CareMax Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing, Financial Statements and Exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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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
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Explanatory Note
As previously disclosed in a Current Report on Form 8-K filed by CareMax, Inc., a Delaware corporation (the “Company”), on November 18, 2024 (the “Previous 8-K”), on November 17, 2024, the Company and certain of its controlled affiliates (such affiliates, together with the Company, the “Debtors”) commenced filing voluntary petitions (the “Chapter 11 Cases”) in the U.S. Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”) seeking relief under chapter 11 of title 11 of the U.S. Code (the “Bankruptcy Code”). The Chapter 11 Cases are being jointly administered under Case No. 24-80093 (MVL). The Debtors continue to operate their business and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
Item 1.01 Entry into a Material Definitive Agreement.
DIP Credit Agreement
In connection with the Chapter 11 Cases, on November 19, 2024, the Bankruptcy Court entered an interim order (the “Interim DIP Order”) approving the Company, as borrower (the “DIP Borrower”), and certain subsidiaries of the Company from time to time party thereto as guarantors, entering into that certain Superpriority Priming Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”), dated November 19, 2024, with the lenders from time to time party thereto (the “DIP Lenders”) and Acquiom Agency Services LLC, as administrative agent and collateral agent.
Pursuant to the DIP Credit Agreement, the DIP Lenders have agreed, upon the terms and conditions set forth therein, to make available to the DIP Borrower a $122.0 million senior secured superpriority postpetition term loan financing facility (the “DIP Facility”). Under the DIP Facility, (i) $12.0 million in New Money DIP Loans has been funded under the Interim DIP Order and (ii) $18.5 million in New Money DIP Loans will be made available on a final basis (the “Final DIP Loans”) upon Bankruptcy Court approval of the DIP Facility on a final basis (the “Final DIP Order”) and satisfaction of the other applicable conditions to any Final DIP Loans. Upon entry of the Final DIP Order, an aggregate principal amount of $91.5 million of Prepetition Loans held by the Prepetition Lenders will be deemed to have been converted on a cashless, dollar-for-dollar basis into senior secured superpriority postpetition term loans under the DIP Facility.
The foregoing description of the DIP Credit Agreement and the DIP Facility does not purport to be complete and is qualified in its entirety by reference to the information regarding the DIP Credit Agreement and the DIP Facility set forth in the Previous 8-K (including the full text of the DIP Credit Agreement, a copy of which is filed as Exhibit 10.2 to the Previous 8-K), which information is incorporated by reference into this Item 1.01.
Stalking Horse APA
On November 24, 2024, the Company entered into a binding “stalking horse” asset purchase agreement (the “Stalking Horse APA”) with ClareMedica Viking, LLC (the “Buyer”) and ClareMedica Parent Holdings, LP (“Buyer Parent”), pursuant to which the Buyer has agreed to purchase, subject to the terms and conditions contained therein, the “Acquired Assets” of the Company and certain of its subsidiaries (the “Seller Group”), consisting of a vast majority of the Company’s operating clinic business (the “Core Centers Assets”), and to assume certain liabilities.
The acquisition of the Acquired Assets and assumption of the Acquired Liabilities by the Buyer pursuant to the Stalking Horse APA is subject to approval of the Bankruptcy Court and one or more auctions, if necessary, to solicit higher or otherwise better bids. On November 25, 2024, the Debtors intend to file a motion (the “Bidding Procedures Motion”) seeking approval of, among other things, bidding procedures (the “Bidding Procedures”), which will establish procedures for the selection of the highest or otherwise best offer(s) for the sale or sales of the Core Centers Assets. Other interested bidders would be permitted to participate in the auction if they submit qualifying offers that are higher or otherwise better than the Stalking Horse APA. The Stalking Horse APA acts as a baseline for competitive bids for the acquisition of the Core Center Assets. The Bidding Procedures Motion additionally seeks Bankruptcy Court approval of the Stalking Horse APA and designation of the Buyer as the “stalking horse” bidder for the Acquired Assets.
Under the terms of the Stalking Horse APA, the Buyer has agreed, subject to Bankruptcy Court approval and absent any higher or otherwise better bid, to acquire the Acquired Assets and to assume the Acquired Liabilities from the Seller Group for (i) a cash payment of $35 million and (ii) units of ClareMedica Health Partners, LLC, a wholly-owned subsidiary of Buyer Parent, having an aggregate value of $65 million. The Stalking Horse APA includes customary representations and warranties and various customary covenants under the circumstances that are subject to certain limitations, including, without limitation, a break-up fee and expense reimbursement and the right to designate executory contracts and unexpired leases to assume or reject.
The Bidding Procedures and Stalking Horse APA remain subject to approval by the Bankruptcy Court and the foregoing description is not complete, and is qualified in its entirety by reference to the Stalking Horse APA, a copy of which is attached to this Current Report on Form 8-K as Exhibit 2.1, and is hereby incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information regarding the DIP Credit Agreement and the DIP Facility included in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing