8-K 1 f8k.htm MAIN DOCUMENT SECURITIES AND EXCHANGE COMMISSION




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: April 1, 2008


PACER HEALTH CORPORATION

(Exact Name of Registrant as Specified in Charter)



Florida

0-28729

11-3144463

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)


7759 N.W. 146th Street

Miami Lakes, Florida 33016

 (Address of principal executive offices)


(305) 828-7660

(Registrant's Executive Office Telephone Number)








MI-200859



ITEM 1.01.  ENTRY INTO MATERIAL DEFINITIVE AGREEMENT.

On April 1, 2008 (the “Transaction Date”), Pacer Health Corporation, a Florida corporation (the “Company”) entered into a Securities Purchase Agreement (the “SPA”) with YA Global Investments, L.P. (the “Investor”) pursuant to which the Company sold to the Investor, and the Investor purchased from the Company, up to Five Million Seven Hundred Eighty-Six Thousand Seventeen Dollars ($5,786,017) of secured convertible debentures (the “Debenture”), which shall be convertible into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) and a five (5) year warrant (the “Warrant”) to acquire up to Five Million Five Hundred Thousand (5,500,000) additional shares of Common Stock at an exercise price of $0.0001 per share, of which Million Seven Hundred Eighty-Six Thousand Seventeen Dollars ($5,786,017) was funded to the Company on the Transaction Date.  Copies of the SPA, the Debenture and the Warrant have been provided herewith.

The Debenture shall accrue interest at a rate equal to thirteen percent (13%) per annum and shall mature, unless extended by the holder in accordance with the terms of the Debenture, on April 1, 2012 (“Maturity Date”).  At any time after the Transaction Date, the Investor shall be entitled to convert any portion of the outstanding and unpaid principal and accrued interest thereon into fully paid and non-assessable shares of Common Stock at a price equal to the lesser of $0.02 or eighty percent (80%) of the lowest volume weighted average price of the Common Stock during the twenty (20) trading days immediately preceding each conversion date.  The Company shall not affect any conversion, and the Investor shall not have the right to convert any portion of the Debenture to the extent that after giving effect to such conversion, the Investor (together with the Investor’s affiliates) would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion.  The Company shall pay an amount equal to the principal amount being redeemed plus a redemption premium equal to fifteen percent (15%) of the principal amount being redeemed, and accrued interest.  

In accordance with the terms of the SPA and the Debenture, as long as the Debenture remains outstanding: (a) the Company, and each of its subsidiaries, must obtain the Investor’s consent to (i) amend any of its charter documents to the detriment of the Investor, (ii) repay or acquire shares of its Common Stock or other equity securities except for the Underlying Shares (as defined in the Debenture) pursuant to the Transaction Documents (as defined in the Debenture), (iii) issue or sell shares of Common Stock or preferred stock without consideration or for a consideration per share less than the bid price of the Common Stock determined immediately prior to its issuance, (iv) issue any preferred stock, warrant, option, right, contract, call, or other security or instrument granting the holder thereof the right to acquire Common Stock without consideration or for a consideration less than such Common Stock’s bid price determined immediately prior to it’s issuance, (v) enter into any security instrument granting the holder a security interest in any and all assets of the Company, or (vi) file any registration statement on Form S-8; (b) the Company shall not merge, reorganize, restructure, consolidate, or sell all or substantially all of the Company’s assets (each such transaction, an “Organizational Change”) unless, prior to such Organizational Change, the Company obtains the written consent of the Investor; and (c) neither the Company nor its subsidiaries shall enter into, amend, modify or supplement any agreement with any of its officers, directors, persons who were officers or directors at any time during the previous two (2) years, stockholders who beneficially own five percent (5%) or more of the Common Stock, or Affiliates (as defined in the Debenture) or with any individual related by blood, marriage, or adoption to any such individual or with any entity in which any such entity or individual owns a five percent (5%) or more beneficial interest (each a “Related Party”), except for (i) employment arrangements and benefit programs, (ii) any investment in an Affiliate of the Company,  (iii) any agreement, transaction, commitment, or arrangement on an arms-length basis on terms no less favorable than terms which would have been obtainable from a person other than such Related Party, or (iv) any agreement which is approved by a majority of the disinterested directors of the Company (for purposes hereof, any director who is also an officer of the Company or its subsidiaries shall not be such a disinterested director).

In connection with the SPA, the Company placed into escrow Three Hundred Thousand Dollars ($300,000) directly from the proceeds of the closing (collectively, the “Monitoring Fees” and as deposited into escrow, the “Escrow Funds”) which shall be used to compensate Yorkville Advisors LLC (“Investment Manager”) for monitoring and managing the purchase and investment made by the Investor, pursuant to the Investment Manager’s existing advisory obligations to the Investor.  The Company, Investment Manager, and the Investor entered into an Escrow Agreement, dated the Transaction Date (the “Escrow Agreement”) appointing David Gonzalez, Esq. as escrow agent (the “Escrow Agent”) to hold the Escrow Funds and to periodically disburse portions of such Escrow Funds to the Investment Manager from escrow in accordance with the terms of the Escrow Agreement.  The Investment Manager shall periodically receive portions of the Escrow Funds in accordance with the Escrow Agreement until either: (1) the Escrow Funds shall have been fully disbursed pursuant the Escrow Agreement or (2) the securities shall have been Fully Retired.  “Fully Retired” means that the Investor shall have fully disposed of all the securities issued or issuable under the SPA, shall no longer have any investment in, or ownership of, any of the securities, all amounts owed to the Investor under the Transaction Documents (as defined in the SPA) shall have been paid, and the Transaction Documents shall have been terminated.  When the Securities are Fully Retired, the remaining Escrow Funds shall be returned to the Company or otherwise disbursed in accordance with the Escrow Agreement.  A copy of the Escrow Agreement has been provided herewith.

The Company paid a nonrefundable structuring and due diligence fee to the Investment Manager equal to Twenty-Five Thousand Dollars ($25,000) directly from the proceeds of the closing.  

Pursuant to the SPA, within sixty (60) days from the Transaction Date, the Company shall reserve for issuance to the Investor Three Hundred Thirty Million (330,000,000) shares for issuance upon conversion by the Investor of the Debentures and exercise of the Warrant by the Investor.  

In connection with the SPA, on the Transaction Date, the Company and the Investor executed and delivered the Registration Rights Agreement (“RRA”) pursuant to which the Company shall provide certain registration rights to Investor with respect to the Registrable Securities (as defined in the RRA) under the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder, and applicable state securities laws.  Specifically, the Company shall file with the SEC a Registration Statement within thirty (30) days following receipt of or written demand from the Investor requesting the filing of a Registration Statement.  A copy of the RRA has been provided herewith.

The Debenture is secured by (i) a security interest in all of the assets of the Company and of each of the Company's subsidiaries as evidenced by that certain Amended and Restated Security Agreement, dated the Transaction Date, by and among the Company, the Investor and each of the Company’s subsidiaries made a party thereto (the “Security Agreement”).  A copy of the Security Agreement has been provided herewith.  

In connection with the SPA, the Company, the Investor, Computershare Trust Company, N.A., as transfer agent and David Gonzalez, Esq. executed those certain Irrevocable Transfer Agent Instructions, dated the Transaction Date, a copy of which has been provided herewith.  

ITEM 3.02.  UNREGISTERED SALES OF EQUITY SECURITIES

See Item 1.01 herein above.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(a)

Not applicable.


(b)

Not applicable.


(c)

Not applicable.


(d)

Exhibit No. Description:


EXHIBIT

DESCRIPTION

LOCATION

Exhibit 10.1

Securities Purchase Agreement, dated April 1, 2008, by and between the Company and YA Global Investments, L.P.

Provided herewith

Exhibit 10.2

Debenture, dated April 1, 2008, issued by the Company to YA Global Investments, L.P.

Provided herewith

Exhibit 10.3

Warrant, dated April 1, 2008, issued by the Company to YA Global Investments, L.P.

Provided herewith

Exhibit 10.4

Amended and Restated Security Agreement, dated April 1, 2008, by and among the Company, the Company’s subsidiaries made a party thereto and YA Global Investments, L.P.

Provided herewith

Exhibit 10.5

Registration Rights Agreement, dated April 1, 2008, by and between the Company and YA Global Investments, L.P.

Provided herewith

Exhibit 10.6

Irrevocable Transfer Agent Instructions, dated April 1, 2008, by and among the Company, YA Global Investments, L.P., David Gonzalez, Esq. and Computershare Trust Company, N.A.,  as transfer agent

Provided herewith

Exhibit 10.7

Escrow Agreement, dated April 1, 2008, by and among the Company, Yorkville Advisors LLC, YA Global Investments, L.P. and David Gonzalez, Esq., as escrow agent

Provided herewith




SIGNATURES

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

Date:

April 8, 2008

PACER HEALTH CORPORATION

 

 

 

By:

/s/ Rainier Gonzalez

 

Name:

Rainier Gonzalez

 

Its:

President and Chief Executive Officer