8-K 1 body_8k.htm body_8k.htm

 
 

 
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:  January 20, 2009
(Date of earliest event reported)

Hythiam, Inc.
(Exact name of registrant as specified in its charter)

Delaware
001-31932
88-0464853
(State or other jurisdiction
of incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)

11150 Santa Monica Boulevard, Suite 1500
LOS ANGELES, CALIFORNIA 90025
(Address of principal executive offices, zip code)
(310) 444-4300
(Registrant’s telephone number, including area code)

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:

o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c))


 
 
 

Item 8.01     Other events.

On January 26, 2009, we filed with the Securities and Exchange Commission a Current Report on Form 8-K, on which we reported under Items 1.01 and 2.01, that we disposed of our entire interest in our majority-owned, controlled subsidiary Comprehensive Care Corporation (CompCare).  We hereby provide pro forma financial information required for the transaction as of December 31, 2008.

Item 9.01     Financial Statements and Exhibits.

(b)           Pro forma financial information.
 
The unaudited pro forma consolidated financial statements in the tables below have been prepared by applying pro forma adjustments to the consolidated financial statements included in Hythiam, Inc.’s Annual Report on form 10-K for the year ended December 31, 2008. The unaudited pro forma consolidated statements of operations reflect the transaction described in Item 2.01 above, assuming the transaction had been consummated as of the beginning of the fiscal period presented. The unaudited pro form consolidated balance sheet reflects such transactions, assuming they had been consummated as of  December 31, 2008.

The pro forma adjustments, as described in the notes to the unaudited pro forma consolidated financial statements, are based upon available information and certain assumptions that we believe are reasonable. The allocations are preliminary in nature and subject to change following the transaction based on refinements as actual data becomes available. The unaudited pro forma consolidated financial statements should be read in conjunction with the historical financial statements and the related management’s discussion and analysis of financial condition and results of operations, which are contained in the Hythiam, Inc.’s 2008 Annual Report on Form 10-K.

The unaudited pro forma financial information is for informational purposes only and does not purport to present what our results would actually have been had these transactions actually occurred on the dates presented or to project our results of operations or financial position for any future period.

Forward-Looking Statements

Except for statements of historical fact, the matters discussed in this report are forward looking and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond the company’s control that may cause actual results to differ materially from stated expectations. These risk factors include, among others, limited operating history and lack of statistically significant formal research studies, the risk that treatment protocols might not be effective, difficulty in developing, exploiting and protecting proprietary technologies, intense competition and substantial regulation in the healthcare industry; and additional risks factors as discussed in the reports filed by the company with the Securities and Exchange Commission, which are available on its website at http://www.sec.gov.

Except as required by law, we disclaim any obligation to release publicly any updates or any changes in its expectations or any change in events, conditions, or circumstances on which any forward-looking statements are based.


 
 
 

HYTHIAM, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2008
(In thousands, except per share amounts)
(unaudited)
 
   
Hythiam, Inc.
          
Hythiam, Inc.
  
   
Consolidated
    
CompCare
    
Pro Forma
  
   
as reported
    
Operations (a)
    
Consolidated
  
                   
Revenues:
                  
Behavioral health managed care services
   $ 35,156     $ (35,156 )   $ -  
Healthcare services
     6,074       -       6,074  
Total revenues
     41,230       (35,156 )     6,074  
                         
Operating expenses:
                        
Behavioral health managed care services
     36,496       (36,496 )     -  
Cost of healthcare services
     1,718       -       1,718  
General administrative expenses
     40,741       (3,682 )     37,059  
Goodwill impairment
     9,775       -       9,775  
Research and development
     3,370       -       3,370  
Depreciation & amortization
     2,733       (872 )     1,861  
Total operating expenses
     94,833       (41,050 )     53,783  
                         
Loss from operations
     (53,603 )     5,894       (47,709 )
                         
Interest income
     830       (26 )     804  
Interest expense
     (1,939 )     276       (1,663 )
Other than temporary impairment
                        
marketable securities
     (1,428 )     -       (1,428 )
Change in fair value of warrant liabilities
     5,744       -       5,744  
Other non-operating income, net
     5       (5 )     -  
Loss before provision for income
                        
taxes from continuing operations
     (50,391 )     6,139       (44,252 )
Provision for income taxes
     27       (5 )     22  
Loss from continuing operations
   $ (50,418 )   $ 6,144     $ (44,274 )
                         
Loss from continuing operations per
                        
common share (basic and diluted):
                        
Loss from continuing operations
   $ (0.92 )   $ (0.11 )   $ (0.81 )
                         
Weighted average shares outstanding:
                        
Basic and diluted
     54,675               54,675  

 
 
 
 
HYTHIAM, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2007
(In thousands, except per share amounts)
(unaudited)
 
   
Hythiam, Inc.
          
Hythiam, Inc.
  
   
Consolidated
    
CompCare
    
Pro Forma
  
   
as reported
    
Operations (a)
    
Consolidated
  
                   
Revenues:
                  
 Behavioral health managed care services
   $ 36,306     $ (36,306 )   $ -  
 Healthcare services
     7,695       -       7,695  
Total revenues
     44,001       (36,306 )     7,695  
                         
Operating expenses:
                        
 Behavioral health managed care services
     35,679       (35,679 )     -  
 Cost of healthcare services
     2,052       -       2,052  
 General administrative expenses
     45,554       (3,721 )     41,833  
 Other impairment
     2,387       -       2,387  
 Research and development
     3,358       -       3,358  
 Depreciation & amortization
     2,502       (923 )     1,579  
Total operating expenses
     91,532       (40,323 )     51,209  
                         
Loss from operations
     (47,531 )     4,017       (43,514 )
                         
Interest income
     1,584       (143 )     1,441  
Interest expense
     (2,190 )     263       (1,927 )
Loss on extinguishment of debt
     (741 )             (741 )
Change in fair value of warrant liabilities
     3,471               3,471  
Other non-operating income, net
     32       (32 )     -  
Loss before provision for income taxes from continuing operations
       4,105       (41,270 )
Provision for income taxes
     87       (72 )     15  
Loss from continuing operations
     (45,462 )     4,177       (41,285 )
                         
Loss from continuing operations per common share (basic and diluted):
          
Loss from continuing operations
   $ (0.99 )   $ (0.09 )   $ (0.90 )
                         
Weighted average shares outstanding:
                        
Basic and diluted
     45,695               45,695  
 
 
HYTHIAM, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2008
(In thousands)
(unaudited)
 
   
Hythiam, Inc.
          
Pro Forma,
  
   
as reported
    
Compcare (b)
    
as adjusted
  
                   
Assets:
                  
Cash and cash equivalents
   $ 10,893     $ 363     $ 11,256  
Marketable securities, at fair value
     146       -       146  
Restricted cash
     24       (1 )     23  
Receivables, net
     2,234       (1,580 )     654  
Notes receivable
     17       (17 )     -  
Prepaids and other current assets
     676       (318 )     358  
   Total Current Assets
     13,990       (1,553 )     12,437  
                         
Marketable securities, at fair value
     10,072       -       10,072  
Property and equipment, net
     2,860       (235 )     2,625  
Goodwill
     493       (493 )     -  
Intellectual property & other intangible assets
     3,899       (642 )     3,257  
Deposits and other assets
     552       (234 )     318  
  Total Assets
   $ 31,866     $ (3,157 )   $ 28,709  
                         
Liabilities and Stockholders' Equity:
                        
Accounts payable
   $ 3,784     $ (388 )   $ 3,396  
Accrued compensation and benefits
     1,844       (368 )     1,476  
Accrued liabilities
     3,191       (1,110 )     2,081  
Accrued claims payable
     6,791       (6,791 )     -  
Short term debt
     9,835       -       9,835  
Income taxes payable
     19       (19 )     -  
   Total Current Liabilities
     25,464       (8,676 )     16,788  
                         
Long-term debt
     2,341       (2,341 )     -  
Accrued reinsurance claims payable
     2,526       (2,526 )     -  
Warrant liabilities
     156       -       156  
Capital lease obligations
     144       (63 )     81  
Deferred rent and other long-term liabilities
     127       -       127  
   Total Liabilities
     30,758       (13,606 )     17,152  
                         
Stockholders' Equity:
                        
Preferred stock
     -       -       -  
Common stock
     6       -       6  
Additional paid-in capital
     174,721       -       174,721  
Accumulated other comprehensive loss
     -       -       -  
Accumulated deficit
     (173,619 )     10,449       (163,170 )
   Total stockholders' equity (deficit)
     1,108       10,449       11,557  
Total Liabilities and Stockholders' Equity
   $ 31,866     $ (3,157 )   $ 28,709  

 
 
 

HYTHIAM, INC.
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)

(a) Reflects the elimination of results for CompCare’s operations, which were reported in our behavioral health managed care reporting segment.

(b) Reflects the elimination of assets and liabilities of CompCare, including the resulting gain on the sale, assuming the sale had been consummated on December 31, 2008:

Net Proceeds from the sale of CompCare
   $ 1,500  
Net liabilities of CompCare operations
     8,949  
         
Gain on sale
   $ 10,449  

The pro forma consolidated statements of operations have not been adjusted to give effect to the gain on sale of CompCare.

 
 
 

SIGNATURES

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

 
Hythiam, Inc.
     
Date:  April 3, 2009
By:  
/s/ MAURICE HEBERT  
   
Maurice Hebert
   
Chief Financial Officer