UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 22, 2015
Catasys, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
001-31932 |
88-0464853 | ||
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(State or other jurisdiction |
(Commission File Number) |
(IRS Employer |
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11601 Wilshire Boulevard, Suite 1100 Los Angeles, California |
90025 | |
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(Address of principal executive offices) |
(Zip Code) | |
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Registrant’s telephone number, including area code (310) 444-4300 | ||
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(Former name or former address, if changed since last report.) | ||
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 (see General Instructions A.2. below):
☐ 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 1.01 |
Entry into a Material Definitive Agreement. |
On July 22, 2015, Catasys, Inc. (the “Company”) entered into a Promissory Note with Crede CG III, Ltd. (“Crede”), an affiliate of the Company’s Chairman and Chief Executive Officer, pursuant to which the Company received gross proceeds of $3.35 million from Crede for the sale of $3.35 million in principal amount (the “Promissory Note”). The Promissory Note is due on August 21, 2015 and carries an interest rate on any unpaid principal amount of 8% per annum until the maturity date, after which the interest rate will increase to 12% per annum. The closing of the Promissory Note occurred on July 22, 2015. The Company and Crede are currently negotiating a longer term financing.
The Company used approximately $2.2 million of the net proceeds of this transaction to redeem its outstanding 12% Original Issue Discount Convertible Debenture due January 18, 2016 issued on April 17, 2015 (the “Bridge Notes”), as disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 21, 2015. Following such redemption, all of the Bridge Notes are extinguished. The remaining net proceeds will be used for working capital.
The foregoing description of the Promissory Note does not purport to be complete and is qualified in its entirety by reference to the Promissory Note, a form of which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
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Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information contained in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference.
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Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
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Exhibit Number |
Description | |
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Exhibit 4.1 |
Form of 8% Promissory Note, dated July 22, 2015. |
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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CATASYS, INC. | |
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Date: July 24, 2015 |
By: |
/s/ SUSAN E. ETZEL | |
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Susan E. Etzel |
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Chief Financial Officer |
Exhibit 4.1
this note HAs NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION. this note MAY NOT BE OFFERED, SOLD, PLEDGED, OR TRANSFERRED in the absence of such registration or AN EXEMPTION THEREFROM IS AVAILABLE AND THAT SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH the act aND THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
PROMISSORY NOTE
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$3,350,000 |
Issue Date: July 22, 2015 |
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Los Angeles, CA |
FOR VALUE RECEIVED, and subject to the terms and conditions set forth in this Promissory Note ("Note"), Catasys, Inc. (the "Payor"), hereby unconditionally promises to pay to the order of Crede CG III, Ltd. or its assigns (the "Payee"), in lawful money of the United States of America in immediately available funds, at such location as the Payee shall designate in writing, $3,350,000, on the date thirty (30) days after the date hereof, or if such a date is not a business day, then the next succeeding business day (the "Maturity Date"), and to pay interest on the unpaid principal amount hereof at the rates specified below on the Maturity Date.
The Payor further agrees to pay interest to the Payee on the unpaid principal amount hereof from the date hereof at a rate per annum equal to 8% until the Maturity Date, and thereafter, until payment in full of the principal amount hereof (whether before or after judgment) at a rate per annum equal to 12%. Interest shall be payable on the Maturity Date, on the date of any prepayment and, after the Maturity Date, on demand.
The Payor may prepay the principal amount of this Note in whole or in part at any time or from time to time without premium or penalty; provided that each prepayment shall be accompanied by payment of accrued interest to the date of prepayment.
Upon the commencement by or against the Payor of any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar proceeding of any jurisdiction relating to the Payor or its debts, the unpaid principal amount hereof shall become immediately due and payable without presentment, demand, protest or notice of any kind in connection with this Note.
The Payee is hereby authorized to record all loans and advances made by it to the Payor (all of which shall be evidenced by this Note), and all repayments or prepayments thereof, in its books and records, such books and records constituting prima facie evidence of the accuracy of the information contained therein.
The Payor hereby waives diligence, presentment, demand, protest or notice of any kind in connection with this Note. All payments under this Note shall be made without offset, counterclaim or deduction of any kind.
This Note shall be binding upon the Payor and its successors and assigns, and the terms and provisions of this Note shall inure to the benefit of the Payee and its successors and assigns, including subsequent holders hereof. The Payor's obligations under this Note may not be assigned without the prior written consent of the Payee.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF [NEW YORK].
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Note as of the date first above written.
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Catasys, Inc. as Payor | |
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By: /s/ Susan Etzel
Name: Susan Etzel Title: CFO |
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Crede CG III, Ltd. as Payee | |
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By: /s/ Terren Peizer
Name: Terren Peizer Title: Managing Director |
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