UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 2, 2002
SURGICARE, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
001-16587 58-1597246
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(Commission File Number) (I.R.S. Employer Identification No.)
12727 Kimberly Lane, Suite 200
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(Address of principal executive offices, including zip code)
(713) 973-6675
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(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
ASPEN HEALTHCARE, INC. On December 2, 2002, SurgiCare, Inc. ("Company") entered
into a settlement agreement and mutual general release ("Settlement Agreement")
with the owners of Aspen Healthcare, Inc. (the "Sellers") whereby the parties
agreed to terminate the Stock Purchase Agreement dated May 16, 2002 ("SPA").
Pursuant to the Settlement Agreement, the Company and the Sellers agreed to
terminate the SPA and mutually release each other from all duties and
obligations under the SPA and from all liabilities and claims in connection with
the SPA and all business dealings between the parties. Furthermore, the Company
has agreed to the following:
(a) To allow the Sellers to retain all previously paid
"non-refundable" payments;
(b) To pay to the Sellers an additional $100,000;
(c) To redeem from the Seller 75,000 shares of Company common stock
at a price of $2.24 per share for an aggregate purchase price of
$168,000 per the original put agreement;
(d) To redeem from the Sellers an additional 16,400 shares of Company
common stock at a price of $2.24 per share for an aggregate
purchase price of $36,736, if the Sellers delivered such shares
by January 31, 2003;
(e) To amend warrants that entitled the Sellers to purchase an
aggregate of 136,786 shares of Company common stock, by reducing
the exercise price of such warrants to $0.32 per share; and
(f) To issue to the Sellers warrants to purchase an additional
200,000 shares at an exercise price of $0.32 per share, expiring
in December 2007.
PRIVATE PLACEMENT OFFERING. On or about December 11, 2002, the Company received
a $1 million equity investment from International Diversified Corporation, Ltd.
as part of the restructuring of the Series AA Preferred Stock with American
International Industries Inc. ("AII"). The investment was made via a private
placement, under which the investor purchased 2,439,024 of the company's common
stock at $0.41. The shares are restricted under Rule 144. The proceeds of the
financing are expected to be used for working capital purposes.
In connection with the equity investment, AII agreed to convert 300,000 shares
of Series AA Preferred Stock "Series AA") into 3,658,537 shares of SurgiCare
common stock. With respect to the balance of the 900,000 shares of Series AA,
the Company will file an amended Certificate of Designation which modifies the
terms of the Series AA as follows:
o No later than June 1, 2004, the Company shall have the option to
redeem 300,000 shares of Series AA for a payment of $1,500,000 or to
convert 300,000 shares of Series AA to a SurgiCare equivalent of
$1,500,000 calculated by dividing $1,500,000 by the average closing
price for the 20 previous trading days prior to a conversion, but no
less than $0.41 per share.
o No later than June 1, 2005, the Company shall have the option to
redeem 300,000 shares of Series AA for a payment of $1,500,000 or to
convert 300,000 shares of Series AA to a SurgiCare equivalent of
$1,500,000 calculated by dividing $1,500,000 by the average closing
price for the 20 previous trading days prior to a conversion, but no
less than $0.41 per share.
o No later than June 1, 2006, the Company shall have the option to
redeem 300,000 shares of Series AA for a payment of $1,500,000 or to
convert 300,000 shares of Series AA to a SurgiCare equivalent of
$1,500,000 calculated by dividing $1,500,000 by the average closing
price for the 20 previous trading days prior to a conversion, but no
less than $0.41 per share.
SAN JACINTO SURGERY CENTER. On or about December 17, 2002, the Company decided
not to pursue the acquisition of an additional 62% interest in the San Jacinto
Surgery Center, Ltd., a Texas limited partnership (the "San Jacinto Center").
The Company currently owns a 10% interest in the San Jacinto Center.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired. None.
(b) Pro forma financial information. None.
(c) Exhibits.
Exhibit Number Exhibit Description
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10.1 Settlement Agreement and Mutual General Release
Agreement between Surgicare, Inc., Thomas Yerden and
TLC Capital Corporation dated December 2, 2002.
10.2 Agreement between SurgiCare, Inc. and American
International Industries, Inc., Texas Real Estate
Enterprises, Inc., and MidCity Houston Properties,
Inc. dated December 3, 2002.
10.3 Amended Certificate of Designation, Powers,
Preferences and Rights of Series AA Preferred Stock,
par value $.001 per share
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.
SURGICARE, INC.
By: /s/ Keith LeBlanc
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Keith LeBlanc
Chief Executive Officer
DATE: January 29, 2003
EXHIBIT INDEX
Exhibit Number Description
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10.1 Settlement Agreement and Mutual General Release Agreement
between Surgicare, Inc., Thomas Yerden and TLC Capital
Corporation dated December 2, 2002.
10.2 Agreement between SurgiCare, Inc. and American
International Industries, Inc., Texas Real Estate
Enterprises, Inc., and MidCity Houston Properties, Inc.
dated December 3, 2002.
10.3 Amended Certificate of Designation, Powers, Preferences
and Rights of Series AA Preferred Stock, par value $.001
per share