Augmedix Secures Strategic Financing from HCA Healthcare and Redmile Group

Company raises $12 million of new equity from HCA Healthcare and Redmile Group;
Augmedix and HCA Healthcare to collaborate on AI-powered ambient documentation products for the acute care setting;
Provides sufficient capital to achieve cash flow sustainability

Augmedix, a healthcare technology company that delivers ambient medical documentation and data solutions to healthcare systems, physician practices, hospitals, and telemedicine practitioners, announced that it has executed a strategic financing with HCA Healthcare, Inc. (NYSE: HCA), one of the nation’s leading healthcare providers, and Redmile Group, LLC, a San Francisco-based institutional healthcare investor. The strategic financing provides Augmedix with approximately $12 million in new capital and is expected to enable the Company to achieve positive cash flow without additional financing.

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In conjunction with this financing, Augmedix will collaborate with HCA Healthcare to advance the development of AI-powered ambient documentation products for acute care clinicians, helping to streamline hospital workflows. These cutting-edge products instantly convert natural clinician-patient conversations into medical notes that physicians and nurses can review and finalize before they are seamlessly transferred in real time to the Electronic Health Record (EHR). The transformation of this vital but often time-consuming task can improve the ease of documentation and provide physicians and nurses more time to spend with patients. This innovative technology will complement Augmedix’s products that cater to the ambulatory care setting.

“We are excited to partner with Augmedix to develop ambient documentation in the acute care setting,” said Michael J. Schlosser, MD, MBA, senior vice president, HCA Healthcare’s department of Care Transformation and Innovation (CT&I). “This technology has the potential to revolutionize the way documentation occurs at the point of care, and this partnership and investment are part of our broader strategy to use technology to support our physicians and nurses and enhance patient care.”

“This equity issuance is expected to be our last before Augmedix reaches cash flow sustainability. Having a global healthcare leader like HCA Healthcare as a strategic partner helps validate our technology and approach to address the pervasive documentation challenge in the acute care setting,” commented Manny Krakaris, Chief Executive Officer at Augmedix. “With this new capital and HCA Healthcare as a strategic partner, we are accelerating development of innovative products such as Augmedix Go, working collaboratively to develop the right tools to address the important and complex issues of healthcare access, patient outcomes and physician burnout at scale. Importantly, we believe we can reach cash flow breakeven with the capital and liquidity now on our balance sheet, which we expect to achieve as we exit 2024. Our expanding portfolio of products has positioned Augmedix well for the large market opportunity ahead, and we look forward to delivering continued strong top-line growth in 2023 with improving operating leverage.”

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Under terms of the strategic financing, Augmedix raised $12 million of equity from HCA Healthcare and Redmile Group at $1.60 per share through the issuance of a combination of new common shares and pre-funded warrants. In connection with the issuance of each new common share and pre-funded warrant, Augmedix also issued a “break even” warrant to purchase 0.25 common shares that are only exercisable in certain limited events, including if there is an additional equity or debt financing prior to the Company achieving two of three consecutive quarters of positive operating cash flow before net cash interest expense by the end of 2025.

In addition, should the Company elect to further supplement its liquidity position, the Company and Redmile Group have agreed to finalize within 30 days the terms of an equity line of credit from Redmile Group providing the Company with the option to raise up to $5 million at $1.60 per share. The Company would be able to access this facility between 12 months and 18 months after the equity line of credit is finalized. Based upon its operating plans, management does not anticipate utilizing this facility.

“The existing cash on our balance sheet, combined with the $12 million equity raise and the availability under our existing debt facility, provide us with 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,” added Paul Ginocchio, Chief Financial Officer at Augmedix.

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