8-K

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 (Date of earliest event reported): August 4, 2014

PhotoMedex, Inc.

(Exact Name of Registrant Specified in Charter)

Nevada	0-11635	59-2058100
(State or Other	(Commission File	(I.R.S. Employer
Jurisdiction of	Number)	Identification No.)
Incorporation)

100 Lakeside Drive, Suite 100, Horsham, Pennsylvania	19044
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code:   215-619-3600

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

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 communications 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 communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Item

On May 12, 2014, PhotoMedex, Inc. (the “Company”) entered into an $85 million senior secured credit facilities (“the Facilities”) with the lenders that are parties thereto (collectively, the “Lenders”) and JP Morgan Chase (“Chase”) as Administrative Agent for the Lenders.  The Facilities included a $10 million revolving credit facility and a $75 million four-year term loan. The Facilities were utilized to refinance the existing term debt with Chase, fund the acquisition of LCA-Vision, Inc. and for working capital and other general corporate purposes.

Interest is determined at Eurodollar plus a margin between 3.25% and 4.50%. The margin is updated quarterly based on the then-current leverage ratio. The Facilities are secured by a first priority security interest in and lien on all assets of the Company. All current and future subsidiaries are guarantors on the Facilities.

There are financial covenants including a maximum leverage covenant and a minimum fixed charge covenant, which the Company must maintain. These covenants will be determined quarterly based on a rolling past four quarters of financial data. As of June 30, 2014, the Company failed to meet both financial covenants and is in default of the Facilities. On August 4, 2014, the Company received a notice of default and a reservation of rights from Chase and is engaging a third-party independent advisor to assist the Company in negotiating a longer term solution to the current default.  As a result of the default, the Lenders may accelerate the $85 million outstanding under the Facilities.  The Lenders also may increase the applicable interest on loans under the Facilities by 2%.  As of the date of this report, the Lenders have neither accelerated the outstanding amount nor increased the applicable interest but may do so in the future.

9.01.                      Financial Statements and Exhibits.

(d)           Exhibits.

99.1           Reservation of Rights Letter dated August 4, 2014 issued by JPMorgan Chase Bank, N.A.

SIGNATURE

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

	PHOTOMEDEX, INC.
Date:  August 7, 2014	By: /s/ Dolev Rafaeli
	Dolev Rafaeli Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.1	Reservation of Rights Letter dated August 4, 2014 issued by JPMorgan Chase Bank, N.A.

EX-99.1

EXHIBIT 99.1

Lauren Daley

August 4, 2014

VIA CERTIFIED MAIL & ELECTRONIC MAIL

PhotoMedex, Inc.

Gatorade Acquisition Corp.

Radiancy, Inc.

PhotoMedex Technology, Inc.

Lumiere, Inc.

c/o PhotoMedex, Inc.

100 Lakeside Drive

Horsham, PA 19044

Attention:  Dennis McGrath

E-mail:  dmcgrath@photomedex.com

Re:           Reservation of Rights

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of May 12, 2014 (as amended, supplemented or otherwise modified, the “Credit Agreement”), by and among PhotoMedex, Inc., as borrower (the “Borrower”), the Loan Parties from time to time party thereto, the Lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”), among others.  Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement.

Pursuant to Section 6.11(a) of the Credit Agreement, the Borrower will not permit the Leverage Ratio on the last day of any fiscal quarter in calendar year 2014 to be greater than 2.50 to 1.00.  Section 6.11(b) of the Credit Agreement provides that  the Borrower will not permit the Fixed Charge Coverage Ratio for any period of four consecutive quarters to be less than 1.25 to 1.00.  Pursuant to clause (d) of Article VII of the Credit Agreement, an Event of Default shall occur in the event that any Loan Party fails to observe or perform any covenant, condition or agreement contained in Article VI.  The Borrower has advised the Administrative Agent and the Lenders that (i) the Leverage Ratio for the fiscal quarter ending June 30, 2014 was greater than 2.50 to 1.00 and (ii) the Fixed Charge Coverage Ratio for the trailing 12 months ending June 30, 2014 was less than 1.25 to 1.00.  Accordingly, Events of Default have occurred and are continuing for failure to comply with Sections 6.11(a) and (b) of the Credit Agreement for the fiscal quarter ending on June 30, 2014  (the “Specified Defaults”) which Specified Defaults may not be cured.

JPMorgan Chase Bank, N.A. • NY1-T004, 106 Corporate Park, 2nd. Fl., White Plains, NY  10604-3806

Telephone: 914-993-2255 Facsimile: 914-993-2260

lauren.daley@chase.com

The Administrative Agent hereby expressly reserves all of its rights and remedies with respect to the Specified Defaults and any other Defaults or Events of Default which may now exist or hereafter occur under the Credit Agreement or any of the other instruments, documents, and agreements executed in connection therewith (collectively, the “Loan Documents”), including, without limitation, the right to impose interest at the default rate and declare the obligations of the Borrower under the Credit Agreement and the other Loan Documents immediately due and payable.

The election of the Administrative Agent and the Lenders at this time not to enforce their rights or exercise their remedies does not constitute a waiver by the Administrative Agent or the Lenders of, or an agreement by the Administrative Agent or the Lenders to forbear from enforcing or exercising, any present or future rights or remedies that they may have under the Credit Agreement, the other Loan Documents or applicable law (including acceleration of the outstanding credits), nor shall it be a bar to the exercise of any of the Administrative Agent’s or the Lenders’ rights and remedies at a later date.

Nothing herein or in previous or subsequent communications or discussions between the Borrower, counsel to the Borrower, the Administrative Agent, or counsel to the Administrative Agent shall prejudice or be deemed to constitute a waiver of, or estoppels or forbearance by the Administrative Agent with respect to, any of its rights and remedies under the Credit Agreement, the other Loan Documents, or applicable law, all of which are expressly reserved.

Very truly yours,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:         /s/ Lauren Daley             

Name:  Lauren Daley

Title: Authorized Officer

cc:           Ron Franklin, Esq. (via electronic mail)

Rick Hyman, Esq. (via electronic mail)