David Hirschhorn, Clearlake Capital Group LP, certain partners and co-investors (“acquisitionCo”) made a non-binding proposal to acquire First Physicians Capital Group, Inc. (OTCPK:FPCG) from Kupfer Family Trust and others for $7.1 million in cash on August 19, 2014. The acqusistionCo intends to acquire 100% stake at $0.36 per share. Outstanding warrants and options to purchase shares of First Physicians common stock will be cancelled if they are out of the money. Acquisition shall be funded with cash and the proposal required First Physicians to pay Clearlake Capital $0.25 million to commence due diligence. This due diligence fee would be non-refundable in the event First Physicians would decide not to proceed with a transaction. First Physicians would be obligated to pay a break-up fee of $1 million if it proceeded with another transaction.

The merger will be subject to approval by majority of First Physicians's and acquisitionCo shareholders, minimum tender of 60% of the shares and is also subject to due diligence. Also, the exclusivity provision would require First Physicians to postpone or abandon the reverse stock split. Letter of intent will automatically expire and definitive agreement is expected to be signed on October 15, 2014. The proposal and letter of intent will remain open to acceptance till August 28, 2014. On August 25, 2014, the Board reviewed the non-binding proposal and Board unanimously decided to not pursue the proposal outlined in the Clearlake Capital letter.

David Hirschhorn, Clearlake Capital Group LP, certain partners and co-investors cancelled the acquisition of First Physicians Capital Group, Inc. (OTCPK:FPCG) from Kupfer Family Trust and others on August 25, 2014.