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08/29/2025 – 09:50 PM
MIAMI, August 29, 2025 – MSP Recovery, Inc. (NASDAQ: MSPR), a key player in Medicare, Medicaid, commercial, and secondary payer reimbursement recovery and technology, today announced a non-binding term sheet for a secured term loan facility of up to $55 million. The deal, inked with an investor operating under a non-disclosure agreement with MSP Recovery, aims to provide a significant injection of working capital and operational funding to fuel future growth initiatives.
Beyond the financial commitment, the investor is also positioned to pursue the acquisition of additional assignor claim rights, collaborating with MSP Recovery to expand its claim portfolio, either through direct assignment or by providing servicing rights for claims acquired independently.
Facility Structure: A Two-Tranche Approach
The proposed facility is structured as a first-lien secured delayed-draw term loan, potentially reaching a total principal amount of $55.0 million. This is divided into two tranches:
- Tranche A Loans: Up to $10.0 million, with $5.0 million anticipated at closing. An additional $5.0 million is contingent and subject to the lender’s sole discretion.
- Tranche B Loan: Up to $45.0 million, available post-closing, also dependent on meeting a specific contingency and the lender’s approval.
The facility carries a 36-month maturity from the closing date, with the possibility of two one-year extensions, subject to the lender’s approval. MSP Recovery’s obligations would be secured by a first-priority lien on substantially all of their assets, subject to inter-creditor arrangements with existing lenders.
Equity Dilution Looms with Warrant Issuance
As part of the deal, MSP Recovery will be issuing warrants to the lender, allowing them to purchase Class A common stock equivalent to specific percentages of the company’s fully diluted equity. These warrants have an exercise price of just $0.01 per share and a ten-year term. The warrant coverage fluctuates, starting at 3.0% per $1.0 million drawn under Tranche A and decreasing to 0.35% per $1.0 million drawn under later portions of Tranche B. If fully drawn, the warrants could represent roughly 46.0% of MSP Recovery’s fully diluted equity.
Beyond the financials, the term sheet outlines customary fees, budget constraints, financial reporting requirements, oversight provisions, and approval rights for the lender. It also opens the door for the potential appointment of a Chief Restructuring Officer and a voting trust arrangement for select existing shareholders. It’s important to note that certain credit extensions and warrant issuances are subject to shareholder approval under Nasdaq rules.
John H. Ruiz, Founder and CEO of MSP Recovery, framed the deal as a strategic move: “The transactions contemplated in the term sheet agreement would pave the way for a capital infusion, aiming to create strategic alignment with partners who share our long-term vision. As we work to optimize the capital structure, our confidence in the company’s underlying claims and business model remains unchanged. We also remain steadfast in seeking justice for our healthcare clients through continuing litigation strategies, and committed to meaningful outcomes across the healthcare industry.”
About MSP Recovery, Inc.
Founded in 2014, MSP Recovery is a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery leader, disrupting the antiquated healthcare reimbursement system with data-driven solutions to secure recoveries from responsible parties. MSP Recovery, Inc. innovates technologies and provides comprehensive solutions for multiple industries including healthcare and legal. For more information, visit: msprecovery.com
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “plan,” and “will” or, in each case, their negative, or other variations or comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance or results and actual events may differ materially from those expressed in or suggested by the forward-looking statements.
Any forward-looking statement made by the Company herein speaks only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for the Company to predict or identify all such events or how they may affect it. MSP Recovery has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws.
Factors that could cause these differences include, but are not limited to, the Company’s ability to capitalize on its assignment agreements and recover monies that were paid by the assignors; the inability of MSP Recovery to obtain financing and generate revenues sufficient to cover the cost of operations; the inherent uncertainty surrounding settlement negotiations and/or litigation, including with respect to both the amount and timing of any such results; the validity of the assignments of claims to MSP Recovery; the ability to successfully expand the scope of the Company’s claims or obtain new data and claims from the Company’s existing assignor base or otherwise; the Company’s ability to innovate and develop new solutions, and whether those solutions will be adopted by the Company’s existing and potential assignors; negative publicity concerning healthcare data analytics and payment accuracy; and those additional factors included in MSP Recovery’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by it with the Securities and Exchange Commission. These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.
FAQ
What is the size of MSP Recovery’s new term loan facility?
The facility is structured for up to $55 million, divided into Tranche A ($10 million) and Tranche B ($45 million).
How much equity dilution could MSPR shareholders face from this deal?
The deal includes warrants that could result in up to 46% equity dilution on a fully diluted basis if the facility is fully drawn.
What are the key terms of MSPR’s new loan facility?
The facility has a 36-month maturity with two possible one-year extensions, requires first-priority security interest in assets, and includes warrant issuance with exercise price of $0.01 per share.
How is the $55M loan facility structured for MSPR?
The facility consists of Tranche A ($10M with $5M at closing) and Tranche B ($45M available after closing), both subject to lender discretion and specific contingencies.
What corporate governance changes are included in MSPR’s term sheet?
The term sheet includes provisions for appointing a Chief Restructuring Officer, establishing a voting trust arrangement, and implementing lender oversight and approval rights.
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