Healthcare Corporation of America (OTCPK:HCCA.E) announced a private placement of junior secured convertible term notes for minimum gross proceeds of $2,112,500 and maximum gross proceeds of $6,000,000 on December 31, 2013. Each note will bear interest at 10% per annum and will mature in two years from the date of issuance. The notes will be convertible into common shares of the company at a conversion price of $1.50 per share. Interest is payable in cash, however, the company can elect to pay interest in kind by capitalizing such interest as additional principal amount on the notes and issuing additional pro rata warrants. The company may redeem the notes in whole, and not in part, upon 30 days' notice, and within 15 days of such notice holders shall be entitled to elect to convert the notes, in whole, and not in part. At any time and from time to time holders may convert the notes into common stock. In the event of a default, the company shall pay additional interest at a rate of 2% per annum. The company will issue one warrant to the investor for each $1.50 invested for the purchase of the notes. The company issued 1,408,333 warrants in the transaction. Each warrant will entitle the holder to purchase an additional common share of the company at $3 per share. The notes being issued will expire on December 31, 2015. The warrant being issued will expire on December 31, 2018. The company may continue to make subsequent placements under the agreement until it has placed an aggregate of $6,000,000 in notes or the date that is 30 days after the date of such initial closing. The placement agent fee was paid in the form of additional notes. The securities will be issued pursuant to exemption provided under Regulation D. Chardan Capital Markets, LLC acted as the sole placement agent to the company. Jeffrey P. Schultz of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. will act as the legal advisor to the placement agent and the investors. Mitchell Nussbaum of Loeb & Loeb, LLP will act as the legal advisor to the company.

In connection with the transaction, the company has agreed to pay a placement agent fee equal to 9% of the principal amount of the notes purchased. The company will also pay to Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., counsel for Chardan Capital Markets, LLC up to $50,000 in legal fees, of which $20,000 has already been paid. The fee was paid in the form of additional notes with a pro rata number of warrants.

On December 31, 2013, Healthcare Corporation of America closed the transaction. The company expected to issue 6,000,000 warrants in the transaction.