are home healthcare businesses which provide health services, including skilled nursing (RN and LPN); medical residential care; medical residential support; therapy (PT, PTA, OT, COTA and Speech); Certified Nursing Assistant (Home Health Aide) services; personal assistant and personal care attendant services; and homemaker, companion, respite and sitter services. Current management of the target will remain in place post-acquisition and has employment agreements to that effect. Management believes this entity is in a unique position in its marketplace due to its existing licensing, contracts, experience and operating history. Additionally, competition in this particular niche market is limited due to the rigorous application, licensing, and contracting procedures, quality assurance controls, and the expensive set up and establishment costs. The current agreements between the sellers and the Company established a purchase price of $3,750,000. The Sellers received $1,500,000 cash at closing, as well as notes in Care Centers of Tennessee, Inc. in the amounts of $750,000 and $1,250,000. Additionally, the Sellers will receive $250,000 Series A shares in the Company released in three annual tranches. Both the equity and the second notes are subject to adjustment for achievement of various performance criteria.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
In April, 2011, Registrant entered into an agreement to establish a banking relationship with Citizens Bank of Michigan regarding debt financing for the Care Centers of Tennessee, Inc. and Care Choices II, Inc. acquisitions. The debt financing consists of a $400,000 364 day renewable revolving line of credit and a $1,500,000 36 month straight line maturity term loan.
In connection with the debt financing, Registrant has given Citizens a first priority perfected security interest in all present and future assets of Registrant and Care Centers of Tennessee, Inc., including, without limitation, cash, accounts receivable, inventory, equipment, furniture, fixtures, contract rights, license rights, operating rights, and general intangibles. In addition, a pledge of stock from Care Choices of Tennessee, Inc. was provided.
Registrant, Citizens and the former owners of Care Choices entered into a subordination agreement and inter-creditor agreement whereby the payments of principal and interest on the notes to the former owners of Care Choices will be allowed so long as no event of default has or will occur as a result of making said payments.
The line of credit and the term loan are both subject to customary various covenants, including financial. The interest rate on both the term loan and the line of credit are 1 month Libor (currently approximately .25%) plus 550 basis points.
Item 9.01 Financial Statements and Exhibits.
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(a)
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Financial statements of businesses acquired.
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Audited financial statements for Care Centers of Tennessee and Care Choices II, Inc. for the year ended December 31, 2010 and 2009 are attached as Exhibits 99.1 and 99.2 to this Current Report. These audited financial statements have been audited by the independent accounting firm for Care Centers of Tennessee, Inc. and Care Choices II, Inc. and have neither been audited by nor reviewed by the independent accounting firm for Registrant. No adjustments have been made to these financial statements for non-recurring items as a result of the acquisitions by Registrant in April, 2011.
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(b)
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Pro Forma financial information.
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The pro-forma consolidated balance sheet at December 31, 2010 and 2009 of American BioCare, Inc., Care Centers of Tennessee, Inc. and Care Choices II, Inc. and the pro-forma consolidated income statement for the years ended December 31, 2010 and for 2009 for American BioCare, Inc., Care Centers of Tennessee, Inc. and Care Choices II, Inc. are attached as Exhibit 99.3 to this Current Report. These pro forma consolidated financial statements have been prepared on the assumption that the acquisition of Care Centers of Tennessee, Inc. and Care Choices II, Inc. occurred at the beginning of the prior financial year of Registrant, January 1, 2010, although the actual closing occurred in April 2100, and have neither been audited nor reviewed by the independent accounting firm for Registrant. No adjustments have been made to the financial statements of Care Centers of Tennessee, Inc. and Care Choices II, Inc. for non-recurring items as a result of the acquisitions by Registrant in April, 2011.
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(c)
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Not applicable
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(d) Exhibits
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10.1*
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Loan and Security Agreement dated April 11, 2011 between Citizens Bank, as Lender, Care Centers of Tennessee, Inc., and CC Tennessee Holdings, LLC.
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10.2*
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Secured Promissory Note for $1,500,000 dated April 11, 2011 in favor of Citizens Bank executed by Care Centers of Tennessee, Inc., and CC Tennessee Holdings, LLC.
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10.3*
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Secured Revolving Line of Credit Note for $400,000 dated April 11, 2011 in favor of Citizens Bank executed by Care Centers of Tennessee, Inc., and CC Tennessee Holdings, LLC.
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10.4*
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Securities Pledge Agreement dated April 11, 2011 by CC Tennessee Holdings, LLC in favor of Citizens Bank.
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10.5*
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Guaranty by American BioCare, Inc. dated April 11, 2011.
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10.6*
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Securities Pledge Agreement dated April 11, 2011 by American BioCare, Inc. in favor of Citizens Bank.
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10.7*
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Intercreditor and Subordination Agreement dated April 11, 2011.
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10.8*
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Security Agreement
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99.1
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Audited Financial Statements of Care Centers of Tennessee, Inc. for the years ended December 31, 2010 and 2009, as required by Section 9.01(a).
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99.2
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Audited Financial Statements of Care Choices II, Inc. for the years ended December 31, 2010 and 2009, as required by Section 9.01(a).
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99.3
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Pro-forma consolidated balance sheet at December 31, 2010 and 2009 of American BioCare, Inc., Care Centers of Tennessee, Inc. and Care Choices II, Inc. and pro-forma consolidated income statement for the years ended December 31, 2010 and 2009 for American BioCare, Inc., Care Centers of Tennessee, Inc. and Care Choices II, Inc.
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*Filed as an Exhibit to Form 8-K filed on April 15, 2011
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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.
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AMERICAN BIOCARE, INC.
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Dated: June 21, 2011
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By:
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/s/ Gary D. Lewis
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Gary D. Lewis
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Chief Executive Officer
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