SALE OF COMPREHENSIVE BEHAVIORAL CARE, INC

12 Months Ended

Dec. 31, 2014

Sale Of Comprehensive Behavioral Care Inc

SALE OF COMPREHENSIVE BEHAVIORAL CARE, INC

Note 11 SALE OF COMPREHENSIVE BEHAVIORAL CARE, INC

On December 30, 2013, The Company sold its wholly-owned subsidiary, Comprehensive Behavioral Care, Inc. (“CBC”). The sales price was $100.00 and the buyer received all of the issued and outstanding equity of CBC. As part of the transaction, the Company was entitled to receive any sums owing or payable to the Company or its subsidiaries for work or event occurring prior to the date of the sale. On January 1, 2014, the Company and CBC entered into an arrangement whereby the Company agreed to provide administrative services only for contracts held by CBC. These services consisted of the performance of clinical management, utilization management, claims administration, intensive case management, discharge planning and referral. In return CBC agreed to pay a monthly fee based on the number of employees/members covered on a client by client basis. The initial term is three years with provisions for subsequent one year renewals that has occurred every year since since commencement. Also on January 1, 2014, the Company and CBC entered into an agreement whereby the Company could lease the access to the Network Providers. The initial term was two years with provisions for subsequent one year term renewals. The Company agreed to pay a fixed rate per member, per month.

Pursuant to the terms of the sale, the existing receivables of the Company went to the acquirer with the exception of the outstanding Accounts receivable at the date of sale for a total consideration of $100. The Company recorded a gain on sale of CBC of $9,270,336 as follows:

Cash received on sale	$	100
Assets and liabilities transferred to purchaser
Accounts payable		891,725
Accrued claims payable		9,557,575
Other accrued expenses		767,725
Other current assets		(32,719	)
Property and equipment – net		(61,670	)
Other long-term assets		(153,122	)
Total net transfer		10,969,715
Gain on sale	$	10,969,615