Blog: DIGITAL HEALTH ACQUISITION CORP. : Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 1.01 Entry into a Material Definitive Agreement

Business Combination Agreement

On June 15, 2022, Digital Health Acquisition Corp. (“DHAC” or the “Company”),
entered into a business combination agreement, by and among DHAC Merger Sub I,
Inc., a Delaware corporation and a wholly owned subsidiary of DHAC (“Merger Sub
I”), DHAC Merger Sub II, Inc., a Texas corporation and a wholly owned subsidiary
of DHAC (“Merger Sub II” and together with Merger Sub I, the “Merger Subs”),
VSee Lab, Inc., a Delaware corporation (“VSee”) and iDoc Virtual Telehealth
Solutions, Inc., a Texas corporation (“iDoc”) (as it may be amended,
supplemented or otherwise modified from time to time, the “Business Combination
Agreement”). The Business Combination Agreement and the transactions
contemplated thereby (collectively, the “Business Combination”) were unanimously
approved by the boards of directors of each of DHAC, VSee and iDoc on June 15,
2022. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to such terms in the Business Combination Agreement.

Pursuant to the Business Combination Agreement and subject to the terms and
conditions set forth therein, Merger Sub I will merge with and into VSee (the
“VSee Merger”), with VSee surviving the VSee Merger as a wholly owned subsidiary
of DHAC, and Merger Sub II will merge with and into iDoc (the “iDoc Merger” and,
together with the VSee Merger, the “Mergers”), with iDoc surviving the iDoc
Merger as a wholly owned subsidiary of DHAC. At the effective time of the
Mergers (the “Effective Time”), DHAC will change its name to VSee Health, Inc.

Treatment of VSee and iDoc Securities in the Business Combination

VSee Preferred Stock. The Business Combination Agreement provides that, among
other things, immediately prior to the Effective Time, (i) each share of VSee
Series A Preferred Stock that is issued and outstanding immediately prior to the
Effective Time will be converted into a number of shares of VSee common stock,
par value $0.0001 per share (“VSee Common Stock”), at the then-effective
conversion rate as calculated pursuant to and in accordance with the terms of
the VSee Amended and Restated Certificate of Incorporation; and (ii) each share
of VSee Series A-1 Preferred Stock (together with the VSee Series A Preferred
Stock, the “VSee Preferred Stock”) that is issued and outstanding immediately
prior to the Effective Time will be automatically converted immediately prior to
the Effective Time into a number of shares of VSee Common Stock at the
then-effective conversion rate as calculated pursuant to and in accordance with
the terms of the VSee Amended and Restated Certificate of Incorporation.

VSee Common Stock. At the Effective Time, each share of VSee Common Stock that
is issued and outstanding immediately prior to the Effective Time, which
includes the VSee Preferred Stock converted to VSee Common Stock immediately
prior to the Effective Time (other than any shares of VSee Common Stock held by
dissenting stockholders), will be automatically canceled and extinguished and
converted into the right to receive the VSee Per Share Cash Consideration and
the VSee Per Share Stock Consideration. The “VSee Per Share Cash Consideration”
means the VSee Cash Consideration divided by the aggregate number of shares of
VSee Common Stock outstanding as of the Effective Time. The “VSee Per Share
Stock Consideration means a number of shares of DHAC Common Stock equal to (a)
(1) the VSee Stock Consideration, divided by (2) the aggregate number of shares
of VSee Common Stock outstanding as of the Effective Time, divided by (b) 10.
The “VSee Cash Consideration” means 20% of the VSee Closing Consideration and
the “VSee Stock Consideration” means 80% of the fair market value (determined as
of the Effective Time) of the VSee Closing Consideration. “VSee Closing
Consideration” means (1) $60,500,000, minus (2) an amount equal to a number of
stock options exercisable for DHAC Common Stock granted to certain VSee
individuals at the Effective Time multiplied by the $10, minus (3) the aggregate
amount of VSee’s transaction expenses. 55% of the Distributable Cash will be
paid (x) first, to the escrow agent as payment of the VSee indemnity escrow
amount (which is 10% of the VSee Cash Consideration), and (y) thereafter, to the
VSee stockholders pro rata in accordance with the shares of VSee Common Stock
outstanding as of the Effective Time, until the aggregate proceeds received by
the VSee stockholders equals the VSee Cash Consideration (minus the VSee
indemnity escrow amount). If the VSee Distributable Cash is less than the VSee
Cash Consideration, the balance will be paid in DHAC convertible notes.
“Distributable Cash” means the excess, if any, of the Aggregate Transaction
Proceeds, defined to mean the sum of the aggregate cash proceeds available from
the DHAC trust account (after giving effect to any redemptions by DHAC’s public
stockholders) and (ii) the aggregate proceeds from any PIPE financing, over
$10,000,000.

iDoc Common Stock. At the Effective Time, each share of iDoc common stock, par
value $1 per share (“iDoc Common Stock”), that is issued and outstanding
immediately prior to the Effective Time (other than any shares of iDoc Common
Stock held by dissenting stockholders), will be automatically canceled and
extinguished and converted into the right to receive the iDoc Per Share Cash
Consideration and the iDoc Per Share Stock Consideration. The “iDoc Per Share
Cash Consideration” means the iDoc Cash Consideration divided by the aggregate
number of shares of iDoc Common Stock outstanding as of the Effective Time. The
“iDoc Per Share Stock Consideration means a number of shares of DHAC Common
Stock equal to (a) (1) the iDoc Stock Consideration, divided by (2) the
aggregate number of shares of iDoc Common Stock outstanding as of the Effective
Time, divided by (b) 10. The “iDoc Cash Consideration” means 20% of the iDoc
Closing Consideration and the “iDoc Stock Consideration” means 80% of the fair
market value (determined as of the Effective Time) of the iDoc Closing
Consideration. “iDoc Closing Consideration” means (1) $49,500,000, minus (2) the
aggregate amount of iDoc’s transaction expenses. 45% of the Distributable Cash
will be paid (x) first, to the escrow agent as payment of the iDoc indemnity
escrow amount (which is 10% of the iDoc Cash Consideration), and (y) thereafter,
to the iDoc stockholders pro rata in accordance with the shares of iDoc Common
Stock outstanding as of the Effective Time, until the aggregate proceeds
received by the iDoc stockholders equals the iDoc Cash Consideration (minus the
iDoc indemnity escrow amount). If the iDoc Distributable Cash is less than the
iDoc Cash Consideration, the balance will be paid in DHAC convertible notes.

VSee Stock Options. On or prior to the Effective Time, VSee will take all
actions necessary to terminate all options to purchase shares of VSee Common
Stock and any other awards (collectively, the “VSee Options”) granted under the
VSee Lab, Inc. 2008 Stock Plan as amended through July 20, 2021 (the “VSee
Equity Plan”) that are outstanding immediately prior to the Effective time,
whether vested or unvested, and such VSee Options will cease to represent the
right to purchase VSee Common Stock as of the Effective Time.

DHAC Convertible Notes. Any DHAC convertible notes issued to VSee and iDoc
stockholders as described above will be convertible at the option of the holder
into shares of DHAC Common Stock at a conversion price of $10 per share, bear no
interest and will mature in one year unless earlier converted.

Representations and Warranties

The Business Combination Agreement contains customary representations and
warranties of the parties thereto with respect to, among other things, (a)
entity organization, good standing and qualification, (b) capital structure, (c)
authorization to enter into the Business Combination Agreement, (d) compliance
with laws and permits, (e) taxes, (f) financial statements and internal
controls, (g) real and personal property, (h) material contracts, (i)
environmental matters, (j) absence of changes, (k) employee matters, (l) product
liability, (m) litigation, and (n) brokers and finders.



Covenants


The Business Combination Agreement includes customary covenants of the parties
with respect to operation of their respective businesses prior to consummation
of the Mergers and efforts to satisfy conditions to consummation of the Mergers.
The Business Combination Agreement also contains additional covenants of the
parties, including, among others, covenants providing for DHAC, VSee and iDoc to
use reasonable best efforts to cooperate in the preparation of the registration
statement on Form S-4 relating to transactions contemplated by the Business
Combination Agreement containing a prospectus and proxy statement of DHAC (the
“Registration Statement / Proxy Statement”) that is required to be filed in
connection with the Mergers and to obtain all requisite approvals of their
respective stockholders including, in the case of DHAC, the Incentive Plan (as
defined below).

The Business Combination Agreement provides that on or prior to the closing, the
parties will enter into PIPE subscription agreements related to the PIPE
financing, a registration rights agreement to provide registration rights with
respect to the shares of DHAC Common Stock issuable upon conversion of the DHAC
convertible notes, a lock up agreement, and an escrow agreement, in forms agreed
to by the parties. In addition, prior to the closing, VSee will complete a short
form merger of one of its subsidiaries, This American Doc, Inc. with and into
VSee with VSee surviving.




VSee Health, Inc. Incentive Plan
. . .


Item 7.01 Regulation FD Disclosure.

On June 16, 2022, DHAC, VSee, and iDoc, issued a joint press release announcing
the execution of the Business Combination Agreement. A copy of the press release
is furnished hereto as Exhibit 99.1.

The information in this Item 7.01 and Exhibits 99.1, attached hereto shall not
be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise
subject to the liabilities of that section, nor shall it be deemed incorporated
by reference in any filing under the Securities Act or the Exchange Act, except
as expressly set forth by specific reference in such filing.

Important Information for Investors and Stockholders

This document relates to a proposed transaction between DHAC, VSee and iDoc.
This document does not constitute an offer to sell or exchange, or the
solicitation of an offer to buy or exchange, any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer, sale or exchange
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. DHAC intends to file a registration statement on
Form S-4 with the SEC, which will include a document that serves as a proxy
statement, prospectus, and consent solicitation of DHAC, referred to as a proxy
statement/prospectus/consent solicitation. A proxy statement/prospectus/consent
solicitation will be sent to all DHAC stockholders. DHAC also will file other
documents regarding the proposed transaction with the SEC. Before making any
voting decision, investors and security holders of DHAC are urged to read the
registration statement, the proxy statement/prospectus/consent solicitation and
all other relevant documents filed or that will be filed with the SEC in
connection with the proposed transaction as they become available because they
will contain important information about the proposed transaction.

Investors and security holders will be able to obtain free copies of the
registration statement, the proxy statement/prospectus/consent solicitation and
all other relevant documents filed or that will be filed with the SEC by DHAC
through the website maintained by the SEC at http://www.sec.gov.

Participants in the Solicitation

The Company and its directors and executive officers may be deemed participants
in the solicitation of proxies from the Company’s shareholders with respect to
the Business Combination. You can find information about DHAC’s directors and
executive officers and their ownership of DHAC’s securities in DHAC’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed
with the SEC on March 29, 2022, and is available free of charge at the SEC’s web
site at http://www.sec.gov. Additional information regarding the interests of such
participants will be contained in the Registration Statement when available.

VSee, iDoc and their respective directors and executive officers may also be
deemed to be participants in the solicitation of proxies from the shareholders
of the Company in connection with the Business Combination. A list of the names
of such directors and executive officers and information regarding their
interests in the Business Combination will be contained in the Registration
Statement when available.




Forward-Looking Statements



This Current Report on Form 8-K includes “forward-looking statements” within the
meaning of the “safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995. The Company’s, VSee’s and iDoc’s actual results may differ
from their expectations, estimates and projections and consequently, you should
not rely on these forward looking statements as predictions of future events.
Words such as “expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,”
“predicts,” “potential,” “continue,” and similar expressions (or the negative
versions of such words or expressions) are intended to identify such
forward-looking statements.

These forward-looking statements include, without limitation, the Company’s,
VSee’s and iDoc’s expectations with respect to future performance and
anticipated financial impacts of the Business Combination, the satisfaction of
the closing conditions to the Business Combination and the timing of the
completion of the Business Combination. These forward-looking statements involve
significant risks and uncertainties that could cause the actual results to
differ materially from the expected results. Most of these factors are outside
the Company’s, VSee’s and iDoc’s control and are difficult to predict. Factors
that may cause such differences include, but are not limited to: (1) the ability
of DHAC, VSee and iDoc to meet the closing conditions in the Business
Combination Agreement, including due to failure to obtain approval of the
shareholders of DHAC, VSee and iDoc or certain regulatory approvals, or failure
to satisfy other conditions to closing in the Business Combination Agreement;
(2) the occurrence of any event, change or other circumstances, including the
outcome of any legal proceedings that may be instituted against DHAC, VSee and
iDoc following the announcement of the Business Combination Agreement and the
transactions contemplated therein, that could give rise to the termination of
the Business Combination Agreement or could otherwise cause the transactions
contemplated therein to fail to close; (3) the inability to obtain or maintain
the listing of the combined company’s common stock on the Nasdaq Capital Market,
as applicable, following the Business Combination; (4) the risk that the
Business Combination disrupts current plans and operations as a result of the
announcement and consummation of the Business Combination; (5) the inability to
recognize the anticipated benefits of the Business Combination, which may be
affected by, among other things, competition and the ability of the combined
company to grow and manage growth profitably and retain its key employees; (6)
costs related to the Business Combination; (7) changes in applicable laws or
regulations; (8) the inability of the combined company to raise financing in the
future; (9) the success, cost and timing of VSee’s, iDoc’s and the combined
company’s product development activities; (10) the inability of VSee, iDoc or
the combined company to obtain and maintain regulatory approval for their
products, and any related restrictions and limitations of any approved product;
(11) the inability of VSee, iDoc or the combined company to identify, in-license
or acquire additional technology; (12) the inability of VSee, iDoc or the
combined company to maintain VSee’s or iDoc’s existing or future license,
manufacturing, supply and distribution agreements; (13) the inability of VSee,
iDoc or the combined company to compete with other companies currently marketing
or engaged in the development of products and services that VSee or iDoc is
currently marketing or developing; (14) the size and growth potential of the
markets for VSee’s, iDoc’s and the combined company’s products and services, and
each of their ability to serve those markets, either alone or in partnership
with others; (15) the pricing of VSee’s, iDoc’s and the combined company’s
products and services and reimbursement for medical procedures conducted using
VSee’s, iDoc’s and the combined company’s products and services; (16) VSee’s,
iDoc’s and the combined company’s estimates regarding expenses, future revenue,
capital requirements and needs for additional financing; (17) VSee’s, iDoc’s and
the combined company’s financial performance; and (18) the impact of COVID-19 on
VSee’s and iDoc’s businesses and/or the ability of the parties to complete the
Business Combination. The foregoing list of factors is not exclusive. Additional
information concerning certain of these and other risk factors is contained in
DHAC’s most recent filings with the SEC, including DHAC’s Prospectus, filed with
the SEC on November 4, 2021. These filings identify and address other important
risks and uncertainties that could cause actual events and results to differ
materially from those contained herein. All subsequent written and oral
forward-looking statements concerning DHAC, VSee or iDoc, the transactions
described herein or other matters attributable to DHAC, VSee, iDoc, or any
person acting on their behalf are expressly qualified in their entirety by the
cautionary statements above. Readers are cautioned not to place undue reliance
upon any forward-looking statements, which speak only as of the date made. Each
of DHAC, VSee or iDoc expressly disclaims any obligations or undertaking to
release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in their expectations with respect
thereto or any change in events, conditions, or circumstances on which any
statement is based, except as required by law.



No Offer or Solicitation


This Current Report on Form 8-K shall not constitute a solicitation of a proxy,
consent or authorization with respect to any securities or in respect of the
Business Combination. This Current Report on Form 8-K shall also 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 states or jurisdictions in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting the
requirements of the Securities Act.

Item 9.01 Financial Statements and Exhibits.




(d) Exhibits:



Exhibit    Description
  2.1        Business Combination Agreement, dated as of June 15, 2022, by and
           among Digital Health Acquisition Corp., DHAC Merger Sub I, DHAC Merger
           Sub II, VSee Lab, Inc., and iDoc Virtual Telehealth Solutions, Inc.

  10.1       Transaction Support Agreement dated June 15, 2022 by and among
           Digital Health Acquisition Corp., VSee Lab, Inc., iDoc Virtual
           Telehealth Solutions, Inc. and certain stockholders of VSee and iDoc

  10.2       Support Agreement dated June 15, 2022 by and among Digital Health
           Sponsor LLC, certain other stockholders of Digital Health Acquisition
           Corp., Digital Health Acquisition Corp., VSee Lab, Inc., and iDoc
           Virtual Telehealth Solutions, Inc.

  99.1       Press Release issued by Digital Health Acquisition Corp., VSee Lab,
           Inc., and iDoc Virtual Telehealth Solutions, Inc. dated June 16, 2022

104        Cover Page Interactive Data File (embedded within the Inline XBRL
           document)

© Edgar Online, source Glimpses

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