8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934.

Date of Report: June 14, 2023

(Date of earliest event reported)

ATI PHYSICAL THERAPY, INC.

(Exact name of registrant as specified in its charter)

DE	001-39439	85-1408039
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

790 Remington Boulevard Bolingbrook, Illinois	60440
(Address of principal executive offices)	(Zip Code)

(630) 296-2223

(Registrant’s telephone number, including area code)

(Former Name or Former Address, if changed since last report)

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:

☐
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))

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Class A Common Stock, $0.0001 par value	ATIP	New York Stock Exchange
Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share	ATIP WS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR.

(a) Amendment of Third Amended and Restated Certificate of Incorporation to Effect Reverse Stock Split

On June 14, 2023, ATI Physical Therapy, Inc. (the “Company”) filed a Certificate of Amendment to its Third Amended and Restated Certificate of Incorporation (the “Amendment”) with the Secretary of State of the State of Delaware to effect a one-for-fifty (1-for-50) reverse stock split (the “Reverse Stock Split”) of its outstanding Class A Common Stock, par value $0.0001 per share (the “Common Stock”). The Amendment became effective at 4:01 p.m. Eastern Time on June 14, 2023 (the “Effective Time”).

The Reverse Stock Split was approved by the Company’s stockholders at the Company’s 2023 Annual Meeting of Stockholders held on June 13, 2023, and subsequently approved by the Company’s board of directors on June 14, 2023. On June 14, 2023, the Company issued a press release (the “Press Release”) announcing the ratio of the Reverse Stock Split.  A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The Amendment provides that, at the Effective Time, every fifty (50) shares of the Company’s issued and outstanding Common Stock will automatically be combined into one issued and outstanding share of Common Stock, without any change in the authorized number of shares or the par value of the Common Stock. The Reverse Stock Split will affect all shares of the Company’s Common Stock outstanding immediately prior to the Effective Time. As a result of the Reverse Stock Split, proportionate adjustments will be made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, warrants and shares of Common Stock subject to vesting. In addition, the number of shares reserved for issuance under the Company’s equity compensation plan immediately prior to the Effective Time will be reduced proportionately.

No fractional shares will be issued as a result of the Reverse Stock Split and all fractional shares will be rounded up to the next whole share. The Reverse Stock Split will affect all stockholders proportionately and will not affect any stockholder’s percentage ownership of the Common Stock.

The Common Stock will begin trading on The New York Stock Exchange on a split-adjusted basis when the market opens on Thursday, June 15, 2023. The new CUSIP number for the Common Stock following the Reverse Stock Split is 00216W208.

Item 8.01 OTHER EVENTS.

The information set forth in Item 5.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 8.01.

The Company has a registration statement on Form S-3 (File No. 333-257801) and registration statements on Form S-8 (File Nos. 333-259320 and 333-270743) on file with the Securities and Exchange Commission (the “Commission”). Commission regulations permit the Company to incorporate by reference future filings made with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, prior to the termination of the offerings covered by registration statements filed on Form S-3 or Form S-8. The information incorporated by reference is considered to be part of the prospectus included within each of those registration statements. Information in this Item 8.01 of this Current Report on Form 8-K is therefore intended to be automatically incorporated by reference into each of the active registration statements listed above, thereby amending them. Pursuant to Rule 416(b) under the Securities Act, the amount of undistributed shares of Common Stock deemed to be covered by the effective registration statements of the Company described above are proportionately reduced as of the Effective Time to give effect to the Reverse Stock Split.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

Exhibit No.	Description
3.1	Certificate of Amendment to Third Amended and Restated Certificate of Incorporation.
99.1	Press Release.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: June 14, 2023	ATI Physical Therapy, Inc.
	By:	/s/ Joseph Jordan
	Name:	Joseph Jordan
	Title:	Chief Financial Officer

EX-3.1

Exhibit 3.1

CERTIFICATE OF AMENDMENT

to the

THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

of

ATI PHYSICAL THERAPY, INC.

ATI PHYSICAL THERAPY, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify as follows:

FIRST: The name of the Corporation is ATI Physical Therapy, Inc.

SECOND: The Corporation’s Third Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware (the “Secretary of State”) on June 13, 2023 (the “Certificate of Incorporation”).

THIRD: ARTICLE IV of the Corporation’s Certificate of Incorporation is hereby amended by inserting the following subsection (a) at the end of section 4.1:

(a) Reverse Stock Split. Effective as of 4:01 Eastern Time (the “Effective Time”) on June 14, 2023, the date this Certificate of Amendment to the Certificate of Incorporation is filed with the Secretary of State each Fifty (50) shares of the Corporation’s Common Stock issued and outstanding or held by the Corporation in treasury stock (including the number of shares of common stock issuable upon exercise or conversion of all issued and outstanding, options, warrants and convertible securities, including all options, shares outstanding and authorized for issuance under the Corporation's 2021 Equity Incentive Plan), immediately prior to the Effective Time (the “Prior Common Stock”) shall automatically without further action on the part of the Corporation or any holder of Common Stock be reclassified, combined, converted and changed into one (1) fully paid and nonassessable share of Common Stock and shall represent one share of Common Stock from and after the Effective Time (the “Reverse Stock Split”). The par value of the Common Stock following the Reverse Stock Split shall remain at $0.0001 per share. Each certificate that immediately prior to the Effective Time represented shares of Common Stock (“Old Certificates”) shall thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by the Old Certificate shall have been combined, subject to the elimination of fractional share interests as described below. Notwithstanding the foregoing, no fractional shares shall be issued to the holders of record of Prior Common Stock in connection with the Reverse Stock Split and, instead, each fractional share resulting from the Reverse Stock Split shall be automatically rounded up to the nearest whole number.

FOURTH: The Board of Directors and the stockholders of the Corporation have duly approved and adopted the foregoing amendment in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be duly adopted and executed in its corporate name and on its behalf by its duly authorized officer as of the 14^th day of June, 2023.

ATI PHYSICAL THERAPY, INC.

By:	/s/ Sharon Vitti
Name:	Sharon Vitti
Title:	Chief Executive Officer

[Signature Page to Amendment to Third Amended and Restated Certificate of Incorporation]

EX-99.1

Exhibit 99.1

BOLINGBROOK, Ill., June 14, 2023 /PRNewswire/ -- ATI Physical Therapy, Inc. (NYSE: ATIP) ("ATI" or the "Company"), a nationally recognized outpatient physical therapy provider in the United States, today announced that its Board of Directors has approved a one-for-fifty (1-for-50) reverse stock split (the “Reverse Stock Split”) of ATI’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”). The Reverse Stock Split was approved by ATI’s stockholders at a Meeting of Stockholders held virtually on June 13, 2023. The Reverse Stock Split will become effective at 4:01 p.m. Eastern Time on June 14, 2023, and the Class A Common Stock will open for trading on The New York Stock Exchange (the “NYSE”) on a reverse split-adjusted basis on June 15, 2023 under the existing trading symbol “ATIP.”  The Reverse Stock Split is intended to increase the market price per share of the Company’s Class A Common Stock to regain compliance with the minimum bid continued listing requirement of the NYSE.

The new CUSIP number for the Class A Common Stock following the Reverse Stock Split will be 00216W208 and the CUSIP number for ATI’s publicly traded warrants will remain unchanged. At the effective time of the Reverse Stock Split, every 50 shares of the Class A Common Stock either issued and outstanding or held as treasury stock will be automatically combined into one new share of Class A Common Stock. The total number of shares of Class A Common Stock authorized for issuance and the par value per share of the Class A Common Stock will remain unchanged at 450,000,000 and $0.0001, respectively.

As a result of the Reverse Stock Split, proportionate adjustments will be made to the number of shares of Class A Common Stock underlying ATI’s outstanding equity awards and the number of shares issuable under ATI’s equity incentive plans and certain existing agreements, as well as the exercise, grant and acquisition prices of such equity awards, as applicable. In addition, proportionate adjustments will be made to the number of shares of Class A Common Stock underlying ATI’s outstanding public warrants, resulting in 50 warrants becoming exercisable for one (1) share of Class A Common Stock at an exercise price of $575.00 per share.

No fractional shares will be issued as a result of the Reverse Stock Split. Where stockholders would otherwise be entitled to fractional shares as a result of the Reverse Stock Split because they hold a number of shares not evenly divisible by 50, such stockholders will automatically be entitled to an additional fraction of a share to round up to the next whole share of Class A Common Stock. The Reverse Stock Split affects all stockholders uniformly and will not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the Reverse Stock Split results in stockholders owning an additional share due to the fractional shares, as described above.

Continental Stock Transfer & Trust Company is acting as transfer and exchange agent for the Reverse Stock Split. Registered stockholders who hold shares of Class A Common Stock are not required to take any action to receive post-reverse split shares. Stockholders owning shares via a broker, bank, trust or other nominee will have their positions automatically adjusted to reflect the Reverse Stock Split, subject to such broker's particular processes, and will not be required to take any action in connection with the Reverse Stock Split.

Additional information about the Reverse Stock Split can be found in ATI’s definitive proxy statement filed with the Securities and Exchange Commission (the “SEC”) on May 1, 2023, which is available free of charge at the SEC’s website, www.sec.gov, and on ATI’s website at https://investors.atipt.com

About ATI Physical Therapy

At ATI Physical Therapy, we are passionate about potential. Every day, we restore it in our patients and activate it in our team members in our more than 900 locations in 24 states. With outcomes from more than 3 million unique patient cases, ATI is making strides in the industry by setting quality standards designed to deliver predictable outcomes for our patients with musculoskeletal (MSK) issues. ATI's offerings span across a broad spectrum for MSK-related issues. From preventative services in the workplace and athletic training support to outpatient clinical services and online physical therapy via our online platform, CONNECT™, a complete list of our service offerings can be found at ATIpt.com. ATI is based in Bolingbrook, Illinois.

Forward-Looking Statements

All statements other than statements of historical facts contained in this communication are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of the words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "project," "forecast," "predict," "potential," "seem," "seek," "future," "outlook," "target" or similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the impact of physical therapist attrition and ability to achieve and maintain clinical staffing levels and clinician productivity, anticipated visit and referral volumes and other factors on the Company's overall profitability, and estimates and forecasts of other financial and performance metrics and projections of market opportunity. These statements are based on various assumptions, whether or not identified in this communication, and on the current expectations of the Company's management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company.

These forward-looking statements are subject to a number of risks and uncertainties, including:

• our liquidity position raises substantial doubt about our ability to continue as a going concern;

• risks associated with liquidity and capital markets, including the Company's ability to generate sufficient cash flows, together with cash on hand, to run its business, cover liquidity and capital requirements and resolve substantial doubt about the Company's ability to continue as a going concern;

• our ability to meet financial covenants as required by our 2022 Credit Agreement;

• risks related to outstanding indebtedness and preferred stock, rising interest rates and potential increases in borrowing costs, compliance with associated covenants and provisions and the potential need to seek additional or alternative debt or capital financing in the future;

• risks related to the Company's ability to access additional financing or alternative options when needed;

• our dependence upon governmental and third-party private payors for reimbursement and that decreases in reimbursement rates, renegotiation or termination of payor contracts or unfavorable changes in payor, state and service mix may adversely affect our financial results;

• federal and state governments' continued efforts to contain growth in Medicaid expenditures, which could adversely affect the Company's revenue and profitability;

• payments that we receive from Medicare and Medicaid being subject to potential retroactive reduction;

• changes in Medicare rules and guidelines and reimbursement or failure of our clinics to maintain their Medicare certification and/or enrollment status;

• compliance with federal and state laws and regulations relating to the privacy of individually identifiable patient information, and associated fines and penalties for failure to comply;

• risks associated with public health crises, including COVID-19 (and any existing and future variants) and its direct and indirect impacts on the business, which could lead to a decline in visit volumes and referrals;

• risks related to the impact on our workforce of mandatory COVID-19 vaccination of employees;

• our inability to compete effectively in a competitive industry, subject to rapid technological change and cost inflation, including competition that could impact our effectiveness of strategies to improve patient referrals and our ability to identify, recruit and retain skilled physical therapists;

• our inability to maintain high levels of service and patient satisfaction;

• risks associated with the locations of our clinics, including the economies in which we operate, size and expected growth of our addressable markets, and the potential need to close clinics and incur closure costs;

• our dependence upon the cultivation and maintenance of relationships with customers, suppliers, physicians and other referral sources;

• the severity of climate change or the weather and natural disasters that can occur in the regions of the U.S. in which we operate, which could cause disruption to our business;

• risks associated with future acquisitions, which may use significant resources, may be unsuccessful and could expose us to unforeseen liabilities;

• failure of third-party vendors, including customer service, technical and IT support providers and other outsourced professional service providers to adequately address customers' requests and meet Company requirements;

• risks associated with our reliance on IT infrastructure in critical areas of our operations including, but not limited to, cyber and other security threats;

• a security breach of our IT systems or our third-party vendors' IT systems may subject us to potential legal action and reputational harm and may result in a violation of the Health Insurance Portability and Accountability Act of 1996 or the Health Information Technology for Economic and Clinical Health Act;

• maintaining clients for which we perform management and other services, as a breach or termination of those contractual arrangements by such clients could cause operating results to be less than expected;

• our failure to maintain financial controls and processes over billing and collections or disputes with third-parties could have a significant negative impact on our financial condition and results of operations;

• our operations are subject to extensive regulation and macroeconomic uncertainty;

• our ability to meet revenue and earnings expectations;

• risks associated with applicable state laws regarding fee-splitting and professional corporation laws;

• inspections, reviews, audits and investigations under federal and state government programs and payor contracts that could have adverse findings that may negatively affect our business, including our results of operations, liquidity, financial condition and reputation;

• changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis;

• the outcome of any legal and regulatory matters, proceedings or investigations instituted against us or any of our directors or officers, and whether insurance coverage will be available and/or adequate to cover such matters or proceedings;

• our facilities face competition for experienced physical therapists and other clinical providers that may increase labor costs and reduce profitability;

• risks associated with our ability to attract and retain talented executives and employees amidst the impact of unfavorable labor market dynamics and wage inflation, including potential failure of steps being taken to reduce attrition of physical therapists and increase hiring of physical therapists;

• risk resulting from the IPO Warrants, Earnout Shares and Vesting Shares being accounted for as liabilities;

• further impairments of goodwill and other intangible assets, which represent a significant portion of our total assets, especially in view of the Company's recent market valuation;

• our inability to remediate the material weaknesses in internal control over financial reporting related to income taxes and to maintain effective internal control over financial reporting;

• costs related to operating as a public company; and

• risks associated with our ability to regain and sustain compliance with the listing requirements of our securities on the New York Stock Exchange ("NYSE").

If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements.

Investors should also review those factors discussed in the Company's amended S-1 registration statement filed with the SEC on April 12, 2022 under the heading "Risk Factors," our Form 10-K for the fiscal year ended December 31, 2022, the S-3 registration statement and amendments thereto dated August 10, 2022 and other documents filed, or to be filed, by ATI with the SEC. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can the Company assess the impact of all such risk factors on the business of the Company or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. Readers should not place undue reliance on forward-looking statements. The Company undertakes no obligations to publicly update or revise any forward-looking statements after the date they are made or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or otherwise, except as required by law.

In addition, statements of belief and similar statements reflect the beliefs and opinions of the Company on the relevant subject. These statements are based upon information available to the Company, as applicable, as of the date of this communication, and while the Company believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

Contacts:

Investors

Joanne Fong

SVP, Treasurer and Investor Relations

ATI Physical Therapy

investors@atipt.com

(630) 296-2222 x 7131

Media

Genesa Garbarino

Garbo Communications

genesa@garbo.agency

424-499-7025

Rob Manker

Director of Customer Marketing & Public Relations

ATI Physical Therapy

warren.manker@atipt.com

630-296-2222 ext. 7432

XML

Document and Entity Information	Jun. 14, 2023
Entity Listings [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jun. 14, 2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-39439
Entity Registrant Name	ATI PHYSICAL THERAPY, INC.
Entity Central Index Key	0001815849
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	85-1408039
Entity Address, Address Line One	790 Remington Boulevard
Entity Address, City or Town	Bolingbrook
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60440
City Area Code	630
Local Phone Number	296-2223
Title of 12(b) Security	Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share
Trading Symbol	ATIP WS
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Common Class A [Member]
Entity Listings [Line Items]
Title of 12(b) Security	Class A Common Stock, $0.0001 par value
Trading Symbol	ATIP
Security Exchange Name	NYSE