Item 1.01 Results of Operations and Financial Condition.
Term Sheet Related to the Sale of 8% Convertible Preferred Stock
On
The obligation of the Company and H.I.G. to consummate the Private Placement
contemplated by the Term Sheet is subject to (i) the execution of definitive
documentation consistent with the Term Sheet that is reasonably acceptable to
each party and (ii) Nasdaq's review and effective approval of the Term Sheet and
the related listing of additional shares notification form, subject to a notice
of official listing with respect to the shares of the Company's common stock,
par value
After the date that is twenty days following
Dividend Rights
Dividends will initially accrue on the Preferred Stock daily at 8% per annum on
the Stated Value per share and compound semiannually, payable in kind until the
second anniversary of the closing date of the Private Placement (the "Closing
Date") on
Put Right
At any time on or after the sixth anniversary of the Closing Date, holders of the Preferred Stock will have the right to cause the Company to repurchase all or any portion of the Preferred Stock in cash at an amount equal to the greater of (i) 135% of the Accrued Value per share on such repurchase date (the "Repurchase Date"), plus accrued and unpaid dividends that have not yet been added to the Accrued Value and (ii) the amount per share that would be payable on an as-converted basis at the then-current Accrued Value. Notwithstanding the foregoing, the Company shall not be required to repurchase any shares of Preferred Stock to the extent the Company does not have legally available funds to effect such repurchase; provided, that if the Company fails to repurchase the Preferred Stock when required for any reason, then beginning on the Repurchase Date the dividend rate will increase 200 basis points on each semiannual compounding date until the repurchase is effected in full. "Accrued Value" means the sum of the Stated Value per share plus all accrued payment in kind dividends.
Redemption
At any time on or after the sixth anniversary of the Closing Date, the Company will have the right (but not the obligation) to redeem out of legally available funds and for cash consideration all (but not less than all) of the Preferred Stock upon 60 days prior written notice at an amount equal to the greater of (i) 135% of the Accrued Value per share as of the redemption date, plus accrued and unpaid dividends that have not yet been added to the Accrued Value and (ii) the amount per share that would be payable on an as-converted basis at the then-current Accrued Value.
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Conversion Rights
The Preferred Stock will be convertible, at any time, into Common Stock at a
conversion rate equal to (i) the Accrued Value of the Preferred Stock, (ii)
divided by
Further, on the Test Date, if the volume-weighted average price per share of
Common Stock for the 20 consecutive trading day period ending on the day prior
to the Test Date (the "Test Price")) is in excess of 160% of then-current
Conversion Price, then on the Test Date, the Conversion Price will be adjusted
to a price per share that would result in H.I.G. only receiving (i) 100% of the
value up to 160% of the then-current Conversion Price and (ii) 33% beyond such
value; provided, that in no event will the adjusted Conversion Price pursuant to
this sentence be less than
Any conversion will be settled only in shares of Common Stock; provided, that, upon any conversion that would result in H.I.G. beneficially owning greater than 19.99% of the Common Stock outstanding as of the Closing Date, the excess, if any, of the conversion consideration otherwise payable upon such conversion shall be paid in cash, based on an amount per share of Common Stock equal to the last reported price per share of the Common Stock on the trading day immediately preceding the conversion date.
Voting Rights
The Preferred Stock will vote on an as-converted basis and will vote together with Common Stock as a single class (subject to certain Nasdaq voting limitations, if applicable).
Rights in the Event of Change of Control
In the event of (i) any person or group (other than H.I.G. and its affiliates)
acquiring more than 50% of the voting power of the Company's voting equity, or
(ii) the sale, transfer, conveyance, lease, exclusive license or other
disposition of all or substantially all of the consolidated assets of the
Optional Repurchase in Liquidation
In the event of any voluntary or involuntary liquidation, winding up or dissolution of the Company (other than in connection with a Change of Control as set forth above), the holders of the Preferred Stock will have the right to cause the Company to repurchase, out of legally available funds, all or any portion of the Preferred Stock in cash at an amount per share equal to the greater of (a) the Accrued Value on an as-converted basis determined as of immediately prior to such liquidation,
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winding up or dissolution and (b) the Accrued Value, plus accrued and unpaid dividends that have not yet been added to the Accrued Value.
Mandatory Conversion of the Preferred Stock
At any time on or after the third anniversary of the Closing Date, if the . . .
Item 7.01 Regulation FD Disclosure
On
The information contained in this Item 7.01 and in Exhibit 99.1 attached hereto
are being furnished to the
Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 99.1 Press Release ofeHealth, Inc. datedJanuary 29, 2021
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