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) December 14, 2015
| FIRST CHOICE HEALTHCARE SOLUTIONS, INC. |
| (Exact name of registrant as specified in its charter) |
| Delaware | 000-53012 | 90-0687379 |
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |
|
709 S. Harbor Blvd., Suite 250, Melbourne, FL |
32901 |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code (321) 725-0090
(Former name of 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:
| ☐ | 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 December 14, 2015, First Choice Medical Group of Brevard, LLC (“FCMG”), a wholly owned subsidiary of First Choice Healthcare Solutions, Inc. (the “Company”) and CT Capital, LTD (“CT”) entered into a Modification Agreement (“Modification”) amending the Loan and Security Agreement dated June 13, 2013 (the “Loan Agreement”). The Modification Agreement increased FCMG’s accounts receivable line of credit from $2,000,000 to $2,500,000 and extended the maturity date of the Loan Agreement to June 30, 2017 (“Maturity Date”). In addition, the Company agreed to maintain an outstanding balance of not less than $1,000,000 until the Maturity Date (“Minimum Borrowing”) and provide sixty (60) days prior written notice to prepay up to $1,000,000 of the outstanding indebtedness in excess of the Minimum Borrowing. All of the other terms and conditions of the Loan Agreement remain in full force and effect.
In consideration of the $500,000 increase in the accounts receivable line of credit, the Company issued to CT 100,000 shares of its common stock, which were issued pursuant to an exemption to the registration requirements of the Securities Act of 1933, as amended. The $500,000 increase may be repaid by the Company at any time, and is not subject to the conversion provisions set forth in the Loan Agreement.
| Item 7.01 | Regulation FD Disclosure |
On December 18, 2015, the Company issued a press release announcing the modification of the Loan and Security Agreement with CT Capital, LTD. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein. In accordance with General Instructions B.2 of Form 8-K, Exhibit 99.1 hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits: | |
| Exhibit No. | Description | |
| 10.1 | Modification Agreement dated as of December 14, 2015 relating to the CT Capital, LTD Loan and Security Agreement | |
| 99.1 | Press Release – December 18, 2015 |
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SIGNATURE
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.
| FIRST CHOICE HEALTHCARE SOLUTIONS, INC. | |
| (Registrant) | |
| Date: December 18, 2015 | |
| /s/ Chris Romandetti | |
| Name: Chris Romandetti | |
| Chief Executive Officer |
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Exhibit 10.1
AGREEMENT TO MODIFY LOAN AND SECURITY AGREEMENT DATED JUNE 13, 2013
WHEREAS, CT Capital, LTD ("CT") entered into the Loan and Security Agreement, dated June 13, 2013, with First Choice Medical Group of Brevard, LLC ("FCMG") pursuant to which CT made a loan available to FCMG with a maturity date of December 31, 2016 (the "Loan");
WHEREAS, FCMG is a wholly owned subsidiary of FCID Medical, Inc. ("FCID") and FCID is a wholly owned subsidiary of First Choice Healthcare Solutions, Inc. ("FCHS") and with FCID and FCMG, (the "Parties");
WHEREAS, FCMG modified the annual interest rate on the Loan from 12% to 6% on November 11, 2013;
WHEREAS, FCMG modified the Maximum Line of Credit from $1,500,000 to $2,000,000 on June 9, 2015.
WHEREAS, FCMG desires to modify the Maximum Line of Credit from $2,000,000 to $2,500,000, and extend the maturity date to June 30, 2017.
WHEREAS CT desires to modify the Maximum Line of Credit from $2,000,000 to $2,500,000, extend the maturity date to June 30, 2017, limit the right of FCID and FCMG to prepay the credit loan so that the principal balance outstanding loan shall not be less than $1,000,000 until the Maturity Date (“Minimum Borrowing”), provide for sixty (60) days prior written notice to prepay up to $1,000,000 of the outstanding indebtedness in excess of the Minimum Borrowing and having (i) all other terms on the loan remain the same, and (ii) consent to FCID and FCMG guaranteeing the Loan Transaction and consent to the filing of UCC financing statements that list FCHS, FCMG and FCID as debtors as required by the Loan Transaction;
NOW, THEREFORE, in consideration of the terms and conditions herein contained, and for good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
1) The paragraph above are integral to this Agreement and are hereby incorporated herein and made a part hereof.
2) CT agrees (i) to modify the Maximum Line of Credit from $2,000,000 to $2,500,000, (ii) extend the maturity date to June 30, 2017, (iii) limit the right of FCID and FCMG to prepay the credit loan so that the principal balance outstanding loan shall not be less than $1,000,000 until the Maturity Date (“Minimum Borrowing”), (iv) provide for sixty (60) days prior written notice to prepay up to $1,000,000 of the outstanding indebtedness in excess of the Minimum Borrowing (v) to consent to the Loan Transaction, (vi) to consent to FCID and FCMG guaranteeing the Loan Transaction, such guarantee being subordinate in priority to CT, and (vii) to consent to filing of UCC financing statements in the respective states of incorporation or formation that list FCHS, FCMG and FCID as debtors and perfect a security interest in assets of FCHS, FCMG and FCID, which security interest is subordination in priority to CT.
3) FCMG agrees (i) to modify the Maximum Line of Credit from $2,000,000 and $2,500,000, and extend the maturity date to June 30, 2017, (ii) limit the right of FCID and FCMG to prepay the credit loan so that the principal balance outstanding loan shall not be less than $1,000,000 until the Maturity Date (“Minimum Borrowing”), (iii) provide for sixty (60) days prior written notice to prepay up to $1,000,000 of the outstanding indebtedness in excess of the Minimum Borrowing and having (iv) all other terms on the loan remain the same, including but not limited to section 2.3.13, and (v) consent to FCID and FCMG guaranteeing the Loan Transaction and (vi) consent to the filing of UCC financial statements that list FCHS, FCMG and FCID as debtors as required by the Loan Transaction.
4) In consideration of the $500,000 increase to the Maximum Line of Credit from $2,000,000 to $2,500,000, CT Capital shall receive 100,000 restricted shares of FCHS common stock, which shall be issued pursuant to an exception of the registration requirements of the Securities Act of 1933, as amended. The $500,000 increase may be repaid at any time by FCID and FCMG and shall not be subject to the conversion provisions set forth in Section 2.3.13.
5) The Parties agree for the modification to be effective December 14, 2015.
Accepted and Agreed to:
| CT CAPITAL, LTD. | FCID MEDICAL, INC. | |
| /s/ Jeffrey Roschman | /s/ Christian C. Romandetti | |
| By: Jeffrey Roschman | By: Christian C. Romandetti, President | |
| FIRST CHOICE MEDICAL GROUP OF BREVARD, LLC | FIRST CHOICE HEALTHCARE SOLUTIONS, INC. | |
| /s/ Kris Jones | /s/ Christian C. Romandetti | |
| By: Kris Jones, Authorized Person | By: Christian C. Romandetti, President | |
Exhibit 99.1
FIRST CHOICE HEALTHCARE INCREASES
LINE OF CREDIT TO $2.5 MILLION
MELBOURNE, FL – (Market Wired) – December 18, 2015 – First Choice Healthcare Solutions, Inc. (OTCQB:FCHS) (“FCHS,” “First Choice” or “the Company”), one of the nation’s only non-physician-owned, publicly traded healthcare services companies focused on the delivery of Orthopaedic care and treatment, today announced that its lender, CT Capital, LTD, has modified the accounts receivable line of credit established with the Company’s wholly owned subsidiary, First Choice Medical Group of Brevard, LLC, increasing the line from $2 million to $2.5 million and extending the maturity date of the Loan Agreement to June 30, 2017.
Christian Romandetti, President and CEO of First Choice, stated, “In light of our Company’s rapid growth – as reflected in the 232% year over year revenue increase we reported for our third quarter, we are very pleased that we have succeeded in negotiating additional financial support from CT Capital. The increase in our credit line will serve to further strengthen our liquidity and enhance our ability to execute on prevailing growth initiatives while optimizing management of our monthly cash flow. We will continue to pursue the lowest cost of capital that will help fund our business expansion and create enduring shareholder value.”
For additional details, please refer to the Form 8-K to be filed later today with the U.S. Securities and Exchange Commission, found at www.sec.gov.
About First Choice Healthcare Solutions, Inc.
Headquartered in Melbourne, Florida, First Choice Healthcare Solutions (FCHS) is implementing a defined growth strategy aimed at building a national collective of world class medical centers of excellence in key expansion markets throughout the U.S. with concentration in neurology, orthopaedics, spine surgery and interventional pain medicine, as well as related ancillary care services. Serving Florida’s Space Coast, the Company’s flagship regional network currently administers over 100,000 patient visits each year and is comprised of First Choice Medical Group, The B.A.C.K. Center and Crane Creek Surgery Center. For more information, please visit www.myfchs.com, www.myfcmg.com, www.thebackcenter.net and www.cranecreeksurgerycenter.com .
Safe Harbor Statement
Certain information set forth in this news announcement may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of First Choice Healthcare Solutions, Inc. Such forward-looking statements are based on current expectations, estimates and projections about the Company’s industry, management beliefs and certain assumptions made by its management. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Information concerning factors that could cause the Company's actual results to differ materially from those contained in these forward-looking statements can be found in the Company's periodic reports on Form 10-K and Form 10-Q, and in its Current Reports on Form 8-K, filed with the Securities and Exchange Commission. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise to reflect future events or circumstances or reflect the occurrence of unanticipated events.
For additional information, please contact:
Investor Relations at WallStreetWriter
407-878-5945 or FCHS@wallstreetwriter.com