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): April 15, 2019
GLOBAL
HEALTHCARE REIT, INC.
(Exact Name of Registrant as Specified in its Charter)
| Utah | 0-15415 | 87-0340206 | ||
|
(State
or other jurisdiction
of incorporation) |
Commission
File Number |
(I.R.S.
Employer
|
6800 N. 79 th St., Ste. 200, Niwot, CO 80503
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (303) 449-2100
(Former name or former address, if changed since last report)
| [ ] | Written communications pursuant to Rule 425 under the Securities Act |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
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 [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
| ITEM 3.02 | UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEEDS. |
The following sets forth the information required by Item 701 of Regulation S-K with respect to the unregistered sales of equity securities by Global Healthcare REIT, Inc., a Utah corporation (the “Company”):
1.
| a. | On April 15, 2019, the Company executed an Amendment No. 1 to Employment Agreement (the “Amendment”), with an effective date of April 1, 2019, with Zvi Rhine, the Company’s President and CFO (“Rhine”). Pursuant to the Amendment, the Company granted Rhine a bonus for 2018 services in the amount of $90,000 payable in shares of restricted common stock. The shares were valued at $0.33 per share (the closing price of the Company’s stock on April 2, 2019), resulting in 272,727 shares of common stock (the “Securities”). A copy of the Amendment is filed herewith as Exhibit 10.1. | |
| b. | The Securities were granted to Rhine, who qualified as an “accredited investor” as an officer and director of the Company. The Securities will be “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, as amended. | |
| c. | The Company paid no fees or commissions in connection with the issuance of the Securities | |
| d. | The grant of the Securities was undertaken without registration under the Securities Act in reliance upon an exemption from the registration requirements of the Securities Act set forth in Sections 4(2) thereunder. The Executive qualifies as an “accredited investor” within the meaning of Rule 501(a) of Regulation D. In addition, the Securities, which were taken for investment purposes and not for resale, are subject to restrictions on transfer. We did not engage in any public advertising or general solicitation in connection with this transaction, and Executive is aware of all aspects of our business, including our reports filed with the Securities and Exchange Commission and other financial, business and corporate information. Based on our investigation, we believed that the Executive obtained all information regarding the Company and received answers to all questions posed and otherwise understood the risks of accepting our Securities for investment purposes. | |
| e. | See Item 3.02(a) above. | |
| f. | Not applicable |
| 2 |
| ITEM 5.02 | COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS |
On April 15, 2019, the Company signed the Amendment noted in Item 3.02 above. Under the terms of the Amendment Mr. Rhine was granted a bonus for 2018 services in an amount equal to $90,000 payable in restricted common stock valued at a per share price of $0.33 (the closing price of the Company’s stock on April 2, 2019).
The Amendment also adopted a bonus plan for Mr. Rhine applicable to future periods of employment (the “Plan”). Under the terms of the Plan, Mr. Rhine will be entitled to an annual bonus equal to 15% of the increase in the Company’s EBITDA year over year. The bonus is contingent upon the Company being cash flow positive for the year being measured, and may not exceed 100% of Mr. Rhine’s base salary. The bonus will be payable in either cash, shares of common stock or a combination of the two, at the sole discretion of the Company.
| ITEM 9.01: | EXHIBITS |
| Item | Title | ||
| 10.1 | Amendment No. 1 to Employment Agreement |
| 3 |
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 thereunto duly authorized.
|
Global
Healthcare REIT, Inc.
(Registrant) |
||
| Dated: April 16, 2019 | /s/ Lance Baller | |
| Lance Baller, Interim CEO | ||
| 4 |
AMENDMENT NO. I TO EMPLOYMENT AGREEMENT
This Amendment No. I to Employment Agreement dated May 4, 2018 is made and entered into effective the 1 st day of April, 2019 by and between Global Healthcare REIT, Inc . (the “Company”) and Zvi Rhine (“Employee”).
RECITALS
| A. | Employee and the Company entered into an Employment Agreement dated May 4, 2018, to be effective January 1, 2018 (the “Employment Agreement”); | |
| B. | Employee and the Company wish to amend Section 4(B) of the Employment Agreement to define Employee’s eligibility for a performance bonus (“Bonus”) during the term of the Employment Agreement. |
NOW, THEREFOR, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:
1. Defined Terms . Unless otherwise defined herein, capitalized terms shall have the meaning set forth in the Employment Agreement.
2. Conflicting Provisions . In the event of any conflict or inconsistency between the provisions of this Agreement and the terms of the Employment Agreement, the provisions of this Agreement shall control. It is the intent that this Agreement replaces and supersedes in its entirety Section 4(B) of the Employment Agreement.
3. 2018 Bonus. It is agreed that Employee shall receive a performance bonus for services rendered in 2018 in the amount of $90,000 (the “2018 Bonus”). The 2018 Bonus shall be paid in restricted shares of the Company’s Common Stock valued at the closing price of trading on the over-the-counter market on the first trading day following April 1, 2019. The shares will be “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”) and certificates should bear the Company’s customary restrictive legend. The 2018 Bonus will be subject to customary payroll tax deductions.
4. Employee Bonus Plan. For each completed calendar year beginning in 2019 for which Employee has performed services for the Company under the Employment Agreement for the entire year, Employee shall be entitled to a performance bonus determined and administered as follows:
(a) To be eligible for a Bonus, the Company must have achieved positive cash flow for the year, as shown on the Company’s audited financial statements for that year.
(b) The Bonus will be an amount equal to 15% of the increase, if any, in consolidated EBITDA for the year compared to the Company’s consolidated EBITDA for the preceding year. The Bonus will be subject to customary payroll tax deductions. Consolidated EBITDA shall be determined from the Company’s audited financial statements for the year in question, which shall be conclusive for all purposes.
(c) The Bonus will not exceed 100% of Base Salary paid to Employee for the year.
(d) The Bonus will be paid in either cash, shares of Common Stock, or a combination of both, as determined by the Compensation Committee of the Board of Directors, in its sole discretion.
(e) If the Bonus is paid in shares of Common Stock, either in whole or in part, the Common Stock will be valued at the closing price of the Common Stock on its Principal Market on the first trading day after April 1. The shares of Common Stock will be “restricted securities” within the meaning of Rule 144 and certificates evidencing same shall bear the Company’s customary restrictive legend.
(f) The Bonus will be payable as soon as practicable after the Company files its Annual Report on Form 10-K for the applicable year.
IN WITNESS WHEREOF, the parties have set their hands and seal as of the date above written.
| GLOBAL HEALTHCARE REIT, INC. | EMPLOYEE | ||
| By: | /s/ Lance Baller | /s/ Zvi Rhine | |
| Lance Baller, CEO | Zvi Rhine | ||