Deal sells one-year 8% junior secured notes with five-year warrants
By Devika Patel
Knoxville, Tenn., April 7 - Healthcare Corp. of America completed a $1 million private placement of 8% junior secured convertible notes on April 4, according to an 8-K filed Monday with the Securities and Exchange Commission.
The note matures in one year on April 2, 2015 and is convertible into common stock at the lowest price per share of the securities sold in the company's next financing. The notes may be prepaid.
The investors also received warrants for two million shares, which are each exercisable for five years. The strike price will be equal to either the price of the equity sold in the company's next financing, the conversion price of a convertible note sold after the company's next financing, or the exercise price of the warrants issued in the company's next financing.
Selway Capital Holdings LLC invested $900,000.
Proceeds will be used for general working capital purposes.
The pharmacy-benefit manager is based in Denville, N.J.
| Issuer: | Healthcare Corp. of America
|
| Issue: | Junior secured convertible notes
|
| Amount: | $1 million
|
| Maturity: | April 2, 2015
|
| Coupon: | 8%
|
| Call: | Yes
|
| Warrants: | For 2 million shares
|
| Warrant expiration: | Five years
|
| Investor: | Selway Capital Holdings LLC (for $900,000)
|
| Announcement date: | April 7
|
| Settlement date: | April 4
|
| Stock symbol: | OTCBB: SWCLE
|
| Stock price: | $6.84 at close April 4
|
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