POMPANO BEACH, Fla.--MEDirect Latino Inc. (Pink Sheets:MLTO), the first national provider of direct-to-consumer Medicare reimbursed medical products focused exclusively on chronic diseases afflicting the Hispanic community, today announced that it failed to make an interest payment to lender due October 15, 2007 and the company may be required to refund amounts previously paid to it by Medicare and may be subject to additional interest, fines or penalties that the government may seek to impose.
MEDirect Latino, Inc. (the "Company") currently has outstanding $6,097,058 plus accrued interest outstanding on the Notes under its Amended Loan and Security Agreement (the "Notes"). The Notes bear interest at 12% per annum. Interest payments are due on the 15th of each month. The Company announced today that it is out of working capital and failed to make its October 15, 2007 interest payment on the Notes. Under the terms of the Notes, failure to make any interest payment constitutes an "Event of Default." Upon the occurrence of an Event of Default, the Notes bear interest at 18% per annum, and the Lenders may declare all obligations under the Notes to be immediately due and payable. The Company has not, to date, received any notice from its Lenders declaring the Notes to be due and payable. However, there can be no assurance that such notice will not be given by the Lenders. The Company is in discussions with the Lenders, and is also pursuing other strategic alternatives. However, there can be no assurance that the Company will resolve the situation with its Lenders, or that it will be able to pursue other strategic alternatives.
In addition, the Company has received a request to produce records to a Medicare program safeguard contractor relating to thirty patients previously serviced by the Company. Based upon an internal review of the thirty files requested, the Company has initiated an internal investigation beyond the thirty records requested by the Medicare program safeguard contractor. The ongoing investigation is being supervised by a Special Investigation Committee made up of independent members of the Board of Directors. At the present point in time, a material number of patient records in the thirty-patient sample are missing some or all of the requested supporting medical record documentation. As a result of this finding, the Company may be required to refund amounts previously paid to it by Medicare and may be subject to additional interest, fines or penalties that the government may seek to impose. If the amount owed to Medicare, including any fines or penalties otherwise asserted, is material and the Company is not able to negotiate a payment plan to satisfy such amounts, the Company may not be able to pay these amounts or the Company be forced to liquidate its assets or otherwise cease to do business.
ABOUT MEDirect Latino:
MEDirect Latino, Inc. (www.medirectlatino.org) is the first national provider of direct-to-consumer Medicare reimbursed medical products focused exclusively on chronic diseases afflicting the Hispanic community. MEDirect Latino is rapidly growing and uniquely positioned to service the Hispanic community in the United States and Puerto Rico. MEDirect is the only company currently positioned to serve the U.S. Hispanic healthcare market as a direct-to-consumer Medicare provider on an authentically national level. Type II diabetes was targeted because of its unique status within the Medicare reimbursement regime and due to its high degree of correlation to other chronic conditions such as high blood pressure and heart disease. These and other conditions represent considerable future market potential, MEDirect will scale its model by leveraging its existing client base and infrastructure in introducing new products and services to existing customers as they are identified.
Safe Harbor Disclosure: This press release includes "forward-looking statements" within the meaning of the federal securities laws, commonly identified by such terms as "believes", "looking ahead", "anticipates", "estimates" and other terms with similar meaning. Although the Company believes that the assumptions upon which its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Company's projections and expectations are disclosed in the Company's filings with the Securities and Exchange Commission. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions.