Catasys Reports Second Quarter 2016 Financial Results

CATASYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

Six Months Ended

(In thousands)

June 30,

2016

2015

Operating activities:

Net loss

$       (9,012)

$          (847)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

   Depreciation and amortization

64

63

   Amortization of debt discount and issuance costs included in interest expense

660

1,056

   Provision for doubtful account

20

75

   Deferred rent

(45)

(34)

   Share-based compensation expense

349

1,037

   Common stock issued for consulting services

-

172

   Warrants issued for services

-

56

   Loss on exchange of warrants

-

4,410

   Fair value adjustment on warrant liability

750

(9,908)

   Fair value adjustment on derivative liability

2,844

-

Changes in current assets and liabilities:

   Receivables

(339)

230

   Prepaids and other current assets

245

118

   Deferred revenue

1,118

499

   Accounts payable and other accrued liabilities

397

478

      Net cash used in operating activities 

$       (2,949)

$       (2,595)

Investing activities:

   Purchases of property and equipment

$            (26)

$            (16)

   Deposits and other assets

16

-

      Net cash used in investing activities

$            (10)

$            (16)

Financing activities:

   Proceeds from the issuance of convertible debenture

$                -

$         2,000

   Proceeds from bridge loan

2,185

250

   Transaction Costs

-

(185)

   Capital lease obligations

(90)

(10)

     Net cash provided by financing activities

$         2,095

$         2,055

Net decrease in cash and cash equivalents

$          (864)

$          (556)

Cash and cash equivalents at beginning of period

916

708

Cash and cash equivalents at end of period

$              52

$            152

Supplemental disclosure of cash paid

   Income taxes

$              37

$              34

Supplemental disclosure of non-cash activity

   Property and equipment acquired through capital leases and other financing

$              43

$                -