ATLANTA, GA - Streamline Health Solutions, Inc. (NASDAQ:STRM), a healthcare solutions provider, has successfully closed private placements of unsecured subordinated notes and common stock, resulting in $4.5 million in aggregate gross proceeds.
This financial move, completed on February 7, 2024, is part of the company's strategy to achieve its target of $15.5 million in installed Software as a Service (SaaS) Annual Recurring Revenue (ARR) and adjusted EBITDA breakeven in the second half of fiscal 2024.
The private placement consists of $4.4 million in subordinated promissory notes and warrants to purchase over 4 million shares of common stock at a strike price of $0.38, alongside a separate issuance of common stock that raised approximately $100,000. The proceeds are expected to provide the liquidity necessary for Streamline to reach its financial goals.
In conjunction with the funding, Streamline has also expanded its board of directors with the appointments of CEO Benjamin Stilwill and Matthew Etheridge, effective today.
Stilwill, a Streamline veteran since 2013 and CEO since October 2024, brings extensive experience within the company, having previously served as President and CEO of its eValuator business. Etheridge, with over two decades of investment management experience, particularly in healthcare services and information technology, adds a valuable perspective to the board.
Tee Green, Executive Chairman of Streamline, expressed confidence in the added expertise of the new board members, anticipating their contributions to the company's ongoing development.
The funding is also accompanied by a modification of the company's existing senior credit facility with Western Alliance (NYSE:WAL) Bank, amending certain financial covenants and thresholds. This strategic financial restructuring is aimed at bolstering Streamline's growth and supporting its healthcare system clients with pre-bill revenue cycle solutions.
The securities issued in these private placements, conducted under specific exemptions from registration requirements, have not been registered under the Securities Act or state securities laws and thus cannot be offered or sold in the United States without registration or an applicable exemption.
Streamline Health Solutions, Inc. specializes in integrated solutions, technology-enabled services, and analytics designed to optimize financial performance and ensure compliant revenue across healthcare organizations.
InvestingPro Insights
As Streamline Health Solutions, Inc. (NASDAQ:STRM) navigates through its strategic financial initiatives, the latest data from InvestingPro paints a detailed picture of the company's current market standing. As of the last twelve months leading up to Q3 2024, Streamline Health Solutions holds a market capitalization of $19.33 million. Despite the company's efforts to secure funding, the InvestingPro Data indicates a negative Price/Earnings (P/E) ratio of -0.98, reflecting investor skepticism about future earnings.
An InvestingPro Tip that stands out in relation to the company's recent financial moves is the concern that Streamline is quickly burning through cash. This is a critical consideration for investors, as it may impact the company's ability to sustain its operations and meet its financial targets, including the $15.5 million SaaS ARR and adjusted EBITDA breakeven in the second half of fiscal 2024.
Moreover, the company's stock performance has been underwhelming, with a significant 84.19% drop in the one-year price total return, and a 29.02% decrease over the last month. This trend is corroborated by another InvestingPro Tip, highlighting that the stock has taken a big hit over the last week. These metrics suggest that investors are reacting to Streamline's financial position and market performance.
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