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Subsequent Events
3 Months Ended
Mar. 31, 2013
Subsequent Events [Abstract]  
SUBSEQUENT EVENT

NOTE 10 – SUBSEQUENT EVENTS

Other than the changes in our outstanding debt instruments described in Notes 3 and 4, no events were identified that in our opinion require accounting recognition or disclosure in these financial statements, with the exception of the following:

Senior Secured Revolving Credit Facility

On May 3, 2013, we entered into a Senior Secured Revolving Credit Facility Agreement that will allow us to borrow up to $5,000,000 to fund our general working capital needs. Our initial draw on the credit facility occurred May 3, 2013 in the amount of approximately $884,000, which represents an initial draw of $1 million less transaction expenses. The credit facility is guaranteed by the current and future assets of CompCare and its subsidiaries, with the exception of our Puerto Rico subsidiary. Borrowings under the credit facility will bear interest at an annual rate of 12%, payable weekly. The credit facility will mature on November 3, 2013, at which time we may request an extension of the maturity date for an additional six month period provided that we are not in default in any respect, which may be accepted or rejected by the lender in its sole discretion.

The Agreement contains financial covenants such as, but not limited to, minimum revenues, positive earnings before interest, tax, depreciation and amortization expenses, and loan-to-value ratio. The Agreement also specifies events of default and related remedies, including acceleration and increased interest rates following an event of default. Loans under the credit facility will be evidenced by a Revolving Convertible Promissory Note. At any time while the Note remains outstanding, subject to certain limitations, the lender may convert all or any portion of the outstanding principal, accrued but unpaid interest and other sums payable under the Note into shares of our common stock at a price equal to (i) the amount to be converted, divided by (ii) 85% of the lowest daily volume weighted average price of our common stock during the five business days immediately prior to the conversion date.

As consideration for investment banking and advisory services provided to us by the lender, we paid a fee to the lender in the form of 1,470,588 shares of our common stock, issued on May 8, 2013. The shares and the Note were issued by the Company upon reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended, provided in Section 4(2) thereof.

Warrant issuance

On April 11, 2013, we issued warrants to purchase 2,000,000 shares of our common stock to a company in lieu of cash compensation for consulting and pharmacy analytical services. The warrants, which expire in April 2016, were vested in full at issuance and can be exercised at a price of $0.20 per share.