UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 11, 2019
Streamline Health Solutions, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 0-28132 | 31-1455414 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1175 Peachtree Street NE, 10th Floor
Atlanta, GA 30361
(Address of principal executive offices) (Zip Code)
| Registrant’s telephone number, including area code: | (888) 997-8732 |
Securities registered or to be registered pursuant to Section 12(b) of the Act.
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Common Stock, $0.01 par value | STRM | The NASDAQ Capital Market |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 1.01 | Entry into a Material Definitive Agreement. |
On December 11, 2019, Streamline Health Solutions, Inc. (the “Company”) and Streamline Health, Inc., the Company’s wholly-owned subsidiary, entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Bridge Bank, a division of Western Alliance Bank (“Bridge Bank”). Pursuant to the Loan and Security Agreement, Bridge Bank agreed to provide the Company and its subsidiary with a new revolving line of credit and term loan facility in the maximum principal amount of $6,000,000, including (i) a $2,000,000 line of credit and (ii) a $4,000,000 term loan. Amounts outstanding under the term loan portion of the Loan and Security Agreement bear interest at a per annum rate equal to the higher of (a) the Prime Rate (as published in The Wall Street Journal) plus 1.25% and (b) 6.25%. Amounts outstanding under the line of credit portion of the Loan and Security Agreement bear interest at a per annum rate equal to the higher of (a) the Prime Rate (as published in The Wall Street Journal) plus 1.50% and (b) 6.50%. In addition, the Company will also be required to pay customary fees and expenses. At closing, the proceeds of the term loan were used to repay in full the outstanding indebtedness under its prior credit facility with Wells Fargo Bank, N.A.
The line of credit has a two-year term and advances will be limited to 80% of eligible accounts receivable (as defined in the Loan and Security Agreement). The term loan requires payments of interest only through December 2020. Beginning in January 2021, the Company is required to make monthly payments of principal, based on a three-year amortization schedule. All amounts outstanding under the term loan will become due and payable on December 11, 2023. Proceeds of the line of credit and term loan were, and will be, used to (i) repay in full certain existing indebtedness of the Company and its subsidiary; (ii) fund certain fees and expenses associated with the Loan and Security Agreement; and (iii) for ordinary working capital requirements and other general corporate needs.. The term loan and line of credit have been guaranteed by the Company and its subsidiary and are secured by all, or substantially all, assets of the Company, its subsidiaries, and certain of its affiliates.
The Loan and Security Agreement includes customary financial covenants, including the requirements that the Company achieve certain EBITDA levels, a certain Asset Coverage ratio and certain recurring revenue levels. The Loan and Security Agreement also includes negative covenants, subject to exceptions, which limit transfers, capital expenditures, indebtedness, certain liens, investments, acquisitions, dispositions of assets, restricted payments and the business activities of the Company, as well as customary representations and warranties, affirmative covenants and events of default, including cross defaults and a change of control default. The line of credit and term loan are also subject to customary prepayment requirements.
| Item 1.02. | Termination of a Material Definitive Agreement. |
In connection with entering into the Loan and Security Agreement discussed under Item 1.01 above, the Company terminated the Credit Agreement, dated November 21, 2014, as amended from time to time, by and among the Company, Streamline Health, Inc., the lenders party thereto and Wells Fargo Bank, National Association, a banking association, as administrative agent for such lenders, and repaid all outstanding amounts due thereunder.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
Please see the description of the Loan and Security Agreement with Bridge Bank set forth under Item 1.01 of this Current Report on Form 8-K.
| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
|
Exhibit Number |
Description |
| 99.1 | Press Release Announcing Loan and Security Agreement, dated December 12, 2019. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Streamline Health Solutions, Inc. | ||
| Date: December 17, 2019 | By: | /s/ Thomas J. Gibson |
| Name: | Thomas J. Gibson | |
| Title: | Chief Financial Officer | |
Exhibit 99.1
News Release
STREAMLINE
HEALTH® Announces New Credit Facility
with Bridge Bank
Company Secures New Line of Credit and Term Loan Totaling $6 Million
Atlanta, GA – December 12, 2019 – Streamline Health Solutions, Inc. (NASDAQ: STRM), provider of integrated solutions, technology-enabled services and analytics supporting revenue cycle optimization for healthcare enterprises, today announced it has moved its credit facility to Bridge Bank, a division of Western Alliance Bank, effective December 11, 2019. Bridge Bank has extended the Company a new credit facility with a total capacity of $6 million. This credit facility replaces the Company’s prior credit facility with Wells Fargo Bank N.A.
The new credit facility consists of a $2 million revolving line of credit and a $4 million term loan. The line of credit will have a two-year term with advances limited to 80% of eligible accounts receivable as defined in the credit facility documentation. The term loan, which will have a 4-year term, will be interest-only for the first 12 months with monthly amortization payments beginning on the 13th month following closing. The term loan will be subject to mandatory prepayment upon the occurrence of certain corporate transactions by the Company.
“As discussed in previous earnings calls, we are pleased to begin a new relationship with Bridge Bank,” stated Tee Green, Chief Executive Officer, Streamline Health. “This new credit facility represents another building block in our vision for the Company’s go-forward capital structure. Over the past few months we have successfully completed a capital raise which enabled us to retire the preferred shares at a discount. This new credit facility helps us lower our total cost of capital and enhances our ability to further invest in the development and growth of our eValuator™ technology.”
About Streamline Health
Streamline Health Solutions, Inc. (NASDAQ: STRM) is a healthcare industry leader in capturing, aggregating, and translating enterprise data into knowledge – producing actionable insights that support revenue cycle optimization for healthcare enterprises. We deliver integrated solutions, technology-enabled services and analytics that empower providers to drive revenue integrity in a value-based world. We share a common calling and commitment to advance the quality of life and the quality of healthcare – for society, our clients, the communities they serve, and the individual patient. For more information, please visit our website at www.streamlinehealth.net
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements made by Streamline Health Solutions, Inc. that are not historical facts are forward-looking statements that are subject to certain risks, uncertainties and important factors that could cause actual results to differ materially from those reflected in the forward-looking statements included herein. Forward-looking statements contained in this press release include, without limitation, statements regarding the Company’s ability to lower its cost of capital and the Company’s ability to invest in the development and growth of its eValuator technology. These risks and uncertainties include, but are not limited to, the Company's ability to maintain compliance with the terms of its credit facility, the timing of contract negotiations and execution of contracts and the related timing of the revenue recognition related thereto, the potential cancellation of existing contracts or clients not completing projects included in the backlog, the impact of competitive solutions and pricing, solution demand and market acceptance, new solution development and enhancement of current solutions, key strategic alliances with vendor and channel partners that resell the Company's solutions, the ability of the Company to control costs, the effects of cost-containment measures implemented by the Company, availability of solutions from third party vendors, the healthcare regulatory environment, potential changes in legislation, regulation and government funding affecting the healthcare industry, healthcare information systems budgets, availability of healthcare information systems trained personnel for implementation of new systems, as well as maintenance of legacy systems, fluctuations in operating results, effects of critical accounting policies and judgments, changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other similar entities, changes in economic, business and market conditions impacting the healthcare industry generally and the markets in which the Company operates and nationally, and other risks detailed from time to time in the Streamline Health Solutions, Inc. filings with the U. S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revision to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.
Company Contact:
Randy Salisbury
SVP, Chief Marketing Officer
(404) 229-4242
randy.salisbury@streamlinehealth.net