Foundation Healthcare Hopes to IPO on NYSE after $20MM+ Loss Post Reverse Merger

After performing a reverse merger with Graymark Healthcare in 2013, Foundation Healthcare has been producing very poorly. The loss for 2013 totaled $20.4MM while the loss for the first half of 2014 hit $3.4MM. Analysts are not hopeful they will be able to pull out of it anytime soon. Yet the company is hopeful they can pull a rabbit out of the hat to get transitioned from the OTC over to NYSE and raise $15MM in the process. The company has the following plans for the proceeds:

  • General working capital requirements
  • Purchase controlling interest in the ambulatory service centers it currently manages
  • Make other add-on acquisitions
  • Other “general corporate purposes”

Further from the company’s statement on the issues:

We have incurred significant operating losses since the Foundation Acquisition and although we anticipate generating operating income in the near future, our operating losses could continue. In addition, our auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain further financing.

The struggle is that initial trading on the NYSE requires stock at a minimum of the $2 level and stock maintenance thereafter at least at the $1 level. FDNH is currently trading at less than $0.50. While the market was soft yesterday, things are still frothy enough that they may be able to pull out the hat trick on this one. Time will tell.

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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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