ACTIVECARE, INC. (OTCMKTS:ACAR) Files An 8-K Entry into a Material Definitive Agreement

ACTIVECARE, INC. (OTCMKTS:ACAR) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01 Entry into a Material Definitive Agreement

Factoring Agreement
On April 17, 2017, ActiveCare, Inc., a Delaware corporation (the
Company“), entered into a Factoring Agreement (the
Factoring Agreement“) with Complete Business Solutions
Group (“CBSG“). The Company has previously entered into
factoring arrangements with CBSG in the ordinary course of
business and in amounts received that were $400,000 and less in
each case. The Factoring Agreement provides for an advance of
$1,794,000, comprised of $1,000,000 in cash and the consolidation
of $794,000 from four prior transactions into the amounts owed
under the Factoring Agreement (collectively, the “Funds”). In
consideration for the Funds, the Company sold to CBSG all future
receipts until the total amount of $2,511,600.76 (the
Receipt Purchased Amount“) has been paid. The Factoring
Agreement requires payment of the minimum daily amount of
$12,999.99 for 193 days. The Receipt Purchased Amount can be
reduced if repayment occurs more quickly. Repayment of the
amounts owing is with recourse and secured by all accounts,
chattel paper, documents, equipment, general intangibles,
instruments, and inventory of the Company. CBSG, however, has
subordinated its security interest to Partners for Growth, to
whom the Company currently owes over $2,875,000. The amount owed
to CBSG is personally guaranteed by Jeff Peterson, the Company’s
CEO.
The above description of the Factoring Agreement does not purport
to be complete and is qualified in its entirety by the full text
of such document, which is attached as Exhibit 10.1 to this
Current Report on form 8-K and incorporated by reference herein.
Joint Venture
On April 17, 2017 the Company and Colorado Choice Health Plans
(“CCHP”) entered into a Joint Venture Agreement, effective
March 31, 2017 (the “JV Agreement“). Under the JV
Agreement: (i) CCHP is providing various services to the Company
to improve the Company’s diabetes programs, (ii) the Company is
loaning CCHP $500,000 under a debenture note, and (iii) the JV
Agreement will terminate upon the later of (a) repayment of the
debenture note or (b) the one year anniversary of the JV
Agreement. The debenture note: (i) bears interest at the rate of
five percent per annum, (ii) is subordinated to the rights of
CCHP policyholders, claimants and beneficiary claims and all
other classes of CCHP creditors other than subordinated debenture
holders, (iii) does not become a liability of CCHP until and
unless the Commissioner of the Colorado Department of Regulatory
Agencies, Division of Insurance (“Division of
Insurance
“) authorizes repayment of the debenture agreement,
and shall be treated by CCHP as surplus until the time of such
approval, (iv) is only repayable from available funds in excess
of CCHP’s minimum net surplus required to be maintained by the
Division of Insurance, and (v) is otherwise repayable on March
31, 2018, assuming approval by the Division of Insurance.
The above description of the JV Agreement and the debenture note
do not purport to be complete and are qualified in their entirety
by the full text of such documents, which are attached as Exhibit
10.2 to this Current Report on form 8-K and incorporated by
reference herein.
Amendment to Purchase Agreement and Promissory Note
As previously reported, the Company entered into a Securities
Purchase Agreement, as amended (the “Purchase
Agreement
“), with JMJ Financial, a Nevada sole
proprietorship (“JMJ“, and together with the Company,
the “Parties“). to the terms of the Purchase Agreement,
JMJ purchased from the Company (i) a promissory note, as amended,
in the aggregate principal amount of up to $2,000,000 (the
Note“) due and payable on the earlier of March 15,
2017, or the third business day after the closing of the
Company’s contemplated public offering of securities (the
Securities Offering“), (ii) a common stock purchase
warrant to purchase 10,000,000 shares of the Company’s common
stock (“Common Stock“) at an exercise price as defined
therein, and (iii) $200,000 of Common Stock (the “Origination
Shares
“).
On April 19, 2017, the Parties entered into a fifth amendment to
the Purchase Agreement (the “Amendment“). The Amendment
extends the maturity date of the Note to the earlier of May 20,
2017 or the third business day after the closing of the
Securities Offering. Additionally, the date by which the
Origination Shares must be delivered to JMJ is extended to the
fifth trading day after the pricing of the Securities Offering,
but in no case later than May 20, 2017.
The foregoing description of the Amendment does not purport to be
complete and is qualified in its entirety by the terms and
conditions of the document. A copy of the Amendment is attached
hereto as Exhibit 10.3 and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit No.
Description
10.1* Factoring Agreement
10.2*
Joint Venture Agreement
10.3* Amendment #5 to the Securities Purchase Agreement and the
$2,000,000 Promissory Note
*filed herewith


About ACTIVECARE, INC. (OTCMKTS:ACAR)

ActiveCare, Inc. provides products and services to those diagnosed with chronic illnesses, and provides real-time visibility to health conditions and risk. The Company’s Chronic Illness Monitoring segment is engaged in the business of developing, distributing and marketing mobile monitoring of patient vital signs and physical activity to insurance companies, disease management companies, third-party administrators, and self-insured companies. The Company’s chronic illness monitoring involves the use of biometric monitoring devices in combination with data and algorithms to assess the wellbeing of an individual under care. The Company’s CareCenter service is designed to monitor and track patients’ health conditions and chronic illnesses on a real time basis. It has developed products that incorporate global positioning system (GPS), cellular capability, and fall detection, all of which are connected to its CareCenter with the push of a button.

ACTIVECARE, INC. (OTCMKTS:ACAR) Recent Trading Information

ACTIVECARE, INC. (OTCMKTS:ACAR) closed its last trading session down -0.95 at 9.00 with 515 shares trading hands.

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