UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

CURRENT REPORT

FORM 8-K

Pursuant to Section 13 or 15(d) of the Securities Exchange Act

Date of Report (Date of Earliest Event Reported): February 10, 2016

Hanger, Inc.

(Exact name of registrant as specified in its charter)

10910 Domain Drive, Suite 300
Austin, Texas 78758

(Address of principal executive offices (zip code))

(512) 777-3800

(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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a - 12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13d-4(c))

Item 1.01                                           Entry into a Material Definitive Agreement.

On February 10, 2016, Hanger, Inc. (the “Company”) entered into an agreement that modified its Credit Agreement (the “Original Credit Agreement”) dated as of June 17, 2013 among the Company, the lenders from time to time party thereto and Bank of America, N.A., as agent (the “Agent”), as the same was previously amended by the First Amendment and Waiver, dated June 19, 2015 among the Company, the lenders party thereto and the Agent (the “First Amendment and Waiver”), the Second Amendment and Waiver, dated September 11, 2015 among the Company, the lenders party thereto and the Agent (the “Second Amendment and Waiver”), and the Third Amendment and Waiver, dated November 13, 2015 among the Company, the lenders party thereto and the Agent (the “Third Amendment and Waiver”; the Original Credit Agreement as amended by the First Amendment and Waiver, the Second Amendment and Waiver and the Third Amendment and Waiver, the “Credit Agreement”).  As described below, this agreement, which is called the Fourth Amendment and Waiver (the “Agreement”), waives defaults and events of default under the Credit Agreement and also modifies certain of the terms and covenants contained in the Credit Agreement, including by temporarily increasing the applicable interest rates, with some of the modifications terminating at such time as the Company meets various conditions described more fully below.

The Agreement was negotiated with the lenders and the Agent in connection with the Company’s failure to deliver to the lenders certain financial information and other materials for the periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, and September 30, 2015 (the “Prior Financial Information”) as required by the Third Amendment and Waiver.  The Agreement waives (a) the events of default under the Credit Agreement arising from the Company’s failure to deliver the Prior Financial Information to the Agent and (b) certain potential events of default arising from the Company’s anticipated failure to timely deliver certain financial information and other materials for the period ended December 31, 2015 (the “December 31, 2015 Financial Information” and, together with the Prior Financial Information, the “Financial Information”) to the Agent.  The Agreement also provides that the failure by the Company to deliver the Financial Information to the Agent on or before May 16, 2016 shall be an additional event of default under the Credit Agreement.

Until such time as the Company has delivered to the Agent (a) the Prior Financial Information demonstrating (i) that the Company would have been in compliance with the financial covenants in the Credit Agreement for the fiscal quarters ended September 30, 2014, December 31, 2014, March 31, 2015, and June 30, 2015 (giving retroactive effect to the amendments contained in the First Amendment and Waiver) and (ii) the correctness of a representation in the Third Amendment and Waiver regarding compliance by the Company with an adjusted leverage ratio as of the end of the fiscal quarter ended September 30, 2015, (b) the December 31, 2015 Financial Information, and (c) projections for each fiscal quarter remaining during the term of the Credit Agreement (through June 17, 2018) demonstrating that (assuming the projections are realized) the Company will be in compliance with the financial covenants in the Credit Agreement as of the end of each fiscal quarter remaining during the term of the Credit Agreement (clauses (a)-(c) are collectively referred to as the “Financial Information Requirements”), the following restrictions and provisions in addition to those set forth in the Credit Agreement shall apply: (x) the amount that the Company can borrow under the Credit Agreement in the form of revolving loans, swing line loans and/or letters of credit has been reduced from $146.3 million to $138 million, (y) certain baskets and exceptions to the restrictive covenants in the Credit Agreement have been reduced or eliminated, and (z) the Company will be required to deliver to the Agent monthly consolidated cash flow forecasts and reconciliation reports explaining the differences between the actual cash flows and the previously-delivered forecasts of cash flows.

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In addition to the restrictions and requirements noted above, until such time as (a) the Company has satisfied the Financial Information Requirements and (b) the Company has achieved a ratio (the “Leverage Ratio”) of (i) the principal amount of consolidated indebtedness minus the lesser of (1) $30,000,000 and (2) the consolidated aggregate amount of unrestricted cash and cash equivalents, to (ii) the consolidated net income before interest expense, taxes, depreciation and amortization expense, certain non-cash charges and certain other items (“EBITDA”), for the Company’s then most recently ended fiscal quarter, of less than or equal to 4.00:1.00, the applicable interest rate for loans under the Credit Agreement will be increased by 1.00%.

The Agreement also permanently amends certain provisions of the Credit Agreement.  The Agreement amends the definition of “Consolidated EBITDA” in the Credit Agreement to limit the amount of professional fees and expenses that may be added back to the calculation of the Company’s consolidated EBITDA (other than certain professional fees and expenses reimbursed by the Company and the subsidiary guarantors under the Credit Agreement in accordance with the Second Amendment and Waiver, the entire aggregate amount of which may be added back) to (i) for the period of four consecutive fiscal quarters ending on or prior to December 31, 2015, $22,000,000, (ii) for the period of four consecutive fiscal quarters ending on (1) March 31, 2016, $25,300,000, (2) June 30, 2016, $28,400,000, (3) September 30, 2016, $24,400,000, and (4) December 31, 2016, $18,000,000, and (iii) for any period of four consecutive fiscal quarters ending thereafter, 10.0% of the Company’s consolidated EBITDA.  The Agreement also amends the Leverage Ratio covenant in the Credit Agreement to limit the maximum permitted Leverage Ratio to be, as of the end of the Company’s fiscal quarter ending on (i) March 31, 2016, 4.35:1.00, (ii)  June 30, 2016, 4.50:1.00, (iii) September 30, 2016, 4.20:1.00, (iv) December 31, 2016, 4.10:1.00, and (v) any date thereafter, 4.00:1.00.

In connection with the entry into the Agreement, the Company will pay the Agent for the account of each consenting lender an amendment fee in an amount equal to 45 basis points of the outstanding principal amount of the term loan held by such consenting lender plus the amount of such lender’s revolving commitments.

The foregoing description of the Agreement is qualified in its entirety by reference to the Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K.

Disclosures About Forward-Looking Statements

This Form 8-K contains certain “forward-looking statements” relating to the Company. All statements, other than statements of historical fact included herein, are “forward-looking statements,” including statements regarding the timing of filing of, and the outcome of the Company’s work in connection with, completing certain financial statements and other financial data. These forward-looking statements are often identified by the use of forward-looking terminology such as “intends,” “expects” or similar expressions and involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks, and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this filing.  The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. These uncertainties include, but are not limited to, the risk that additional information may arise during the course of the Company’s ongoing accounting review that would require the Company to make additional adjustments or revisions to its estimates or financial statements and other financial data, to restate further its financial statements and other financial data for current or historical periods, or to identify additional material weaknesses; the time required to complete the financial statements and other financial data and accounting review;

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and the time required to prepare its periodic reports for filings with the Securities and Exchange Commission.  For additional information and risk factors that could affect the Company, see its Form 10-K for the year ended December 31, 2013 and its Form 10-Q for the quarter ended June 30, 2014 as well as the risk factor set forth in Item 8.01 of the Company’s Current Report on Form 8-K filed February 17, 2015, each as filed with the Securities and Exchange Commission. The information contained in this filing is made as of the date hereof, even if subsequently made available by the Company on its website or otherwise.

Item 9.01              Financial Statements and Exhibits.

(d) Exhibits.

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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.

HANGER, INC.

Dated:  February 10, 2016

EXHIBIT INDEX