TABULA RASA HEALTHCARE,INC (NASDAQ:TRHC) Files An 8-K Entry into a Material Definitive Agreement
Item 2.01 Entry into a Material Definitive Agreement
On December31, 2018, Tabula Rasa HealthCare,Inc., a Delaware corporation (“TRHC”), CareKinesis,Inc., a Delaware corporation (“CareKinesis”), Careventions,Inc., a Delaware corporation (“Careventions”), Capstone Performance Systems, LLC, a Delaware limited liability company (“Capstone”), J.A. Robertson,Inc., a California corporation (“Robertson”), Medliance LLC, an Arizona limited liability company (“Medliance”), CK Solutions, LLC, a Delaware limited liability company (“CK Solutions”), TRSHC Holdings, LLC, a Delaware limited liability company (“TRSHC”), SinfoniaRX,Inc., an Arizona corporation (“SinfoniaRX”), TRHC MEC Holdings, LLC, a Delaware limited liability company (“TRHC MEC”), Mediture LLC, a Minnesota limited liability company (“Mediture”), eClusive L.L.C., a Minnesota limited liability company (“eClusive”), and Cognify, LLC, a Delaware limited liability company (“Cognify” and, together with TRHC, CareKinesis, Careventions, Capstone, Robertson, Medliance, CK Solutions, TRSHC, SinfoniaRX, TRHC MEC, Mediture and eClusive, the “Borrowers”) entered into a Loan and Security Modification Agreement (the “Amendment”) with the several banks and other financial institutions or entities party thereto (the “Lenders”) and Western Alliance Bank, an Arizona corporation, as a Lender and as administrative agent and collateral agent for the Lenders (the “Agent”). The Amendment amends that certain Amended and Restated Loan and Security Agreement, dated September6, 2017, by and among the Borrowers, the Lenders and the Agent (as amended, the “Amended Loan Agreement”). Capitalized terms used herein but not otherwise defined have the meaning set forth in the Amended Loan Agreement.
The Amendment amends, among other things, the Borrowers’ revolving credit facility to increase its size from $40 million to $60 million (the “Credit Facility”). The Amendment also eliminates the Borrowers’ option to request an increase in the size of the Credit Facility of up to $10 million upon the successful syndication of such additional amounts. Loans under the Credit Facility, as amended, will bear interest at a rate equal to the Prime Rate plus an Applicable Margin, with Prime Rate defined as the greater of (i)5.5% or (ii)the prime rate published in the Money Rates section of the Western edition of The Wall Street Journal, or such other rate or interest publicly announced from time to time by the Agent as its Prime Rate. The Amendment decreases the minimum unrestricted cash balance the Borrowers are required to maintain in their accounts with the Agent plus amounts available for draw under the Credit Facility from $3 million to $1.5 million. The financial covenants with respect to the Credit Facility otherwise remain unchanged.
As amended, the Credit Facility is subject to a success fee equal to $200,000, payable upon the earliest to occur of the following: (i)September6, 2020, the Credit Facility’s maturity date; (ii)the acceleration of the Credit Facility to the terms of the Amended Loan Agreement; and (iii)the prepayment of the Credit Facility and the termination of the Agent’s commitments under the Credit Facility. An additional facility fee equal to $50,000 is due and payable in connection with the Amendment and the increase in the Credit Facility.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit10.1 to this Current Report on Form8-K and incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets
On January2, 2019, TRHC completed the previously announced acquisition (the “Transaction”) of all of the outstanding share capital and options to purchase share capital of DoseMe Holdings Pty Ltd ACN 168 742 336, a proprietary company limited by shares organized under the Laws of Australia (the “Company”) from the shareholders and option holders of the Company (“Sellers”). The acquisition was made to a Share Purchase Deed (the “Purchase Agreement”), made and entered into as November30, 2018, by and among (a)TRHC, (b)DM Acquisition Pty Ltd, a proprietary company limited by shares organized under the Laws of Australia and wholly-owned subsidiary of TRHC (“Purchaser”), (c)the Sellers and (d)Charles Cornish, solely in his capacity as the Seller Representative. Capitalized terms used herein but not otherwise defined have the meaning set forth in the Purchase Agreement.
At the closing, to the terms of the Purchase Agreement, TRHC (i)paid the Sellers $10.0 million in cash consideration, subject to adjustments as set forth in the Purchase Agreement, and (ii)issued 149,053 shares of TRHC common stock (valued at $67.09 per share). A portion of the cash consideration will be held in escrow to secure potential claims by TRHC for indemnification under the Purchase Agreement and in respect of adjustments to the Purchase Price.
In addition, the Sellers will also be eligible to earn additional consideration, payable one-half in cash consideration and one-half in shares of TRHC common stock, with an aggregate value of up to a total of $10.0 million (the “Contingent Consideration”) based on the financial results of the Company as more fully described in the Purchase Agreement. Additionally, to the terms of the Purchase Agreement, the Contingent Consideration may be accelerated in certain instances.
The description of the Purchase Agreement contained in TRHC’s Current Report on Form8-K filed December3, 2018 (the “December3rd 8-K”) is incorporated herein by reference. The summary description of the Purchase Agreement contained in the December3rd 8-K does not purport to be complete and is qualified in its entirety by reference to the terms of the Purchase Agreement, which was filed as Exhibit2.1 to the December3rd 8-K and is incorporated herein by reference. The financial statements of the Company and the pro forma financial information of TRHC required under Item 2.01 of this report will be filed by amendment not later than 71 calendar days after the date on which this Current Report on Form8-K is required to be filed.
Item 2.01 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The disclosures set forth in Item 2.01 above with respect to the Amendment and Item 2.01 above with respect to Contingent Consideration are incorporated by reference into this Item 2.01.
Item 2.01 Unregistered Sales of Equity Securities
The disclosures set forth in Item 2.01 above are incorporated by reference into this Item 2.01. TRHC issued common stock in connection with the closing of the Transactions in a private placement exempt from registration to Section4(a)(2)of the Securities Act of 1933, as amended. TRHC relied on representations made by the individuals who received TRHC common stock to the effect that they were acquiring the TRHC common stock for investment purposes and not with a view to, or for resale in connection with, the distribution of such securities in violation of applicable securities laws and that they had sufficient knowledge and experience in business and financial matters to be capable of evaluating the merits and risks of an investment in such securities.
Item 2.01 Other Events
The following risk factors are provided to update the risk factors of TRHC previously disclosed in TRHC’s periodic reports filed with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form10-K for the year ended December31, 2017:
We face additional risks as a result of the Transaction and may be unable to integrate our businesses successfully and realize the anticipated synergies and related benefits of the Transaction or do so within the anticipated timeframe.
On January2, 2019, we completed our acquisition of the Company. As a result of the Transaction, TRHC faces various additional risks, including, among others, the following:
· adverse tax consequences; and
· if we denominate our international contracts in local currencies, fluctuations in the value of the U.S. dollar and foreign currencies might negatively affect our operating results when translated into U.S. dollars.
The occurrence of any one of these risks could negatively affect our international business and, consequently, our results of operations generally. In the event that we are unable to manage the complications associated with international operations, our business prospects could be materially and adversely affected. Any further expansion in our international operations will require significant management attention and financial resources. We cannot be certain that the investment and additional resources required in establishing and expanding our international operations will produce desired levels of revenue or profitability. If we invest substantial time and resources to establish and expand our international operations and are unable to do so successfully and in a timely manner, our business and operating results will suffer.
Item 2.01 Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
The audited financial statements and unaudited interim financial statements of the Company required by this Item 2.01(a)will be filed by amendment not later than 71 calendar days after the date on which this Current Report on Form8-K is required to be filed.
(b) Pro Forma Financial Information
The unaudited pro forma financial information of TRHC required by this Item 2.01(b)will be furnished by amendment not later than 71 calendar days after the date on which this Current Report on Form8-K is required to be filed.
Share Purchase Deed, made and entered into on November30, 2018, by and among Tabula Rasa HealthCare,Inc., DM Acquisition Pty Ltd, the shareholders and option holders of DoseMe Holdings Pty Ltd ACN 168 742 336 set forth on the pagethereto under the heading “Sellers” and Charles Cornish, solely in his capacity as the Seller Representative (Filed as Exhibit2.1 to TRHC’s Current Report on Form8-K filed December3, 2018 and incorporated by reference herein)
Loan and Security Modification Agreement, entered into as of December31, 2018, by and among CareKinesis,Inc., Tabula Rasa HealthCare,Inc., Careventions,Inc., Capstone Performance Systems, LLC, J.A. Robertson,Inc., Medliance LLC, CK Solutions, LLC, TRSHC Holdings, LLC, SinfoniaRX,Inc., TRHC MEC Holdings, LLC, Mediture, LLC, eClusive L.L.C., Cognify LLC, the several banks and other financial institutions or entities party thereto, and Western Alliance Bank, as a Lender and as administrative agent and collateral agent for the Lenders.
* The schedules and exhibits to the share purchase deed are omitted to Item 601(b)(2)of Regulation S-K. Tabula Rasa HealthCare,Inc. agrees to furnish supplementally to the SEC, upon request, a copy of any omitted schedule or exhibit.
Tabula Rasa HealthCare, Inc. Exhibit
EX-10.1 2 a18-42202_1ex10d1.htm EX-10.1 Exhibit 10.1 LOAN AND SECURITY MODIFICATION AGREEMENT This Loan and Security Modification Agreement (this Amendment),…
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About TABULA RASA HEALTHCARE,INC (NASDAQ:TRHC)
Tabula Rasa HealthCare, Inc. (Tabula Rasa), formerly CareKinesis, Inc., is a provider of patient-specific, data-driven technology and solutions that enable healthcare organizations to optimize medication regimens to improve patient outcomes, reduce hospitalizations and manage risk. The Company delivers its solutions through a suite of technology-enabled products and services for medication risk management, which includes bundled prescription fulfillment and adherence packaging services for client populations with complex prescription needs. It also provides risk adjustment services, which help its clients to properly characterize a patient’s acuity, or severity of health condition, and optimize the associated payments for care. The Company serves approximately 100 healthcare organizations that focus on populations with complex healthcare needs and extensive medication requirements. Its products and services are built around the Medication Risk Mitigation Matrix, or MRM Matrix.