Nuvectra Secures $45 Million Second Amendment to Existing Loan and Security Agreement
February 20 2018 - 8:30AM
Nuvectra Corporation (NASDAQ:NVTR), a neurostimulation medical
device company, announced today that it has reached an agreement
with Silicon Valley Bank and Oxford Finance, the lenders of its
existing credit facility, to secure a second amendment to the
Company’s loan and security agreement for $45.0 million.
On February 16, 2018, the Company amended its loan and security
agreement with Silicon Valley Bank and Oxford Finance to provide
the Company with a $45.0 million term loan available in 3 tranche
payments, from which the first tranche of $27.5 million was funded
to repay the existing term loan in full, at the closing of the
agreement.
In addition, on February 16, 2018 the Company
drew down the second tranche commitment for $12.5 million following
the achievement of the $20.0 million trailing six month product
revenue milestone as of January 31, 2018. The third tranche
commitment allows the Company to draw down another $5.0 million
commencing on the date of achieving trailing six month product
revenue of $25.0 million (the “Third Tranche Milestone”) and ending
on the earlier of March 31, 2019 or sixty (60) days following the
Third Tranche Milestone. The third tranche commitment replaces the
existing $5.0 million revolving line commitment.
The amended agreement also extends the
amortization period of the loan with principal payments scheduled
to begin April 2020 based on the drawn second tranche.
Walter Berger, Chief Operating Officer & Chief Financial
Officer, commented, “We are pleased to announce the amended loan
and security agreement that provides the Company with greater
financial flexibility and an extended amortization period. This
agreement, together with our recently completed follow-on common
stock offering that raised approximately $26.0 million in gross
proceeds, will allow the Company to continue to drive our U.S.
commercial expansion of the Algovita® system and plan our entry
into the SNM market. We appreciate our continued relationship
with Silicon Valley Bank and Oxford Finance and their continued
confidence in our ability to execute on our near and long term
corporate initiatives.”
About Nuvectra Corporation
Nuvectra™ is a neurostimulation company committed to
helping physicians improve the lives of people with chronic
conditions. The Algovita® Spinal Cord Stimulation (SCS) System is
our first commercial offering and is CE marked and FDA approved for
the treatment of chronic intractable pain of the trunk and/or
limbs. Our innovative technology platform also has capabilities
under development to support other indications such as sacral
neuromodulation (SNM) for the treatment of overactive bladder, and
deep brain stimulation (DBS) for the treatment of Parkinson’s
Disease. In addition, our NeuroNexus subsidiary designs,
manufactures and markets leading-edge neural-interface technologies
for the neuroscience clinical research market. Visit the Nuvectra
website at www.nuvectramed.com.
About Silicon Valley Bank
For 35 years, Silicon Valley Bank (SVB) has helped innovative
companies and their investors move bold ideas forward, fast. SVB
provides targeted financial services and expertise through its
offices in innovation centers around the world. With commercial,
international and private banking services, SVB helps address the
unique needs of innovators. Learn more at svb.com.
About Oxford Finance LLC
Oxford Finance is a specialty finance firm providing senior
secured loans to public and private life sciences and healthcare
services companies worldwide. For over 20 years, Oxford has
delivered flexible financing solutions to its clients, enabling
these companies to maximize their equity by leveraging their
assets. In recent years, Oxford has originated over $4 billion in
loans, with lines of credit ranging from $5 million to $100
million. Oxford is headquartered in Alexandria, Virginia, with
additional offices in San Diego, California; Palo Alto, California;
and the greater Boston and New York City areas. For more
information, visit oxfordfinance.com.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains "forward-looking
statements," including statements we make regarding the outlook
for Nuvectra as an independent publicly-traded company.
Forward-looking statements are based only on our current beliefs,
expectations and assumptions regarding the future of our business,
future plans and strategies, projections, anticipated events and
trends, the economy and other future conditions, and therefore they
are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict and may be outside of
our control. Our actual performance may differ materially from
those indicated in the forward-looking statements. Therefore, you
should not rely on any of these forward-looking statements. Any
forward-looking statement made by us is based only on information
currently available to us and speaks only as of the date on which
it is made. Important factors that could cause our actual
results to differ materially from those indicated in the
forward-looking statements include: (i) our ability to successfully
commercialize Algovita and to develop, complete and commercialize
enhancements or improvements to Algovita; (ii) our ability to
successfully compete with our current SCS competitors and the
ability of our U.S. sales representatives to successfully establish
market share and acceptance of Algovita; (iii) the uncertainty of
obtaining regulatory approvals in the United States and Europe for
our Virtis SNM system; (iv) our ability to successfully launch and
commercialize the Virtis SNM system if it receives regulatory
approval; (v) our ability to demonstrate the features, perceived
benefits and capabilities of Algovita to physicians and patients in
competition with similar products already well established and sold
in the SCS market; (vi) our ability to anticipate and satisfy
customer needs and preferences and to develop, introduce and
commercialize new products or advancements and improvements to
Algovita in order to successfully meet our customers’ expectations;
(vii) the outcome of our development plans for our neurostimulation
technology platform, including our ability to identify additional
indications or conditions for which we may develop neurostimulation
medical devices or therapies and seek regulatory approval thereof;
(viii) our ability to identify business development and growth
opportunities and to successfully execute on our strategy,
including our ability to seek and develop strategic partnerships
with third parties to, among other things, fund clinical and
development costs for new product offerings; (ix) the performance
by our development partners, including Aleva
Neurotherapeutics, S.A., of their obligations under their
agreements with us; (x) the scope of protection for our
intellectual property rights covering Algovita and other products
using our neurostimulation technology platform, along with any
product enhancements or improvements; (xi) our ability to
successfully build, attract and maintain an effective commercial
infrastructure and qualified sales force in the United States;
(xii) our compliance with all regulatory and legal requirements
regarding implantable medical devices and interactions with
healthcare professionals; (xiii) any supplier shortages related to
Algovita or its components and any manufacturing disruptions which
may impact our inventory supply as we expand our business; (xiv)
any product recalls, or the receipt of any warning letters,
mandatory corrections or fines from any governmental or regulatory
agency; (xv) our ability to satisfy the conditions and covenants,
including trailing six month revenue milestones, of our Credit
Facility; and (xvi) our ability to raise capital through means
other than or in addition to the Credit Facility should it become
necessary to do so, through a public offering of our common stock,
private equity or debt financings, strategic partnerships, or other
sources. Please see the section entitled “Risk Factors” in
Nuvectra’s Annual Report on Form 10-K and in our other quarterly
and periodic filings for a description of these and other risks and
uncertainties. We undertake no obligation to publicly update
any forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information,
future developments or otherwise.
Company Contacts:Nuvectra
Corporation
Walter Berger, COO & CFO(214) 474-3102
wberger@nuvectramed.com
Investor Contacts:The Ruth
Group
Tram Bui / Brian Johnston(646) 536-7035 /
7028investors@nuvectramed.com
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