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): September 19, 2005
Netsmart
Technologies, Inc.
(Exact
name of Registrant as Specified in its Charter)
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Delaware
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0-21177
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13-3680154
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation
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File
No.)
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Identification
No.)
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3500
Sunrise Highway, Suite D-122, Great River, New York 11739
(Address
of Principal Executive Office)
Registrant's
telephone number, including area code: (631) 968-2000
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 (SEE General Instruction A.2. below):
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
1.01. Entry
into a Material Definitive Agreement.
On
September 20, 2005, Netsmart Technologies, Inc. (the “Registrant”) entered into
a merger agreement with CMHC Systems, Inc. and Hayes Acquisition Corp., a
newly-formed wholly-owned subsidiary of the Registrant. Pursuant to the Merger
Agreement, upon the consummation of the merger, the owners of CMHC common
stock
and common stock purchase warrants will have the right to receive cash and
.45175 of a share of the Registrant’s common stock. The total amounts of cash
and stock deliverable by Netsmart upon consummation of the merger is $13
million
in cash and 435,730 shares of Common Stock. In addition, former securities
holders of CMHC will also have the right to receive the amount, if any, by
which
the Net Working Capital of CMHC on the closing date of the merger is greater
than a negative $7.5 million.
In
addition, a shareholder of CMHC beneficially owning approximately 68% of
CMHC's
common stock entered into a Shareholders Voting Agreement (the "Voting
Agreement") pursuant to which such shareholder agreed to vote all of the
shares
of CMHC common stock that the shareholder is entitled to vote at any meeting,
or
in connection with any written consent, of the shareholders of CMHC in favor
of
the merger, the adoption of the Agreement and the other actions contemplated
by
the Agreement.
The
Merger Agreement, together with exhibits, is filed as Exhibit 10.1 hereto
and
the Voting Agreement is filed as Exhibit 10.2 hereto.
A
press
release announcing the transaction and the offering of the securities described
in Item 3.02, below is filed as Exhibit 99.1 hereto.
Item
3.02. Unregistered
Sales of Equity Securities.
(a)
On
September 19, 2005, Netsmart Technologies, Inc. (the “Registrant”) agreed to
sell an aggregate 653,623 shares of common stock and warrants to purchase
163,406 shares of common stock. The closing of the offering is subject to
the closing of the merger described in Item 1.01 above on or before November
3,
2005.
(c
)
The
Registrant will receive $6,000,000 in gross proceeds and pay commissions
of
$300,000. The Registrant will also issue a warrant to purchase 32,681 shares
to
the placement agent, Griffin Securities, Inc.
(d) The
sale
of the securities was exempt from registration pursuant to Section 4(2) of
the
Securities Act, as an offering under Rule 506 of Regulation D. The sale was
to a
total of ten accredited investors, all of which received restricted securities.
(e) The
warrants are exercisable for a five-year period at an exercise price of $11.00
per share. The exercise price and number of shares subject to exercise are
subject to adjustment pursuant to anti-dilution provisions. In addition,
the
Registrant has the option to require the exercise of any outstanding warrants
if, after the first anniversary of the closing date, the closing Volume Weighted
Average Price of the Registrant’s Common Stock is equal to or greater than
$30.00 per share for 20 consecutive trading days; provided that the shares
sold
in the offering and the shares underlying the warrants are freely tradable.
Item
9.01 Financial
Statements and Exhibits.
(c)
Exhibits
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10.1
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Agreement
and Plan of Merger dated as of September 20, 2005, by and among
CMHC
Systems, Inc., Hayes Acquisition Corp., Netsmart Technologies,
Inc. and
solely in the capacity of, and for the limited purpose of serving
as, the
Securities Holders’ Representative, John Paton.
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10.2
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Shareholders
Voting Agreement dated as of September 20, 2005, by and among Hayes
Acquisition Corp., Netsmart Technologies, Inc. and John Paton.
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99.1 |
Press
Release dated September 20,
2005
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SIGNATURE
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.
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NETSMART TECHNOLOGIES,
INC. |
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| Date:
September 21, 2005 |
By: |
/s/James
L. Conway |
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James
L. Conway |
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Chairman,
President Chief Executive
Officer
and Director (Principal
Executive
Officer)
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