HC extends maturity date of secured promissory notes

By Devika Patel

Knoxville, Tenn., Dec. 3 - HC Innovations, Inc. extended the maturity date of certain senior secured promissory notes that were sold in a private placement, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

The amended notes will mature on the earlier of May 31, 2009 or the closing of a transaction, which would provide for the mandatory repayment of the notes. In the event that such a transaction does not close by May 31, 2009, the notes will mature on May 30, 2010.

The amended notes will carry compounding interest of 1% per month. Interest will be payable at maturity.

Also, in the event a transaction does not close by the agreed upon date, the holders may convert their securities, plus interest, into common stock at $0.20 per share.

The notes will carry 100% warrant coverage plus interest. The warrants will be exercisable at $0.30 after May 31, 2009 for five years if a transaction does not close.

Also, the investors agreed to forbear from exercising any rights and remedies under the default until Dec. 19.

Based in Shelton, Conn., HC operates Enhanced Care Initiatives, a provider of services for HMOs, nursing homes and insurance companies.

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