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The following is an excerpt from a S-1 SEC Filing, filed by OPTICARE HEALTH SYSTEMS INC on 12/17/1999.
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OPTICARE HEALTH SYSTEMS INC - S-1 - 19991217 - PROCEED_USE

USE OF PROCEEDS

Assuming that the offering price is $3.88 per share, which is the closing price on the American Stock Exchange on December 14, 1999, and assuming we sell all the shares we are offering, we will receive approximately $15.1 million from the sale of the common stock in this offering. These amounts are net of the estimated offering expenses of $.4 million.

We currently intend to use the net proceeds of this offering as follows:

o $3.0 million to reduce the outstanding balance of the term loan under our credit facility which currently bears interest at the rate of 8.39% per annum. The term loan facility is repayable in fifteen quarterly principal installments, with the first fourteen installments repayable in accordance with the amortization schedule set forth in the credit facility, and the final payment of all principal amounts outstanding, due and payable on June 1, 2004.

o $4.0 million to pay in full the $4.0 million 9% subordinated convertible note held by Marlin Capital, L.P. which is due and payable on August 13, 2002. See "Certain Relationships and Related Transactions"

o $8.1 million for the expansion of our laser correction and professional services division, additional e-commerce applications and for working capital and general corporate purposes. Until we apply the net proceeds for those purposes, we will apply the net proceeds to temporarily reduce the outstanding balance of the revolving portion of debt under our credit facility, which currently bears interest at the rate of 8.39% per annum. The revolving portion of the credit facility is due in full on June 1, 2004.

If we sell less than all the shares we are offering, the proceeds will be applied in the priority indicated above.

The first $3,000,000 of net proceeds from the sale of common stock is required to be paid to the lenders pursuant to the terms of our credit facility. We are required to redeem the $4,000,000 note issued to Marlin Capital (if not converted) at the redemption price, to the extent that we raise net proceeds from this offering in an amount in excess of $3,000,000.

The proceeds of our credit facility were used to pay indebtedness of PrimeVision Health and OptiCare Eye Health Centers and to fund our business operations. The proceeds of the subordinated convertible note were used in connection with the mergers among PrimeVision Health, OptiCare Eye Health Centers and Saratoga. See "Certain Indebtedness."

Subject to the terms of our credit facility, we are permitted to "re-borrow" the amount that we apply to reduction of the revolving portion of debt under our credit facility until June 1, 2004.

We regularly review opportunities to further our business strategy through strategic acquisitions of businesses that we believe are complementary to our current and planned operations. We, however, have no present commitments or agreements with respect to any particular acquisition. See "Business -- Growth Strategy."

The foregoing information represents our best belief of our use of the proceeds of this offering based upon our current plans. Actual expenditures may vary substantially from the intended uses described above. We may find it necessary or advisable to use portions of the proceeds of this offering for other purposes.

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