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
April 12, 2016
Date of Report (Date of earliest event reported)
PhotoMedex, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 0-11635 | 59-2058100 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Ident. No.) |
| 100 Lakeside Drive, Suite 100, Horsham, Pennsylvania | 19044 | |
| (Address of principal executive offices) | (Zip Code) |
(610) 208-1991 Registrant’s telephone number, including area code |
| N/A |
| (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:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☒ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
| Item 8.01 | Other Events. |
On April 12, 2016, PhotoMedex, Inc. (“PHMD” or the “Company”) (NasdaqC and TASE: PHMD) issued a notice (the “Notice”) to DS Healthcare Group, Inc. (“DSKX”). The Company and its subsidiaries, Radiancy, Inc. (“Radiancy”) and PhotoMedex Technology, Inc. (“P-TECH”, together with PHMD and Radiancy, the “PHMD Group”), had entered into Agreements and Plans of Merger and Reorganization (the “Agreements”) with DSKX and its subsidiaries on February 19, 2016. Under those Agreements, the Company’s two subsidiaries were to merge with two subsidiaries of DSKX; as a result, DSKX would become the holding company for Radiancy and P-TECH, while the Company would become the majority shareholder in DSKX. Those Agreements and the pending transaction were reported in a Current Report on Form 8-K filed by the Company on February 22, 2016.
The Notice states that, based upon the disclosures set forth in DSKX’s Current Report on Form 8-K filed on March 23, 2016 and subsequent press releases and filings by DSKX with the United States Securities and Exchange Commission (collectively, the “DSKX Public Disclosure”), DSKX is in material breach of various representations, warranties, covenants and agreements set forth in the Agreements; had failed to provide to the Company the information contained in the DSKX Public Disclosures during the discussions relating to the negotiation and execution of the Agreements; and continues to be in material breach under the Agreements. As a result, the conditions precedent to the closing of these transactions as set forth in the Agreements may not be able to occur.
The Notice also declares that the Company reserves all its rights and remedies under the Agreements, including, without limitation, the right to terminate the Agreements and collect a termination fee from DSKX of $3.0 million. The Notice further asserts that the Company regards certain provisions of the Agreements to have been waived by DSKX and to no longer be in effect, including the non-solicitation and no-shop provisions, negative covenants, and termination events, as applicable solely to the PHMD Group, as well as the payment of any termination fee by PHMD to DSKX. Finally, the Notice provides that the Company has the right to terminate the Agreements to pursue, consider and enter into any acquisition proposal or other transaction without the payment of fees and expenses to DSKX.
The foregoing descriptions of the Notice and Agreements do not purport to be complete and are qualified in their entirety by reference to the full text of the Notice, which is attached hereto as Exhibit 99.1, and the Agreements which were attached to the Company’s Current Report on Form 8-K as filed on February 22, 2016, all of which are incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| 99.1 | Notice dated April 12, 2016 from PhotoMedex, Inc., Radiancy, Inc., and PhotoMedex Technology, Inc. to DS Healthcare Group, Inc. |
Forward Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations of PHMD and are subject to uncertainty and changes in circumstances. These forward-looking statements include, among others, statements regarding the expected benefits of a potential combination of PHMD and DSKX, including the expected effect of the Mergers on PHMD’s and DSKX’s financial results and profile (e.g., earnings per share and synergies); the anticipated benefits of geographic diversity that would result from the Mergers and the expected results of PHMD’s and DSKX’s product portfolios; expectations about future business plans, prospective performance and opportunities; required regulatory approvals and the expected timing of the completion of the transaction. These forward-looking statements may be identified by the use of words such as “expect,” “anticipate,” “believe,” “estimate,” “potential,” “should”, “will” or similar words intended to identify information that is not historical in nature. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. There is no assurance that the potential transaction will be consummated, and there are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made herein. These risks and uncertainties include (a) the timing to consummate a potential transaction between PHMD and DSKX; (b) the ability and timing to obtain required regulatory approvals and satisfy or waive other closing conditions; (c) the possibility that the Mergers do not close when expected or at all; or that the companies may be required to modify aspects of the Mergers to achieve regulatory approval; (d) the ability of DSKX to promptly and effectively integrate the respective businesses of Radiancy and P-TECH; (e) the requirement to satisfy closing conditions to the Mergers as set forth in the Merger Agreements; (f) the outcome of any legal proceedings that may be instituted in connection with the transaction; (g) the ability to retain certain key employees of Radiancy or Photomedex Technology; (h) that there may be a material adverse change affecting PHMD or DSKX, or the respective businesses of PHMD or DSKX may suffer as a result of uncertainty surrounding the transaction; (i) that PHMD may enter into a transaction with a third party in connection with Radiancy and P-TECH; (j) that PHMD may become subject to litigation in connection with the Mergers; and (k) the risk factors disclosed in PHMD’s filings with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K, which PHMD filed on April 7, 2016. Forward-looking statements reflect PHMD’s management’s analysis as of the date of this Current Report on Form 8-K, even if subsequently made available PHMD on its website or otherwise. PHMD does not undertake to revise these statements, whether written or oral, that may be made from time to time to reflect subsequent developments, except as required under the federal securities laws. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
Additional Information and Where You Can Find It
This Current Report on Form 8-K is not a solicitation of a proxy from any stockholder of PHMD. In connection with the Merger Agreements, DSKX and PHMD intend to file relevant materials with the SEC, including proxy statements by each of PHMD and DSKX. Investors and security holders are urged to read these materials and any other relevant documents filed with the SEC when they become available because they will contain important information about PHMD, DSKX and the proposed transaction. The proxy statements, and other relevant materials (when they become available), and any other documents filed by PHMD or DSKX with the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, investors and security holders of PHMD may obtain free copies of the documents filed with the SEC by directing such request to PHMD at 100 Lakeside Drive, Suite 100, Horsham, Pennsylvania 19044, Attention: Corporate Secretary, or by telephone at (215) 619-3600.
This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
Participants in the Solicitation
PHMD and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed transactions. Certain executive officers and directors of PHMD have interests in the transaction that may differ from the interests of stockholders generally. Information about PHMD’s directors and executive officers is available in PHMD’s Annual Report on Form 10-K, which PHMD filed on April 7, 2016. These interests will be described in the proxy statement when it becomes available.
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.
| PHOTOMEDEX, INC. | ||
| Dated: April 12, 2016 | ||
| By: | /s/ Dolev Rafaeli | |
| Dolev Rafaeli | ||
| Chief Executive Officer | ||
EXHIBIT INDEX
| Exhibit Number | Description | ||
| 99.1 | Notice dated April 12, 2016 from PhotoMedex, Inc., Radiancy, Inc., and PhotoMedex Technology, Inc. to DS Healthcare Group, Inc. | ||
Exhibit 99.1
[STEVENS & LEE LETTERHEAD]
April 12, 2016
Via Electronic Mail, Facsimile and Overnight Delivery
| CKR
Law 1330 Avenue of the Americas 14th Floor New York, New York 10019 Attn: Stephen A. Weiss, Esq. Facsimile: (212) 259-8200 Email: sweiss@ckrlaw.com |
GreenspoonMarder
Law One Boca Place, Suite 400-E 2255 Glades Road Boca Raton, Florida 33431 Attn: Rose Schindler, Esq. Facsimile: (561) 807-7529 Email: rose.schindler@gmlaw.com |
| Re: | Agreement and Plan of Merger and Reorganization, dated as of February 19, 2016 (the “Radiancy Merger Agreement”), among PhotoMedex, Inc. (“PHMD”), Radiancy, Inc., a wholly-owned subsidiary of PHMD (“Radiancy”), DS Healthcare Group, Inc. (“DSKX”) and PHMD Consumer Acquisition Corp., a wholly-owned subsidiary of DSKX (“Merger Sub A”) and Agreement and Plan of Merger and Reorganization, dated as of February 19, 2016 (the “P-Tech Merger Agreement” and together with the Radiancy Merger Agreement, the “Merger Agreements”), among PHMD, Photomedex Technology, Inc., a wholly-owned subsidiary of PHMD (“P-Tech”), DSKX, and PHMD Professional Acquisition Corp., a wholly-owned subsidiary of DSKX (“Merger Sub B”) |
Ladies and Gentlemen:
Reference is hereby made to the Merger Agreements. Capitalized terms not otherwise defined herein shall have the respective meanings assigned to such terms in the Megrer Agreements.
On behalf of our client, PHMD, notice is hereby given that, based upon the disclosures set forth in the Current Report on Form 8-K filed by DSKX on March 23, 2016 (the “DSKX Form 8-K”) with the Securities and Exchange Commission (the “SEC”) and subsequent press releases and filings with the SEC (collectively, the “DSKX Public Disclosure”), DSKX, Merger Sub A and Merger Sub B are in material breach of various representations, warranties, covenants and agreements set forth in the Merger Agreements (the “Material Breaches”), including, but not limited to, Sections 4.3 (Capitalization), 4.4 (Financial Statements), 4.5 (No Indebtedness or Undisclosed Liabilities), 4.6 (Absence of Changes), 4.8 (Compliance with Laws; Permits), 4.9 (Proceedings; Orders), 4.22 (Accounting and Disclosure Controls), 4.23 (SEC Reports), 5.12 (Conduct of Business) and 5.16 (Board Observer) of the Merger Agreements. As a result, the conditions precedent to closing set forth in Section 2.12 of the Merger Agreements may not be able to occur and grounds for termination set forth in Section 8.1 of the Merger Agreements now exist. This letter confirms that PHMD, Radiancy and P-Tech (collectively, the “PHMD Group”) have not waived the Material Breaches pursuant to Section 9.2 of the Merger Agreements, and the PHMD Group expressly reserve all of their rights, powers, privileges and remedies under the Merger Agreements, applicable law or otherwise with respect to any Material Breaches now existing or hereafter arising under the Merger Agreements, including without limitation, the right to terminate the Merger Agreements. The failure of any member of the PHMD Group to exercise any such rights, powers, privileges and remedies is not intended, and shall not be construed, to be a waiver of any such Material Breach. The PHMD Group may elect to exercise any or all of their rights, at their sole option, at any time hereafter, without the necessity of any further notice, demand or other action on the part of the PHMD Group, including the right to collect a termination fee of $3.0 million pursuant to Section 8.3(d) of the Merger Agreements.
Additionally, we understand that the parties will be appearing in the United States District Court for the Southern District of Florida in connection with an emergency motion for a temporary restraining order and preliminary injunction filed by Fox Rothschild LLP on April 5, 2016 (the “April 5 Motion”). Notice is also hereby given that, due to, among other things, the Material Breaches, PHMD’s board and committee observation rights under Section 5.16 of the Merger Agreements and the interest in the PHMD Group in preserving its rights, upon a termination of the Merger Agreements, to the termination fee and/or expense reimbursements payable by DSKX pursuant to Section 8.3 of the Merger Agreements, the PHMD Group expressly reserve all of their rights, powers, privileges and remedies to intervene in connection with the April 5 Motion or anytime thereafter during the pendency of the litigation.
We also notify you that the developments and facts underlying the DSKX Form 8-K which contained material information relevant to the transaction were not relayed to PHMD by DSKX and its representatives during discussions relating to the negotiation and execution of the Merger Agreements or, for that matter, following the execution of the Merger Agreements, until Tuesday, March 22, 2016, with DSKX providing notice to us of the possibility of a material filing on the evening of Monday, March 21, 2016.
Based upon the foregoing, the PHMD Group (a) considers (i) the non-solicitation and no-shop provisions applicable solely to the PHMD Group contained in Section 5.9 of the Merger Agreements, (ii) the negative covenants as they are applicable solely to the PHMD Group contained in Sections 5.12 of the Merger Agreements, (iii) the termination events as they are applicable solely to the PHMD Group set forth in Section 8.1(c)(ii) of the Merger Agreements, and (iv) the payment of any termination fee by PHMD to DSKX pursuant to Sections 8.3(b) of the Merger Agreements to be waived by DSKX and of no further effect and (b) has the right to terminate the Merger Agreements to pursue, consider and enter into any Acquisition Proposal or other transaction or arrangement without paying any fees and expenses to DSKX in connection therewith.
Nothing contained in this letter or any delay by the PHMD Group in exercising any rights, powers, privileges and remedies under the Merger Agreements or applicable laws with respect to the Material Breaches now existing or hereafter arising under the Merger Agreements shall be construed as a waiver or modification of such rights, powers, privileges and remedies. This letter is not, and shall not be deemed to be, a waiver of, or a consent to, any defaults, noncompliances, or Material Breaches now existing or hereafter arising under the Merger Agreements. This letter shall not entitle DSKX to any other or further notice or demand, other than a notice of termination by the PHMD Group of the Merger Agreements.
The holding of any discussions between or among any or all of the PHMD Group, DSKX, Merger Sub A and/or Merger Sub B regarding the Merger Agreements and the April 5 Motion shall not constitute any waiver of any Material Breaches, or an agreement to forbear from the exercise of the PHMD Group’s rights and remedies under the Merger Agreements, or applicable law, nor shall it be construed as an undertaking by the PHMD Group to continue such discussions or to enter into any such amendments, modifications or restructurings.
Very truly yours,
STEVENS & LEE
/s/ Joseph E. Wolfson
Joseph E. Wolfson
| cc: | Mr. Dolev
Rafaeli (via electronic mail) Mr. Dennis McGrath (via electronic mail) |