Loan Agreement Details: MSP Recovery, Inc. has entered into a non-binding term sheet for a secured term loan facility of up to $55 million. This agreement aims to provide significant working capital and operational funding to support future growth initiatives.
Loan Structure: The facility includes two tranches:
Tranche A: Up to $10 million, with $5 million expected to be funded at closing and an additional $5 million available at the lender's discretion.
Tranche B: Up to $45 million, accessible after closing, also subject to lender discretion.
Maturity and Security: The loan facility matures 36 months post-closing, with potential one-year extensions. The obligations will be secured by a first-priority interest in the company's assets.
Financial Instruments and Conditions
Warrants Issuance: In connection with the loan, MSP Recovery will issue warrants to the lender to purchase shares of its Class A common stock, with an exercise price of $0.01 per share. The coverage ranges from 3.0% to 0.35% per $1 million drawn, potentially reaching a maximum of approximately 46.0% on a fully diluted basis if fully drawn.
Additional Terms: The term sheet includes customary fees, financial reporting requirements, and oversight rights for the lender. It may also involve the appointment of a Chief Restructuring Officer and a voting trust for certain shareholders, with some actions requiring shareholder approval under Nasdaq rules.
Company Vision and Future Outlook
CEO Statement: John H. Ruiz, Founder and CEO, emphasized that the capital infusion from this agreement is intended to align with partners who share the company's long-term vision. He expressed confidence in the company's claims and business model while committing to ongoing litigation strategies for healthcare clients.
Company Background: Founded in 2014, MSP Recovery specializes in Medicare, Medicaid, and commercial reimbursement recovery, utilizing data-driven solutions to enhance the healthcare reimbursement system.
Forward-Looking Statements
Cautionary Note: The release contains forward-looking statements that involve risks and uncertainties, indicating that actual results may differ from expectations. Factors affecting performance include the ability to recover funds, secure financing, and innovate solutions, among others. The company does not intend to update these statements except as required by law.
MSPR
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About MSPR
MSP Recovery, Inc. is a healthcare reimbursement recovery and data analytics company, providing historical and near-real-time solutions for payers, providers, and patients. It is disrupting the antiquated healthcare reimbursement system by discovering losses and recovering improper payments for Medicare, Medicaid, and commercial health insurers, and innovating technologies and comprehensive services for multiple industries, including healthcare and legal. Its access to large volumes of data, sophisticated data analytics platforms, and advanced technology provide an opportunity to discover and recover improper healthcare claims payments. It has developed Algorithms to identify waste, fraud, and abuse in the Medicare, Medicaid, and commercial health insurance sectors. It analyzes historical medical claims data to identify recoverable opportunities. It has developed a technologically advanced Electronic Health Record platform that streamlines the retrieval and analysis of medical data.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
