THERAPEUTICSMD, INC. FILES (8-K/A) Disclosing Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Results of Operations and Financial Condition, Changes in Control or Registrant, Change in Directors or Principal Officers, Financial Statements and Exhibits
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Item 1.01 Entry into a Material Definitive Agreement.
On
In preparation of and prior to the closing of the Merger Agreement, the Company completed the following required corporate actions with an effective date of
· a reverse split of its outstanding shares of Common Stock on a ratio of 1 for 100 (the "Reverse Split"), · an increase of its authorized shares of Common Stock to 250,000,000, · a change in the name of the Company toTherapeuticsMD, Inc. , and · an amendment to the Company's Long Term Incentive Compensation Plan ("LTIP") to increase the authorized shares for issuance thereunder to 25,000,000.
The Merger Agreement was filed as an exhibit to the Current Report on Form 8-K filed with the
Item 2.01 Completion of Acquisition or Disposition of Assets.
AGREEMENT AND PLAN OF MERGER WITH VITAMEDMD, LLC
On
Corporate Actions Prior to Closing of Agreement
On
· A Reverse Split of the Company's 16,575,209 issued and outstanding shares of
Common Stock. As a result of the Reverse Split, each share of Common Stock outstanding on theJuly 28, 2011 (the "Record Date"), without any action on the part of the holder thereof, became one one-hundredth of a share of Common Stock. The Reverse Split decreased the number of outstanding shares of the Company's Common Stock by approximately 99% resulting in 165,856 shares outstanding after the Reverse Split. The effectuation of the Reverse Split did not result in a change in the relative equity position or voting power of the shareholders of the Company. 4
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· An increase in the Company's number of shares of Common Stock authorized for
issuance to 250,000,000.
· A change in the name of the Company to
· An amendment to the Company's LTIP to increase the shares authorized for
issuance thereunder to 25,000,000.
The effective date for the above-mentioned corporate actions was
Exchange of Securities
At the Effective Time, all outstanding membership units of VitaMed (the "Units") were exchanged for shares of the Company's Common Stock. In addition, all outstanding VitaMed options ("Options") and VitaMed warrants ("Warrants") were exchanged and converted into options and warrants for the purchase of the Company's Common Stock ("Company Options" and "Company Warrants"). All Units, Options and Warrants were exchanged on a pro-rata basis for shares of the Company's Common Stock which in the aggregate totaled 70,000,000 shares, resulting in a conversion ratio calculated by the sum of all outstanding Units, Options and Warrants divided by 70,000,000 (the "Conversion Ratio"). Pursuant to the Conversion Ratio, the Company will issue 58,407,331 shares of the Company's Common Stock in exchange for the outstanding Units and will reserve for issuance an aggregate of 10,365,281 shares issuable upon the exercise of the Company's Options. The Company assumed VitaMed warrants that were originally issued in conjunction with the sale of VitaMed Promissory Notes, and pursuant to the Conversion Ratio, will issue Company Warrants for the purchase of an aggregate of 613,718 shares of the Company's Common Stock. The Company also assumed VitaMed's obligation to subsequently issue warrants to affiliates in consideration for their guarantee of a bank loan for the benefit of VitaMed (the "Reserved Warrants"). Pursuant to the Conversion Ratio, the Reserved Warrants for the purchase of 613,710 shares of the Company's Common Stock will be issued to certain officers and directors of the Company once they are earned.
Aggregate Beneficial Ownership of Therapeutics' Common Stock After the Transaction
After giving effect to the Reverse Split, and taking into consideration the issuance of the 58,407,331 aforementioned shares in exchange for the Units, the number of shares of the Company's Common Stock issued and outstanding is 58,573,187 of which the members of VitaMed own approximately 99%.
All shares of the Company's Common Stock issued in exchange for the Units, and to be issued upon exercise of the Company Options and Warrants, are subject to a lock-up agreement for a period of eighteen (18) months from the Closing.
The aggregated beneficial ownership of the Company's shares of outstanding Common Stock on a fully diluted basis is as follows:
· The members who exchanged their Units in connection with the Merger acquired
an aggregate beneficial ownership of approximately ninety-nine percent (99%)
of the issued and outstanding shares of Common Stock of the Company; and
· Shareholders beneficially owning 100% of the shares of the Company's Common
Stock immediately prior to the consummation of the Transaction were diluted to an aggregate beneficial ownership of approximately one percent (1%) of the issued and outstanding shares of Common Stock of the Company. 5
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A discussion of beneficial ownership of the Company's directors, officers and principal shareholders is set forth herein at Security Ownership of Certain Beneficial Owners and Management. . . .
ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATION MAY BE MATERIALLY ADVERSELY AFFECTED. IN SUCH CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE AND INVESTORS IN OUR COMMON STOCK COULD LOSE ALL OR PART OF THEIR INVESTMENT.
Risks Related to VitaMed's Business and Industry
We have a limited operating history and have losses which we expect to continue into the future. There is no assurance our future operations will result in profitable revenues. If we cannot generate sufficient revenues to operate profitably, we may suspend or cease operations.
VitaMed was organized in
Through
· Further development and launching of our proprietary technology,
· acceptance of our products by physicians and consumers,
· our ability to negotiate satisfactory payment agreements with insurance
companies, and
· our ability to continue to manage satisfactory relationships with
manufacturers of our products.
Based upon current plans, we expect to incur operating losses in future periods because we expect to incur expenses which will exceed revenues for an unknown period of time. We can provide no assurance that we will be successful in generating sufficient revenues to support operations in the future. Failure to generate sufficient revenues may cause us to go out of business and you could lose your investment.
Based on our historical financials, there is uncertainty as to our ability to continue as a going concern.
In the event that we are unable to achieve or sustain profitability or are otherwise unable to secure external financing, we may not be able to meet our obligations as they come due, raising substantial doubts as to our ability to continue as a going concern. Any such inability to continue as a going concern may result in our security holders losing their entire investment. Our financial statements, which have been prepared in accordance with generally accepted accounting principles, contemplate that we will continue as a going concern and do not contain any adjustments that might result if we were unable to continue as a going concern. Notwithstanding the foregoing, our cash flow deficiencies raise substantial doubt as to our ability to continue as a going concern. Also,our existing and anticipated working capital needs, the acceleration or modification of our expansion plans, lower than anticipated revenues, or increased expenses or other events will affect our ability to continue as a going concern.
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We anticipate incurring operating losses and negative cash flows in the foreseeable future resulting in uncertainty of future profitability and limitation on our operations.
We anticipate that we will continue to incur operating losses and negative cash flows in the foreseeable future and will accumulate increasing deficits as we increase our expenditures for (i) infrastructure, (ii) sales and marketing, (iii) inventory, (iv) personnel, and (v) general operating expenses. Any increases in our operating expenses will require us to achieve significant revenue before we can attain profitability. In the event that we are unable to achieve profitability or raise sufficient funding to cover our losses, we may not be able to meet our obligations as they come due, raising substantial doubts as to our ability to continue as a going concern.
We will need substantial additional funding and may be unable to raise capital when needed, which would force us to delay, reduce or eliminate our product development programs, commercialization efforts or acquisition strategy.
We have made significant investments for sales, marketing, securing commercial quantities of our current products from our manufacturers, and distribution. We expect to use revenue from sales of our current products to fund a portion of the costs for establishing and expanding our sales and marketing infrastructure and for future product development. However, we will need additional funding for these purposes and may be unable to raise capital when needed or on attractive terms which would force us to delay, reduce or eliminate our development programs or commercialization efforts.
As of
Item 5.01 Changes in Control of Registrant.
As previously mentioned herein, pursuant to the Closing of the Merger, the Company issued 58,407,331 shares of its Common Stock to the members of VitaMed in exchange for 100% of their ownership thereof. Prior to the subject Merger, the members of VitaMed owned no shares of the Company.
On the Closing Date of the Merger, and after giving effect to (i) the Reverse Split and (ii) the issuance of the Company's Common Stock in exchange for all of the outstanding units of VitaMed, there are 58,573,187 shares of the Company's Common Stock issued and outstanding. The aggregated beneficial ownership on a fully diluted basis is as follows:
· The members who exchanged their units of VitaMed in connection with the Merger
acquired an aggregate beneficial ownership of 58,407,331 shares or approximately ninety-nine percent (99%) of the issued and outstanding shares of the Company's Common Stock, and
· Shareholders beneficially owning 100% of the shares of the Company's Common
Stock immediately prior to the consummation of the Merger were diluted to an aggregate beneficial ownership of 165,856 shares or approximately one percent (1%) of the Company's issued and outstanding shares of Common Stock.
In conjunction with the Closing of the Merger, the Company's sole officer and director prior to the Merger resigned and those individuals designated by VitaMed became the Company's officers and directors. There are no other arrangements or understandings regarding the Merger that are not outlined within the aforementioned Merger Agreement.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment ofCertain Officers; Compensatory Arrangements of Certain Officers.
Change in the Directors Serving on our Board
In connection with the Merger, the sole director serving on the Company's Board of Directors immediately prior to the Merger resigned and the following individuals were elected as directors:
Robert G. Finizio , ChairmanJohn C.K. Milligan Brian Bernick , M.D.
Information on each of the new directors is set forth herein at Directors and Executive Officers.
Change in Officers
In connection with the Merger, the sole officer of the Company immediately prior to the Merger resigned and the following individuals were named as officers:
Robert G. Finizio Chief Executive OfficerJohn C.K. Milligan President , SecretaryDaniel A. Cartwright Chief Financial Officer, Vice President Finance, TreasurerMitchell Krassan Executive Vice President, Chief Strategy Officer
The above officers hold the same positions in VitaMed. Officers serve at the pleasure of the Company's Board of Directors. Information on each of the new officers is set forth herein at Directors and Executive Officers.
65
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Item 9.01 Financial Statements and Exhibits. (a) Financial Statements of Business Acquired: See Financial Statements of VitaMed for six months ended June 30, 2011 and for years ended December 31, 2010 and 2009 filed as exhibits to the 14C filed with the Commission on September 12, 2011. (b) Pro Forma Financial Information: See Unaudited Proforma Consolidated Financial Statements filed as exhibits to the 14C filed with the Commission on September 12, 2011. (c) Shell Company Transactions: None. (d) Exhibits: Exh. No. Date Document July 18, Agreement and Plan of Merger by and among AMHN, Inc., 2.1 2011 VitaMedMD, LLC and VitaMed Acquisition, LLC(1) 3.1 August 3, Certificate of Amendment and Restatement to the Articles of 2011 Incorporation of AMHN, Inc. (to change name and increase authorized shares) (4) 10.0 July 9, 2009 Lease Agreement(4) 10.1 n/a Long Term Incentive Plan, as amended(2) 10.2 n/a Non-qualified Stock Option, form of(4) 10.3 n/a Common Stock Purchase Warrant, form of(4) 10.4 n/a Lock Up Agreement, form of(1) 10.5 July 18, Senior Secured Promissory Note, form of* 2011 10.6 July 18, Security Agreement, form of* 2011 10.7 September 8, Stock Purchase Agreement between the Company and Pernix 2011 Therapeutics, LLC(3) 10.8 September 8, Lock-Up Agreement between the Company and Pernix 2011 Therapeutics, LLC(3) 10.9 September Convertible Promissory Note, form of* 2011 99.1 n/a Audited Financial Statements for VitaMedMD, LLC for years ended December 31, 2010 and 2009(2) 99.2 n/a Unaudited Financial Statements for VitaMedMD, LLC for six months ended June 30, 2011 and 2010(2) 99.3 n/a Unaudited Consolidated Proforma Financial Statements for AMHN, Inc. reflecting VitaMed acquisition as of December 31, 2010 and June 30, 2011(2) 99.4 October 10, Consent of Auditor(4) 2011 99.5 October 5, Press Release(4) 2011
____________________________
(1) Filed as an exhibit to Form 8-K filed with the Commission on
(2) Filed as an exhibit to Definitive Information Statement on Schedule 14C filed
with the Commission on
(3) Filed as an exhibit to Form 8-K filed with the Commission on September 14,
2011.
(4) Filed as an exhibit to Form 8-K filed with the Commission on October 11,
2011. * Filed herewith. 66
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