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
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Financial Statements and Exhibits.
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99.1
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Notice dated April 12, 2016 from PhotoMedex, Inc., Radiancy, Inc., and PhotoMedex Technology, Inc. to DS Healthcare
Group, Inc.
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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.
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PHOTOMEDEX, INC.
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Dated: April 12, 2016
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By:
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/s/ Dolev
Rafaeli
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Dolev Rafaeli
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Chief Executive Officer
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EXHIBIT
INDEX
Exhibit
Number
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Description
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99.1
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Notice dated
April 12, 2016 from PhotoMedex, Inc., Radiancy, Inc., and PhotoMedex Technology, Inc. to DS Healthcare Group, Inc.
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