NHP Terminates Agreement, Enters New Obligations, Board Changes

TL;DR

NHP just ditched an old deal, signed a new one with debt, and swapped out some execs/directors. Big changes brewing.

AI Summary

National Healthcare Properties, Inc. (NHP) announced on September 25, 2024, the termination of a material definitive agreement. The company also entered into a new direct financial obligation and an off-balance sheet arrangement. Additionally, NHP disclosed changes in its board of directors and certain officers, along with updates to compensatory arrangements.

Why It Matters

This filing indicates significant strategic and financial shifts for National Healthcare Properties, Inc., including new financial commitments and changes in leadership, which could impact its future operations and investor outlook.

Risk Assessment

Risk Level: medium — The termination of a material agreement and the creation of new financial obligations suggest potential financial restructuring or strategic pivots that carry inherent risks.

Key Players & Entities

• National Healthcare Properties, Inc. (company) — Filer
• Healthcare Trust, Inc. (company) — Former Company Name
• American Realty Capital Healthcare Trust II, Inc. (company) — Former Company Name

FAQ

Key Financial Figures

• $0.01 — e Redeemable Perpetual Preferred Stock, $0.01 par value per share HTIA The Nasdaq G
• $98,244,000 — rom the Company merger consideration of $98,244,000 and (ii) Advisor Parent received (x) an
• $10,916,000 — received (x) an asset management fee of $10,916,000, representing the aggregate Base Manag
• $3,920,000 — on and (y) a property management fee of $3,920,000, representing the aggregate Management
• $75,000,000 million — Parent aggregate cash consideration of $75,000,000 million (such cash amount, the " Closing Date C
• $30,266,668 — orm 8-K below) in a principal amount of $30,266,668.44, equal to the difference between the
• $1.625 million — f, composed of a fixed portion equal to $1.625 million per month and a variable portion equal
• $0.375 — sory Agreement ) per share in excess of $0.375 per share plus (2) 10.0% of the applica
• $0.47 — 's Core Earnings per share in excess of $0.47 per share. The information set forth i
• $800,000 — is entitled to an annual base salary of $800,000 and is eligible to participate in the C
• $400,000 — is entitled to a cash signing bonus of $400,000 (the " Signing Bonus "). However, in th
• $1.8 million — t grant date fair value of no less than $1.8 million and shall be made as soon as practicabl
• $600,000 — t $1.8 million with one third (equal to $600,000) vesting and payable on the last day of
• $2.0 million — n stock with a grant date fair value of $2.0 million based on the Company's most recent net
• $666,666.67 — d equal to $2.0 million with one third ($666,666.67) vesting and payable on the each of the

Filing Documents

• tm2425086d1_8k.htm (8-K) — 78KB
• tm2425086d1_ex3-1.htm (EX-3.1) — 9KB
• tm2425086d1_ex3-2.htm (EX-3.2) — 9KB
• tm2425086d1_ex3-3.htm (EX-3.3) — 3KB
• tm2425086d1_ex10-1.htm (EX-10.1) — 67KB
• tm2425086d1_ex10-2.htm (EX-10.2) — 152KB
• tm2425086d1_ex99-1.htm (EX-99.1) — 10KB
• tm2425086d1_ex99-1img002.jpg (GRAPHIC) — 2KB
• 0001104659-24-104019.txt ( ) — 643KB
• hti-20240925.xsd (EX-101.SCH) — 4KB
• hti-20240925_def.xml (EX-101.DEF) — 28KB
• hti-20240925_lab.xml (EX-101.LAB) — 38KB
• hti-20240925_pre.xml (EX-101.PRE) — 26KB
• tm2425086d1_8k_htm.xml (XML) — 7KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Promissory Note As described above, in connection with the consideration payable to the Advisor Parent under the Internalization Agreement, the Company issued the Promissory Note to Advisor Parent on the Closing Date. The Promissory Note is a senior unsecured obligation of the Company and ranks equal in right of payment with all of the Company's existing and future indebtedness . The Promissory Note bears interest per annum of Term SOFR (as defined in the Promissory Note) plus 1.25% until January 1, 2025 and Term SOFR plus 3.25% on and after January 1, 2025, with such interest payable monthly, and the Company shall make monthly payments of principal to the extent of its available cash existing on the applicable payment date beginning on January 2, 2025. The Company shall repay the outstanding principal balance and all accrued and unpaid interest on June 28, 2025 (the " Maturity Date "). The Promissory Note may be prepaid, in whole or in part, prior to the Maturity Date without any pre-payment penalties. The Promissory Note is subject to customary events of default, the occurrence of which shall allow the Advisor Parent to declare all amounts outstanding under the Promissory Note immediately due and payable. The issuance of the Promissory Note was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. A copy of the Promissory Note is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The disclosure set forth in this Item 1.01 is intended to be a summary only and is qualified in its entirety by reference to the Promissory Note.

02. Termination

Item 1.02. Termination of a Material Definitive Agreement. Termination of Second A&R Advisory Agreement Immediately following the Closing on the Closing Date, the Company and Advisor (now a wholly-owned subsidiary of the Company following the Internalization) terminated the Second A&R Advisory Agreement by mutual agreement. Pursuant to the Second A&R Advisory Agreement, the Advisor managed the Company's affairs on a day-to-day basis, and the Company was required to, among other things, reimburse the Advisor or its affiliates for the reasonable salaries and wages, benefits and overhead of the Company's executive officers and pay the Advisor (i) a base management fee, payable on the first business day of each month in cash, Common OP Units or shares, or a combination thereof, composed of a fixed portion equal to $1.625 million per month and a variable portion equal to one-twelfth of 1.25% of the cumulative net proceeds of any equity (subject to certain exceptions) issued by the Company and its subsidiaries, and (ii) a variable management/incentive fee quarterly in arrears equal to (x) the product of fully diluted shares of the Company's common stock (as defined below) outstanding multiplied by (y) (1) 15.0% of the applicable prior quarter's core earnings (as defined in the Second A&R Advisory Agreement ) per share in excess of $0.375 per share plus (2) 10.0% of the applicable prior quarter's Core Earnings per share in excess of $0.47 per share. The information set forth in Introductory Note of this Current Report on Form 8-K with respect to the Closing Payments, the termination of the Second A&R Advisory Agreement and the relationship between the Company and the Advisor Parent is incorporated by reference into this

03. Creation of

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant The information provided in Item 1.01 of this Current Report on Form 8-K relating to the Promissory Note is incorporated by reference into this Item 2.03.

02. Departure of

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Chief Executive Officer Employment Agreement In connection with the Internalization, on September 25 , 2024, Michael Anderson, the Company's Chief Executive Officer, and the Company entered into an employment agreement (the " Anderson Employment Agreement "), which sets forth the terms and conditions of his employment and is effective as of the Closing Date. Pursuant to the Anderson Employment Agreement, Mr. Anderson serves as our Chief Executive Officer and is entitled to an annual base salary of $800,000 and is eligible to participate in the Company's annual incentive program with a target annual bonus opportunity of 135% of his annual base salary (the " Target Annual Bonus "). Depending on results, Mr. Anderson's actual annual bonus may be higher or lower than the Target Annual Bonus, as determined by the Company's Compensation Committee (" Compensation Committee "), but for calendar years 2024 and 2025, Mr. Anderson's annual bonus shall be not less than the Target Annual Bonus. In addition, pursuant to the Anderson Employment Agreement, Mr. Anderson is entitled to a cash signing bonus of $400,000 (the " Signing Bonus "). However, in the event that Mr. Anderson's employment is terminated by the Company for Cause ( as defined in the Anderson Employment Agreement) or Mr. Anderson resigns without Good Reason ( as defined in the Anderson Employment Agreement) , in either case prior to December 31, 2025, Mr. Anderson shall, upon such termination, repay to the Company the full amount of the Signing Bonus. In addition, in connection with the entry of the Anderson Employment Agreement, as further described below, the Board appointed Mr. Anderson to the Board and expects to nominate Mr. Anderson to be reelected as a director at the Company's annual shareholder meeting in Fiscal 2025 (" 2025 Annual Meeting ").

03. Amendments

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year Reverse Stock Split On September 26, 2024, following approval by the Company's Board of Directors (the " Board ") and in accordance with Maryland General Corporate Law (" MGCL "), the Company filed Articles of Amendment (the " Reverse Stock Split Charter Amendment ") to the Company's articles of amendment and restatement (as amended to date, the " Charter ") with State Department of Assessments and Taxation of Maryland (" SDAT ") to effect a reverse stock split of the Company's common stock, par value $0.01 per share (the " common stock "), at a ratio of 1-for-4, which became effective at 12:01 a.m. Eastern time on September 30, 2024 (the " Reverse Stock Split "). As a result of the Reverse Stock Split, the par value of the common stock adjusted to $0.04 per share. Pursuant to Section 2-309 of the MGCL, the Reverse Stock Split did not require approval of the Company's stockholders and will not affect the rights of the Company's security holders. Name Change and Common Stock Par Value Adjustment On September 26, 2024, following approval by the Board and immediately following the filing of the Reverse Stock Split Charter Amendment, the Company filed Articles of Amendment (the " Second Charter Amendment ") to the Company's Charter with SDAT to (i) change the Company's name to National Healthcare Properties, Inc. from Healthcare Trust, Inc. (the " Name Change ") and (ii) adjust the par value of the Company's common stock back to $0.01 per share following the Reverse Stock Split (the " Par Value Adjustment "). The Name Change and the Par Value Adjustment became effective at 12:05 a.m. Eastern time on September 30, 2024. Pursuant to Section 2-605 of the MGCL, neither the Name Change or Par Value Adjustment required approval of the Company's stockholders and will not affect the rights of the Company's security holders. In connection with the Name Change, the Company, as the ge

01. Financial Statements

Item 9.01. Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 3.1 Articles of Amendment to the Company's Charter, filed September 26, 2024 (Reverse Stock Split) 3.2 Articles of Amendment to the Company's Charter, filed September 26, 2024 (Name Change and Par Value Adjustment) 3.3 Amendment No. 3 to the Amended and Restated Bylaws of the Company, effective as of September 30, 2024 10.1 Promissory Note 10.2# Employment Agreement, dated September 25, 2024, by and between the Company and Michael Anderson 99.1 Press Release, dated September 30, 2024 . 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL # Indicates management contract or compensatory plan or arrangement.

SIGNATURES

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. NATIONAL HEALTHCARE PROPERTIES, INC. Date: September 30 , 2024 By: /s/ Scott M. Lappetito Scott M. Lappetito Chief Financial Officer, Secretary and Treasurer

View Full Filing

View this 8-K filing on SEC EDGAR