Comprehensive Care Corp (fka CHCR)

[genlou]

Item 2.06 Material Impairments

Comprehensive Care Corporation’s (the “Company”) contract with its client MMM Healthcare, Inc. and its corporate affiliate PMC Medicare Choice, Inc. (“MMM/PMC”) expired, as scheduled, on December 31, 2012. MMM/PMC decided to manage internally the services that the Company was providing. This contract accounted for 79.1%, or $41.8 million, of the Company’s revenues for the nine months ended September 30, 2012. As a result of this event and pursuant to requirements under generally accepted accounting principles, management performed a review of goodwill recorded on the Company’s balance sheet. The review was completed on December 31, 2012 and determined it was appropriate to write-off goodwill. Consequently, effective December 31, 2012, management recorded a non-cash impairment charge of $12.2 million to fully remove goodwill from the Company’s balance sheet. Management does not presently believe the impairment charge will result in material future cash expenditures.