Invuity Announces New Debt Agreement
March 13 2017 - 5:40PM
Increases borrowing capacity to up to $50
millionProvides financial flexibility with interest-only payments
on term loan for first 24 monthsNew agreement will replace existing
$15 million term loan and $7.5 million revolver with $30 million
term loan and $20 million revolver
Invuity, Inc. (NASDAQ:IVTY), a leading medical technology
company focused on minimal access surgery, today announced that it
signed a new debt agreement with MidCap Financial (“MidCap”) on
March 10, 2017. The new facility consists of a $30 million term
loan divided in two tranches. The first tranche of $20 million was
funded upon closing and the additional $10 million may be drawn
down prior to December 31, 2018 provided that the Company achieves
certain revenue milestones. The new agreement also consists of a
$10 million revolving credit facility (revolver) that may be
increased to $20 million at a later date at the Company’s request
and with approval from MidCap.
“We are pleased to announce this debt financing with MidCap, a
leading financing partner in the healthcare space,” commented
Philip Sawyer, Invuity’s CEO. “This new and lower cost debt
facility strengthens our balance sheet as it allows for potential
additional funding of up to $27.5 million to support us as we
continue to drive growth through execution of our commercial
strategies and introduction of additional innovative, high-value
medical devices that leverage our expertise in advanced
photonics.”
The MidCap facility carries a 60 month term with interest-only
payments on the term loan for the first 24 months. The interest
rate on the term loan is 6.5% plus the greater of LIBOR or 1.5%,
which at closing resulted in a rate of 8.0%. Borrowings under the
revolving line of credit bear interest of 3.25% plus the greater of
LIBOR or 1.5% which at closing resulted in a rate of 4.75%. These
interest rates are lower than the debt the company replaced. The
MidCap agreement requires the Company to maintain certain minimum
net revenue requirements.
The new agreement replaces the existing $15 million term loan
with HealthCare Royalty Partners on which the Company was about to
start making payments and the $7.5 million revolver with Silicon
Valley Bank which the Company had yet to utilize.
The company anticipates that with the $20 million in borrowings
from the initial tranche of the new term loan facility, after
prepayment costs of $17.4 million plus an anticipated $3 million
draw on the new revolver facility, the reduced interest costs and
deferral of principal payments compared to the original debt will
improve its cash position by $7.0 million in 2017.
About Invuity®
Invuity, Inc. is a leading medical technology company focused on
developing and marketing advanced surgical devices to improve the
ability of physicians to perform minimal access surgery through
smaller and hidden incisions. The company's patented Intelligent
Photonics™ technology delivers enhanced visualization which
facilitates surgical precision, efficiency and safety. In addition,
the company utilizes comprehensive strategic marketing programs to
create stronger institutional partnerships. Clinical applications
include women’s health, encompassing breast cancer and breast
reconstruction surgery, gynecology and thyroid surgery.
Additional applications include procedures for electrophysiology,
spine, orthopedic, cardiothoracic, and general surgery. Invuity is
headquartered in San Francisco, CA. For more information, visit
www.invuity.com.
About MidCap Financial
MidCap Financial is a middle market-focused, specialty finance
firm that provides senior debt solutions to businesses across all
industries. The firm’s years of experience, strong balance sheet,
and flexibility make it a lender of choice for companies across all
stages of growth and complexity.
MidCap Financial’s debt solutions focus in five areas:
- General and Healthcare Asset-Based working capital loans
collateralized by third-party accounts receivable and other
assets;
- Leveraged loans to companies backed by private equity
sponsors;
- Life Sciences loans to VC-backed and public pharmaceutical,
biotech, and medical device companies;
- Real Estate loans on all types of commercial properties,
medical office buildings, various types of senior housing and
skilled nursing properties; and
- Lender Finance term loans or revolvers provided across the
consumer and commercial finance sectors.
Additional information about MidCap Financial can be found
at www.midcapfinancial.com.
Forward-Looking Statements
This announcement contains forward-looking statements that
involve risks and uncertainties, including statements regarding our
ability to achieve certain revenue milestones, our ability to
increase the borrowing capacity under our new credit facility, our
anticipated draw down on our revolving credit facility, financial
projections related to the new credit facility, such as a reduction
in costs and an increase in cash position in 2017, future product
introductions and our commercial strategies. Actual results could
differ materially from those projected in the forward-looking
statements as a result of certain risk factors, including, but not
limited to: fluctuations in demand or failure to gain market
acceptance for the Company's devices; the Company's ability to
demonstrate to and gain approval from hospitals to use the
Company's devices; the highly competitive business environment for
surgical medical devices; the Company's ability to sell its devices
at prices that support its current business strategies; difficulty
forecasting future financial performance; protection of the
Company's intellectual property; and compliance with necessary
regulatory clearances or approvals. The Company undertakes no
obligation to update the forward-looking information in this
release. More information about potential factors that could affect
the Company's business and financial results is included in its
filings with the Securities and Exchange Commission, including,
without limitation, under the captions: "Management's Discussion
and Analysis of Financial Condition and Results of Operations," and
"Risk Factors," which are on file with the Securities and Exchange
Commission.
CONTACT:
Company Contact:
Jim Mackaness
Chief Financial Officer
Invuity, Inc.
415-655-2129
Investors:
Mark Klausner
Westwicke Partners
443-213-0501
irdept@invuity.com
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