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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): October 15, 2006
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))
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Section 1 Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement
On March 16, 2005, Brantley Partners IV, L.P. ("Brantley IV") loaned
Orion HealthCorp, Inc. (the "Company") an aggregate of $1,025,000 (the
"First Loan"). On June 1, 2005, the Company executed a convertible
subordinated promissory note in the principal amount of $1,025,000
(the "First Note") payable to Brantley IV to evidence the terms of the
First Loan. The material terms of the First Note are as follows: (i)
the First Note is unsecured; (ii) the First Note is subordinate to the
Company's outstanding loan from CIT Healthcare, LLC ("CIT") and other
indebtedness for monies borrowed, and ranks pari passu with general
unsecured trade liabilities; (iii) principal and interest on the First
Note is due in a lump sum on April 19, 2006 (the "First Note Maturity
Date"); (iv) the interest on the First Note accrues from and after
March 16, 2005, at a per annum rate equal to nine percent (9.0%) and
is non-compounding; (v) if an event of default occurs and is
continuing, Brantley IV, by notice to the Company, may declare the
principal of the First Note to be due and immediately payable; and
(vi) on or after the First Note Maturity Date, Brantley IV, at its
option, may convert all or a portion of the outstanding principal and
interest due of the First Note into shares of Class A Common Stock of
the Company at a price per share equal to $1.042825 (the "First Note
Conversion Price"). The number of shares of Class A Common Stock to be
issued upon conversion of the First Note shall be equal to the number
obtained by dividing (x) the aggregate amount of principal and
interest to be converted by (y) the First Note Conversion Price (as
defined above); provided, however, the number of shares to be issued
upon conversion of the First Note shall not exceed the lesser of: (i)
1,159,830 shares of Class A Common Stock, or (ii) 16.3% of the then
outstanding Class A Common Stock. As of October 15, 2006, if Brantley
IV were to convert the First Note, the Company would have to issue
1,124,937 shares of Class A Common Stock. On May 9, 2006, Brantley IV
and the Company executed an amendment to the First Note (the "First
and Second Note Amendment") extending the First Note Maturity Date to
August 15, 2006. On August 8, 2006, Brantley IV and the Company
executed a second amendment to the First Note (the "First and Second
Note Second Amendment") extending the First Note Maturity Date to
October 15, 2006.
On October 15, 2006, Brantley IV and the Company executed a second
amendment to the First Note (the "First and Second Note Third
Amendment") extending the First Note Maturity Date to November 30,
2006. A copy of the First and Second Note Third Amendment is attached
hereto as Exhibit 10.1.
On April 19, 2005, Brantley IV loaned the Company an additional
$225,000 (the "Second Loan"). On June 1, 2005, the Company executed a
convertible subordinated promissory note in the principal amount of
$225,000 (the "Second Note") payable to Brantley IV to evidence the
terms of the Second Loan. The material terms of the Second Note are as
follows: (i) the Second Note is unsecured; (ii) the Second Note is
subordinate to the Company's outstanding loan from CIT and other
indebtedness for monies borrowed, and ranks pari passu with general
unsecured trade liabilities; (iii) principal and interest on the
Second Note is due in a lump sum on April 19, 2006 (the "Second Note
Maturity Date"); (iv) the interest on the Second Note accrues from and
after April 19, 2005, at a per annum rate equal to nine percent (9.0%)
and is non-compounding; (v) if an event of default occurs and is
continuing, Brantley IV, by notice to the Company, may declare the
principal of the Second Note to be due and immediately payable; and
(vi) on or after the Second Note Maturity Date, Brantley IV, at its
option, may convert all or a portion of the outstanding principal and
interest due of the Second Note into shares of Class A Common Stock of
the Company at a price per share equal to $1.042825 (the "Second Note
Conversion Price"). The number of shares of Class A Common Stock to be
issued upon conversion of the Second Note shall be equal to the number
obtained by dividing (x) the aggregate amount of principal and
interest to be converted by (y) the Second Note Conversion Price (as
defined above); provided, however, the number of shares to be issued
upon conversion of the Second Note shall not exceed the lesser of: (i)
254,597 shares of Class A Common Stock, or (ii) 3.6% of the then
outstanding Class A Common Stock. As of October 15, 2006, if Brantley
IV were to convert the Second Note, the Company would have to issue
245,103 shares of Class A Common Stock. On May 9, 2006, Brantley IV
and the Company executed the First and Second Note Amendment extending
the Second Note Maturity Date to August 15, 2006. On August 8, 2006,
Brantley IV and the Company executed the First and Second Note Second
Amendment extending the Second Note Maturity Date to October 15, 2006.
On October 15, 2006, Brantley IV and the Company executed the First
and Second Note Third Amendment extending the Second Note Maturity
Date to November 30, 2006.
Section 9 Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(d) Exhibits - The following exhibits are furnished as part of this current
report:
Exhibit Description
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10.1 Third Amendment to Convertible Subordinated Promissory Notes, dated as
of October 15, 2006, by and between Orion HealthCorp, Inc. and
Brantley Partners IV, L.P.
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: October 19, 2006
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
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10.1 Third Amendment to Convertible Subordinated Promissory Notes, dated as
of October 15, 2006, by and between Orion HealthCorp, Inc. and
Brantley Partners IV, L.P.