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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 2, 2006
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Dynacq Healthcare, Inc.
(Exact name of registrant as specified in its charter)
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Delaware 000-21574 76-0375477
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
10304 Interstate 10 East, Suite 369
Houston, Texas 77029
(Address of principal executive offices and zip code)
(713) 378-2000
(Registrant's telephone number, including area code)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 8.01 Other Events
Dynacq Healthcare, Inc. ("Dynacq") owns a 70% equity interest in Shanghai
DeAn Hospital, a joint venture formed under the laws of the Peoples Republic of
China (the "DeAn Joint Venture"). On May 16, 2005, the DeAn Joint Venture
entered into land use agreements with the Chinese government, under which it
leased, for a term of 50 years, approximately 28.88 acres of government-owned
land in Shanghai, China on which a hospital is being constructed to be owned and
operated by the DeAn Joint Venture.
Dynacq was required to make a contribution to the DeAn Joint Venture of
approximately $2.11 million on June 2, 2006 (previously reported to be due March
31, 2006). That payment was not made, resulting in a technical default under the
Joint Venture Agreement. Dynacq has received no notice of default under the
Joint Venture Agreement or demand for this payment, and the Chinese government
has not yet made payments due by it under the Joint Venture Agreement. The
remedies for failure to make a payment under the Joint Venture Agreement are
that the venturer will lose its right to vote on joint venture matters and may
need to provide additional capital in order for the joint venture to maintain
its qualification to do business. Dynacq is negotiating with the Chinese
government for a new time table for the payment by both joint venturers of the
amounts due under the Joint Venture Agreement. As a result of this delay in
making capital contributions under the DeAn Joint Venture, the completion of
construction of the hospital will be delayed.
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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.
Dynacq Healthcare, Inc.
By: /s/ Philip S. Chan
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Philip S. Chan,
Chief Financial Officer
Date: June 8, 2006