UPDATED -- Troubled health-care services companyCatasys Inc.has raised $2 million for working capital and to repay debt.

The company alerted investors to doubts about its ability to continue as a going concern, or without the threat of liquidation, after incurring losses since its 2003 start, in a filing with the U.S. Securities and Exchange Commission. But Catasys CEO Terren Peizer tells Mergers & Acquisitions that 2015 is the year the company will become profitable.

Catasys has been unprofitable since it was founded in 2003. The company expects to incur additional losses for at least the next year, contributing to doubts about its future, according to a March 31 SEC filing, and has a $255 million deficit. Despite financial challenges, Catasys reported some good news in its latest annual report, including growth in enrollment and revenue.

"The company will be turning profitable this year," says Peizer, who says he owns about 70 percent of the business. Inking deals with Aetna Inc. (NYSE: AET), Humana (NYSE: HUM) and other groups increased the commercially equivalent lives that Catasys affects, aiding in the move toward profitability, according to Peizer.

Catasys brought in the money through selling a $2.12 million debenture due in January 2016. The company is planning to use $1.82 million for working capital, and $560,000 to pay debt owed to an affiliate of Peizer.

Los Angeles-based Catasys provides specialized healthcare management services to health plans and employers. The services are designed to improve member health and lower costs to the insurer for underserved populations, in which behavioral health conditions are exacerbating co-existing medical conditions. The services use member engagement and patient-centric treatment that integrates evidence-based medical and psychosocial interventions along with care coaching in a 52-week outpatient program.

The business is gaining traction and the company's pipeline should drive revenue growth, according to an analyst report from Neay Nakae at Chardan. 

Health care services companies have been M&A targets over the past few years as the Affordable Care Act continues to bring more patients into the health care system, causing providers to bulk up on services to try to cut costs. For more, see5 Technologies That Drove Health Care M&A in 2014andACA Reshuffles the Deckand watch Mergers & Acquisitions’ recentvideo interview with Baird Capital partner Mike Bernstein

Peizer says that he's not looking to sell and sees significant growth prospects. "You have us expanding into new products areas, like anxiety, which is four times larger than substance abuse," he says.

For the previous edition of Turnaround Tuesday, check outLosses Mount for Hard Rock Las Vegas Hotel & Casino. For more struggling companies, see Mergers & AcquisitionsDistressed Company Watch List

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