Augmedix, a healthcare technology company that delivers ambient medical documentation, amended its existing senior secured term loan facility with Silicon Valley Bank, a division of First Citizens Bank. The amendment may extend the interest only period by as long as 18 months from January 2024 to July 2025. Augmedix also finalized terms on its previously disclosed equity line of credit with Redmile Group. Combined with the $12 million of new equity from HCA Healthcare and Redmile announced in April 2023, these actions bolster the company’s financial strength and enhance its liquidity cushion as it scales the business toward the goal of achieving cash flow sustainability.
“We greatly appreciate the support of our lending partner and largest shareholder who both recognize the strong fundamentals and attractive prospects of our business,” Manny Krakaris, CEO of Augmedix, said. “Following the strategic partnership with HCA Healthcare announced seven weeks ago, our teams are energized as we are scaling a portfolio of AI-enabled ambient document products, including our next-generation Augmedix Go product, targeted for commercial launch by the end of the year. These two financing initiatives are key parts of our plan to ensure we have the financial strength to accomplish our goals.”
“We have previously stated that we have the necessary liquidity to reach cash flow sustainability without the need for any additional equity issuances or tapping into the new equity line of credit,” Paul Ginocchio, CFO at Augmedix, said. “I am confident in our path to profitability, even more so with the extension of the interest only period and our continued strong business momentum.”
The equity line of credit with Redmile Group is expected to provide Augmedix, at solely the company’s option, the backstop to raise up to $5 million at $1.60 per share, with access to this facility for approximately the second half of 2024. The availability of the line of credit is subject to a shareholder vote at the company’s annual shareholder meeting, expected to take place in the middle of July 2023. Based upon its operating plans, management does not anticipate utilizing this facility.
The extension of the interest only period of the senior secured term loan facility is subject to certain conditions, as set forth in the amendment to the senior secured loan facility and the availability of the equity line of credit is subject to certain conditions, as set forth in the equity line of credit securities purchase agreement.
