Streamline Health Solutions, Inc. (NASDAQ:STRM) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
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”). 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.
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.
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.
(d) Exhibits
| 99.1 | Press Release Announcing Loan and Security Agreement, dated December 12, 2019. |
STREAMLINE HEALTH SOLUTIONS INC. Exhibit
EX-99.1 2 tm1924798d2_ex99-1.htm EXHIBIT 99.1 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,…
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About Streamline Health Solutions, Inc. (NASDAQ:STRM)
Streamline Health Solutions, Inc. is engaged in providing healthcare information technology through the licensing of its Electronic Health Information Management, Patient Financial, Coding and Clinical Documentation Improvement (CDI), and other Workflow software applications, and the use of such applications by software as a service. The Company also provides implementation and consulting services to complement its software solutions. The Company provides computer software-based solutions through its Looking Glass platform. The Company sells its solutions and services in North America to hospitals and health systems, including physician practices, through its direct sales force and its reseller partnerships. The Company’s software and services allow hospitals and integrated healthcare delivery systems in the United States and Canada to capture, store, manage, route, retrieve and process patient clinical, financial and other healthcare provider information.