Attached files
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| EX-4.1 - THIRD AMENDED AND RESTATED SECURED CONVERTIBLE PROMISSORY NOTE - Ontrak, Inc. | ex4-1.htm |
| EX-4.2 - THIRD AMENDED AND RESTATED WARRANT - Ontrak, Inc. | ex4-2.htm |
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): November 30, 2011
Catasys, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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001-31932
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88-0464853
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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11150 Santa Monica Boulevard, Suite 1500
Los Angeles, California
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90025
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(Address of principal executive offices)
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(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.)
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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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On November 30, 2011, Catasys, Inc. (the "Company") completed a private placement of notes and warrants with Socius Capital Group, LLC (Socius), an affiliate of Terren Peizer, the Company's Chairman and CEO. As described below, the current placement increases Socius's investment in the secured convertible promissory notes and warrants to $1,205,000 since August 2011 and Socius's investment in the Company to $3.42 million since November 2010. After giving effect to the latest investment, the Company's Chairman and CEO beneficially owns
53.4 % of the Company, including shares underlying warrants, convertible notes, and options. In total the Company has issued $2,235,000 in secured convertible promissory notes and warrants to Socius and David E. Smith, a Company affiliate, since August 2011. The Company anticipates that the holders of the secured convertible promissory notes will convert such notes into a Qualified Financing, as defined below, but there can be no assurance that such holders will do so.
On November 30, 2011, the Company issued a Third Amended and Restated Secured Convertible Promissory Note (the “Third Amended and Restated Note”) to Socius to increase the outstanding principal amount under the Second Amended and Restated Socius Note (as defined below) by $235,000 in exchange for a loan in such increased amount from Socius. The Company had previously issued a Second Amended and Restated Secured Convertible Promissory Note dated November 15, 2011 to Socius (the “Second Amended and Restated Socius Note”) in the principal amount of $970,000, as previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on November 15, 2011. In connection with the Third Amended and Restated Note additional warrants were issued to Socius to purchase an additional 903,846 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), at an exercise price of $0.32 per share (the “Third Amended and Restated Warrant”), which amended and restated the Second Amended and Restated Warrant dated November 15, 2011. The exercise price of and/or number of shares of Common Stock underlying the Third Amended and Restated Warrants are subject to adjustment for stock splits, stock dividends, certain fundamental transactions, and financings and share issuances below the initial exercise price.
The Third Amended and Restated Note matures on January 5, 2012 and bears interest at an annual rate of 12% payable in cash at maturity, prepayment or conversion. The Third Amended and Restated Note and any accrued interest are convertible at the holder’s option into common stock or securities issued in the next financing the Company enters into in an amount of at least $2,000,000 (a “Qualified Financing”). The conversion price for the Third Amended and Restated Note is equal to the lower of (i) $0.26 per share of Common Stock, and (ii) the lowest price per share of Common Stock into which any security is convertible in any Qualified Financing.
The foregoing descriptions of the Third Amended and Restated Note and the Third Amended and Restated Warrant do not purport to be complete and are qualified in their entirety by the documents, which are attached as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On November 30, 2011, the Company issued the Third Amended and Restated Note secured by all of the Company’s assets on a pari passu basis with that certain Secured Promissory Note issued to David Smith as amended and restated on November 15, 2011, as disclosed in the Company’s Current Report on form 8-K filed on November 16, 2011, as described in Item 1.01 of this Current Report on Form 8-K.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On November 30, 2011, the Company incurred a direct obligation to repay $1,205,000 as described in Item 1.01 of this Current Report on Form 8-K.
Item 3.02. Unregistered Sales of Equity Securities.
On November 30, 2011, the Company issued the Third Amended and Restated Note and the Third Amended and Restated Warrant as described in Item 1.01 of this Current Report on Form 8-K. The issuance was exempt from registration pursuant to the exemption afforded by Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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No.
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Description
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4.1
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Third Amended and Restated Secured Convertible Promissory Note by and between Catasys, Inc. and Socius Capital Group, LLC, dated November 30, 2011.
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4.2
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Third Amended and Restated Warrant by and between Catasys, Inc. and Socius Capital Group, LLC, dated November 30, 2011.
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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: December 6, 2011
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By:
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/s/ SUSAN E. ETZEL
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Susan E. Etzel
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Chief Financial Officer
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