Item 1. Security and Issuer
This statement relates to the common stock, par value $0.001 per share (the “Common Stock”), of Vertical Health Solutions, Inc., a Florida corporation (the “Issuer”). The Issuer’s principle executive offices are located at 7760 France Avenue South, 11th Floor, Minneapolis, Minnesota 55435.
Item 2. Identity and Background
This statement is being filed on behalf of Christopher Brown. The business address for Dr. Brown is 16902 Harbor Master Cove, Cornelius, NC 28031. Dr. Brown’s primary occupation is an oral surgeon.
During the five years prior to the date hereof, Dr. Brown has not been convicted in a criminal proceeding or been a party to a civil proceeding ending in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
Dr. Brown acquired beneficial ownership of 486,363 shares of Common Stock of the Issuer pursuant to the Merger described in Item 4 below.
Item 4. Purpose of Transaction
On February 1, 2011, the Issuer, and its newly-formed subsidiary, Vertical HS Acquisition Corp., a Delaware corporation (“Merger Sub”) entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among, OnPoint Medical Diagnostics, Inc., a privately-held Minnesota corporation (“OnPoint”), on the one hand, and the Issuer and Merger Sub, on the other hand. Pursuant to the Merger Agreement, Merger Sub, which the Issuer had incorporated for the purpose of completing the transaction, merged into OnPoint (the “Merger”) on April 15, 2011 (the “Closing” or the “Closing Date”) with OnPoint continuing as the surviving entity in the Merger.
As a result of the Merger, OnPoint became a wholly-owned subsidiary of the Issuer. After receiving the requisite approval of the stockholders of OnPoint pursuant to a Written Consent and Waiver of Stockholders (the “Written Consent”), the Certificate of Merger was filed with the State of Minnesota and the State of Delaware on April 15, 2011, at which time the Merger was deemed effective (the “Effective Time”). At the Effective Time, each share of capital stock of OnPoint was converted into the right to receive one share of Common Stock of the Issuer. In addition, each outstanding convertible note, option and warrant to acquire shares of capital stock of OnPoint became a convertible note, option or warrant convertible or exercisable into shares of Common Stock at the same conversion or exercise price.
Immediately following the Merger, the Issuer owned 100% of the outstanding capital stock of OnPoint. In connection with the Merger, the Issuer issued an aggregate of 7,143,113 shares of Common Stock, after taking into account the shares of common stock, par value $0.01 per share, of OnPoint (the “OnPoint Stock”), which resulted in a change in control of the Issuer’s ownership, management and board of directors (the “Board of Directors”). Of the 7,143,113 shares of Common Stock to be issued to shareholders of OnPoint at the Effective Time of the Merger, 1,000,000 shares of Common Stock (the “Escrow Shares”) were delivered to Private Bank Minnesota (the “Escrow Agent”) and held in escrow pursuant to the Merger Agreement and the terms of the share escrow agreement, dated April 15, 2011, among the Escrow Agent, OnPoint, and the Issuer (the “Escrow Agreement”). The Escrow Shares will be disbursed to the shareholders of OnPoint upon receipt by the Issuer of an aggregate of $1,000,000 in equity financing (the “Equity Release Amount”); provided, the Equity Release Amount is received on or before December 31, 2011. If the Equity Release Amount is received on or before December 31, 2011, the shares of Common Stock held in the Escrow Fund shall be distributed to the shareholders of OnPoint pro rata based on such shareholders percentage ownership immediately prior to the Effective Time. If the Equity Release Amount is not received on or before December 31, 2011, the Escrow Shares shall be released by the Escrow Agent to the Issuer on January 1, 2012 and shall thereafter be cancelled by VHS.
Prior to the Merger, OnPoint had adopted the 2011 Omnibus Incentive Compensation Plan (the “2011 Stock Plan”) providing for the issuance of up to 1,600,000 shares of its common stock and had issued from such plan options exercisable into 750,000 shares of its common stock. At the Effective Time, the Issuer adopted and assumed the 2011 Stock Plan. After giving effect to the Merger, outstanding options to purchase 750,000 shares of OnPoint common stock under the 2011 Stock Plan have become outstanding options to purchase 750,000 shares of Common Stock under the 2011 Stock Plan.
Also, the Issuer plans on entering into a merger agreement with OnPoint whereby the Issuer will merge with and into OnPoint in order to (i) change the domicile of the Issuer from a Florida corporation to a Minnesota corporation, and (ii) change the name of the Issuer to “OnPoint Medical Diagnostics, Inc.”. This anticipated reorganization merger will occur as soon as reasonably practicable following the Merger.
Dr. Brown does not have any plans that would result in:
(a) The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer of any of its subsidiaries;
(d) Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board, except as described above;
(e) Any material change in the present capitalization (except in accordance with the Reorganization Merger described above) or dividend policy of the Issuer;
(f) Any other material change in the Issuer’s business or corporate structure including but not limited to, if the Issuer is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by section 13 of the Investment Company Act of 1940;
(g) Changes in the Issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
(a) Aggregate number and percentage of class beneficially owned:
(i) Dr. Brown owns 486,363 shares of Common Stock, constituting approximately 5.91% of the outstanding shares of Common Stock.
(b) Number of shares as to which such person has:
(i) Power to vote: 486,363
(ii) Power to dispose: 486,363
(c) Transactions during the past 60 days:
Other than as described in Items 3 and 4, during the past sixty days prior to the date hereof, Dr. Brown has not engaged in any transaction in the Issuer’s Common Stock.
(d) No person, other than Dr. Brown, is known to have the right to receive or the power to direct the receipt of dividends from, or any proceeds from the sale of, the shares of Common Stock beneficially owned by Dr. Brown.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
See Items 3 and 4 above. Additionally, the following agreements are attached hereto and/or incorporated by reference:
A copy of the Merger Agreement is incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Issuer on February 7, 2011.
A copy of the Escrow Agreement is incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed by the Issuer on April 21, 2011.
Except for the agreements and instruments described in the response to Items 3 and 4 and included in this Item 6, to the knowledge of Dr. Brown, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the Issuer, including but not limited to transfer or voting of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantors of profit, division of profit or loss or the giving or withholding of proxies.
Item 7. Material to Be Filed as Exhibits
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Exhibit
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Name
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A
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Agreement and Plan of Merger, dated February 1, 2011, by and among, Vertical Health Solutions, Inc., Vertical HS Acquisition Corp. and OnPoint Medical Diagnostics, Inc. Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Issuer on February 7, 2011.
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B
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Escrow Agreement, dated April 15, 2011, by and among Vertical Health Solutions, Inc., OnPoint Medical Diagnostics, Inc. and Private Bank Minnesota. Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed by the Issuer on April 21, 2011.
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